“We prima facie find error in the judgment and, therefore, are inclined to stay the operation of our judgment dated 07.01.2019 passed in this appeal.”
In a surprising turn of the event, the supreme court decided to stay with the judgement, in which it held that a teacher, irrespective of the type of educational institute he/she is working, is not an ‘employee’ under Section 2(e) of the Payment of Gratuity Act and, therefore has no right to invoke the Act for claiming gratuity from his/her employer.
Justice Abhay Ahmed stated for the same, “Keeping in view the amendment made in the definition of Section 2(e), which as stated above was not brought to the notice of the Bench, this issue was not considered though had relevance for deciding the question involved in the appeal. It is for this reason, we prima facie find error in the judgment and, therefore, are inclined to stay the operation of our judgment dated 07.01.2019 passed in this appeal.”
The court observed that it wasn’t brought to their notice that the judgement in Ahmedabad Pvt. Primary Teachers Association vs Administrative Officers & others (2004), in which the appeal was allowed. As per the appeal necessitated in the case, the Parliament amend the definition of ‘employee’ under Section 2(e) of the Payment of Gratuity Act by Amending Act No.47 of 2009 with retrospective effect from 3rd April 1997.
The Bench said, “Though the definition was amended in 2009 by Act No.47 of 2009, yet the same was given retrospective effect from 03.04.1997 so as to bring the amended definition on Statute Book, from 03.04.1997.”
The Two Judge Bench consisting of Justice Abhay Manohar Sapre and Justice Indu Malhotra directed the registry to list the matter for rehearsing as early as possible.
Ahmedabad Private Primary Teachers’ Assn Judgement
The Bench considered the judgment in the case of Ahmedabad Private Primary Teachers’ Association case, the Supreme Court ruled that teachers are not entitled to gratuity under the Payment Gratuity Act,1972 as they do not fall under the description of the definition of ‘employee’ in the Act.
The judgment concluded, “It is for the Legislature to take cognizance of the situation of such teachers in various establishments where gratuity benefits are not available and think of separate legislation for them in this regard. That is the subject matter solely of the Legislature to consider and decide.”
1997 Notification and 2009 Amendment
Before the judgement, the Central Government notified the Ministry of Labour and Employment to extend the provision of the Payment of Gratuity Act to educational institutions employing 10 or more persons.
In 2009, the amendment provided a definition to the term ‘employee’ under Section 2(e) of the Act which reads : “”employee” means any person (other than an apprentice) who is employed for wages, whether the terms of such employment are express or implied, in any kind of work, manual or otherwise, in or in connection with the work of a factory, mine, oilfield, plantation, port, railway company, shop or other establishment to which this Act applies, but does not include any such person who holds a post under the Central Government or a State Government and is governed by any other Act or by any rules providing for payment of gratuity.”
It also inserted the term ‘Gratuity’ in Section 13-A of the Act, which reads: “Validation of payment of gratuity.–Notwithstanding anything contained in any judgment, decree or order of any court, for the period commencing on and from the 3rd day of April, 1997 and ending on the day on which the Payment of Gratuity (Amendment) Act, 2009, receives the assent of the President, the gratuity shall be payable to an employee in pursuance of the notification of the Government of India, in the Ministry of Labour and Employment vide Number S.O. 1080, dated the 3rd day of April, 1997 and the said notification shall be valid and shall be deemed always to have been valid as if the Payment of Gratuity (Amendment) Act, 2009 had been in force at all material times and the gratuity shall be payable accordingly: Provided that nothing contained in this section shall extend, or be construed to extend, to affect any person with any punishment or penalty whatsoever by reason of the non-payment by him of the gratuity during the period specified in this section which shall become due in pursuance of the said notification.”
Supreme Court did not Notice 2009 Amendment
The judgement by the Supreme Court similarly was delivered by the Jharkhand High Court in 2008 before the amendment of the Act in 2009.
At that time also, the High Court distinguished the Ahmedabad Pvt. Primary Teachers Association judgement on the ground that it is only available to the primary teachers working in primary schools and since the case doesn’t involve primary teacher it is not applicable in this case.
The Supreme Court considered the appeal and observed that the High Court made an incorrect reading of its judgement. It seemed as if 2009 wasn’t even noticed which is applicable in this case.
LEGAL NEWS WRITER- DEEKSHA KARUNAKAR