Teachers can’t claim gratuity under Payment of Gratuity Act, reiterates SC

UPDATE 7th MARCH 2019: THIS JUDGEMENT WAS FOUND TO BE ERRONEOUS AND WAS RECALLED BY THE HON’BLE SUPREME COURT. THE MATTER HAS BEEN REHEARD. TO SEE THE JUDGEMENT PASSED AFTER REHEARING OF THE MATTER, CLICK HERE.

In the matter of Ahmadabad Pvt. Primary Teachers Association vs.Administrative Officer and Others [(2004) 1 SCC 755], it was held by the Hon’ble Supreme Court that a teacher is not an employee within the meaning of the expression “employee” as defined under Section 2(e) of the Payment of Gratuity Act, 1972 and hence he/she is not entitled to claim any gratuity amount from his/her employer under the Act. In other words, it was held that since a teacher is not an employee under Section 2(e) of the Act, he/she has no right to invoke the provisions of the Act for claiming gratuity under the Act from his/her employer.

Recently, on 7thJanuary 2019, in the matter of Birla Institute of Technology v. The State of Jharkhand & Ors. , the Hon’ble Supreme Court reiterated the aforementioned principle of law while stating that inthe matter of Ahmadabad Pvt. Primary Teachers Association vs.Administrative Officer and Others, the Hon’ble Supreme Court did not make any distinction between the teachers inter se and nor made any distinction as to in which type of educational institute the teacher is working for determining his/her entitlement to claim the gratuity under the Payment of Gratuity Act.(Para 19)

However, the Hon’ble Supreme Court also made it clear that in case there is any other State Act or Scheme in  force, which extends any benefit to the employees of the Institute only then such an employee would be at liberty to take benefit of such Act/Scheme in accordance with law.(Para 22)

Copy of judgement: Judgement 07th Jan 2019

-Tushar Kaushik

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