1. Do teachers in self-financing colleges come under the Payment of Gratuity Act?
2. Are there any pending cases regarding this subject in the Supreme Court?
3. What is the 2009 amendment in the Payment of Gratuity Act? Does this amendment bring all teachers under the Gratuity Act?
4. Are self-financing college teachers exempted from gratuity?
Please let me know if you need any further assistance.
From India, Kottayam
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2. Are there any pending cases regarding this subject in the Supreme Court?
3. What is the 2009 amendment in the Payment of Gratuity Act? Does this amendment bring all teachers under the Gratuity Act?
4. Are self-financing college teachers exempted from gratuity?
Please let me know if you need any further assistance.
From India, Kottayam
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Dear Vincent,
Let me answer all your four questions in a single go, though a bit elaborately with reference to the judgment delivered by the Honorable Supreme Court of India on 07-01-2019 in Birla Institute of Technology v. State of Jharkand [Civil Appeal no. 2530 of 2009] (for short BITS Case) following the ratio decidendi of Ahmedabad Private Primary Teachers Association v. Administrative Officer [2004(1) SCC 755] (for short APPTA Case). The essence of the latest BITS Case judgment is that a teacher is not governed by the definition of the term "employee" u/s 2(e) of the PG Act, 1972 as held before, and therefore, the respondent also, having worked under the appellant as a teacher, was not eligible to claim gratuity from the appellant BITS under the Act.
However, the irony is that in tune with the concluding remarks of the APPTA Case judgment of the Supreme Court -- "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." -- the Central Govt, through the Payment of Gratuity (Amendment) Act, 2009, in fact, amended the definition of the term "employee" u/s 2(e) of the PG Act, 1972 as follows:
"Section 2(e) - '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 the factory, mine, oil field, 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."
Now, throughout the country, teachers employed in all types of private educational institutions are getting their gratuity under the PG Act, 1972 on their normal termination of employment. Wherever any legal hassles arose in this regard, it had become a well-settled issue by the Judiciary in the backdrop of the amendment.
Earlier, in 1997, the Central Government had, by means of a notification u/s 1(3)(c) of the PG Act, 1972, brought all the educational institutions employing 10 or more employees into the purview of the Act w.e.f 03-04-1997.
Therefore, the Amending Act of 2009 also inserted a new section 13-A for the purpose of validation of payment of gratuity.
Unfortunately, all these changes happened subsequent to the APPTA Case judgment have not been considered by the Honorable Supreme Court in BITS Case. Therefore, this is certainly a "Per Incuriam" judgment. A Per Incuriam Judgment is one that is decided without reference to a statutory provision or earlier judgment that would have been relevant. In Government of Andhra Pradesh & Another v. B. Satyanarayana Rao & others [2000(4) SCC 262], the Supreme Court had categorically held that the rule of per incuriam can be applied when a court omits to consider a binding precedent of the same Court or the superior Court rendered on the same issue or where a Court omits to consider any Statute while deciding the issue.
Therefore, this judgment, being clearly Per Incuriam, cannot take away the right to gratuity of teachers employed in Private Educational Institutions, whether they be Government-aided or Self-financing.
I do hope that you can cull out the answers for your questions from my foregoing analysis of the BITS case judgment.
From India, Salem
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6185Let me answer all your four questions in a single go, though a bit elaborately with reference to the judgment delivered by the Honorable Supreme Court of India on 07-01-2019 in Birla Institute of Technology v. State of Jharkand [Civil Appeal no. 2530 of 2009] (for short BITS Case) following the ratio decidendi of Ahmedabad Private Primary Teachers Association v. Administrative Officer [2004(1) SCC 755] (for short APPTA Case). The essence of the latest BITS Case judgment is that a teacher is not governed by the definition of the term "employee" u/s 2(e) of the PG Act, 1972 as held before, and therefore, the respondent also, having worked under the appellant as a teacher, was not eligible to claim gratuity from the appellant BITS under the Act.
However, the irony is that in tune with the concluding remarks of the APPTA Case judgment of the Supreme Court -- "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." -- the Central Govt, through the Payment of Gratuity (Amendment) Act, 2009, in fact, amended the definition of the term "employee" u/s 2(e) of the PG Act, 1972 as follows:
"Section 2(e) - '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 the factory, mine, oil field, 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."
Now, throughout the country, teachers employed in all types of private educational institutions are getting their gratuity under the PG Act, 1972 on their normal termination of employment. Wherever any legal hassles arose in this regard, it had become a well-settled issue by the Judiciary in the backdrop of the amendment.
Earlier, in 1997, the Central Government had, by means of a notification u/s 1(3)(c) of the PG Act, 1972, brought all the educational institutions employing 10 or more employees into the purview of the Act w.e.f 03-04-1997.
Therefore, the Amending Act of 2009 also inserted a new section 13-A for the purpose of validation of payment of gratuity.
Unfortunately, all these changes happened subsequent to the APPTA Case judgment have not been considered by the Honorable Supreme Court in BITS Case. Therefore, this is certainly a "Per Incuriam" judgment. A Per Incuriam Judgment is one that is decided without reference to a statutory provision or earlier judgment that would have been relevant. In Government of Andhra Pradesh & Another v. B. Satyanarayana Rao & others [2000(4) SCC 262], the Supreme Court had categorically held that the rule of per incuriam can be applied when a court omits to consider a binding precedent of the same Court or the superior Court rendered on the same issue or where a Court omits to consider any Statute while deciding the issue.
Therefore, this judgment, being clearly Per Incuriam, cannot take away the right to gratuity of teachers employed in Private Educational Institutions, whether they be Government-aided or Self-financing.
I do hope that you can cull out the answers for your questions from my foregoing analysis of the BITS case judgment.
From India, Salem
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I completely agree with what our learned member, Umakanthan Sir, has said. The judgment of Hon. Justice Indu Malhotra is without considering the amendment to the Payment of Gratuity Act. Therefore, the teachers of self-financing educational institutions are entitled to get gratuity provided the basic requirements of coverage of the Act (i.e., the establishment should have at least 10 employees) and the entitlement (i.e., 5 years of service) are satisfied.
From India, Kannur
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From India, Kannur
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Payment of Gratuity Act, 1972 & The Rules.ppt
THE PAYMENT OF GRATUITY ACT 1972.doc