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Teachers can now claim gratuity under Payment of Gratuity Act (Earlier judgement stayed)

In Birla Institute of Technology v. State of Jharkhand, the Supreme Court had earlier on 7.1.19 held that teachers are not entitled to claim gratuity as per the ruling in Ahmadabad Pvt. Primary Teachers Association vs. Administrative Officer, (2004) 1 SCC 755. The earlier ruling is available here.

However, it was later brought to Court’s notice that the definition of the word “employee” as defined in Section 2(e) of the Payment of Gratuity Act, 1972 by Amending Act No. 47 of 2009 on 31.12.2009 with retrospective effect from 03.04.1997 and the teachers were brought within the purview of “employee”.

Based on the changed law, the Supreme Court decided :

1) the law laid down by this Court in the case of Ahmadabad Pvt. Primary Teachers Association was no longer applicable against the teachers, as if not rendered, and
2) the teachers were held entitled to claim the amount of gratuity under the Payment of Gratuity Act from their employer with effect from 03.04.1997.

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