In a significant ruling affecting teachers across India, the Supreme Court has held that they are not entitled to payment of gratuity at the end of their service as they cannot be classified as 'employee' under the provisions of the Payment of Gratuity Act, 1972.
A bench, comprising Justice Shivaraj V Patil and Justice D M Dharmadhikari, gave this ruling while upholding a full bench verdict of the Gujarat high court.
It dismissed an appeal filed by Ahmedabad Private Primary Teachers' Association challenging the high court order.
Under section 2(e) of the Payment of Gratuity Act, 1972, an "employee means any person (other than an apprentice) employed on wages, in any establishment, factory, mine, oilfield, plantation, port, railway company or shop, to do any skilled, semi-skilled, or unskilled, manual, supervisory, technical or clerical work, . . . whether or not such person is employed in a managerial or administrative capacity."
The government, by a notification dated April 3, 1997, had extended the provision of the Gratuity Act, 1972 to educational institutions employing ten or more persons.
However, the Apex Court after going through the various definitions of employee came to the conclusion that "the teaching staff being not covered by the definition of 'employee' can get no advantage because, by notification, educational institutions as establishments are covered by the provisions of the Act."
Writing for the bench, Justice Dharmadhikari said: "We are of the view that even on plain construction of the words and expressions used in definition clause 2(e) of the Act, 'teachers' who are mainly employed for imparting education are not intended to be covered for extending gratuity benefits under the Act."
"Teachers do not answer to the description of being employees who are 'skilled,' 'semi-skilled' or 'unskilled,' the bench said, rejecting the plea that teachers should be treated as included in the expression 'unskilled' or 'skilled.'
After giving the ruling, the bench said that its conclusion that teachers were not entitled to gratuity benefits under the 1972 Act should not be misunderstood.
It said: "Our conclusion should not be misunderstood that teachers, although engaged in very noble profession of educating our young generation, should not be given any gratuity benefit."
"There are already separate statutes, rules and regulations in several states granting gratuity benefits to teachers in educational institutions which are more or less beneficial than the gratuity benefits provided under the Act," it said.
The Apex Court said it was for the legislature to take cognisance of the situation and think of a separate legislation providing for gratuity to such teachers in various establishments where gratuity benefits were not available.
"That is a subject matter solely of the legislature to consider and decide," the Bench said, while dismissing the appeal filed by the private teachers association.
