January 10, 2019
In a subsequent development, the Supreme Court Bench stayed it’s recent order, whereby the Bench in the case of Birla Institute of Technology v. State of Jharkhand & ors. had held that Teachers and not Employees and hence are not entitled to Payment of Gratuity under the Payment of Gratuity Act.
While staying it’s verdict, the Bench remarked “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”.
While passing its verdict earluer, the Bench had relied on its judgment in the case of Ahmadabad Pvt. Primary Teachers Association vs. Administrative Officer and Others, wherein the question arose for consideration was whether “Teacher” could be regarded as an “employee” under Section 2(e) of the Act and, if so, whether he/she is entitled to claim gratuity amount from his employer in accordance with the provisions of the Act. The Bench in the case held that a teacher is not an employee within the meaning of the expression “employee” as defined under Section 2(e) of the Act and hence he/she is not entitled to claim any gratuity amount from his employer under the Act.
The Supreme Court while staying the Judgment noted that during the course of hearing of the appeal it was not brought to the notice of the Bench that the judgment of this Court in Ahmedabad Pvt. Primary Teachers Association vs. Administrative Officer & Ors. on which the reliance was placed for allowing the appeal necessitated the Parliament to amend the definition of “employee” under Section 2(e) of the Payment of Gratuity Act by Amending Act of 2009 with retrospective effect from 03.04.1997. In other words, though the definition was amended in 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.
Here it would be relevant to mention that the Amendment of 2009, amended the definition of “employee” under Section 2(e) of the Payment of Gratuity Act vide which “educational institutions” were brought within the purview of the Act.