Teacher not Employee- Not Entitled to Payment of Gratuity- Supreme Court

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January 08, 2019

In this recent case, the Two-Judge Bench of the Supreme Court has reiterated the settled law that Teachers are not entitled to payment of Gratuity under the Payment of Gratuity Act, 1972.

Case name: Birla Institute of Technology v. State of Jharkhand & ors.

In the instant case, the Appellant institute was primarily aggrieved by High Court’s order whereby the Court had approved payment of gratuity to the Respondent no. 4 who was an Assistant Professor in the Appellant Institute.

Bench’s Verdict

While pronouncing the verdict, the Apex Court majorly relied on it’s judgment in the case of Ahmadabad Pvt. Primary Teachers Association vs. Administrative Officer and Others[1], 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 Apex Court in the case also clarified that no distinction while laying down the law was made 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 entitlement to claim the gratuity under the Act.

In view of the aforesaid, the Supreme Court allowed the appeal and held that respondent No.4, who was also a teacher and worked with the appellant as such, was not eligible to claim gratuity amount from the appellant (BIT) under the Act.

The entire case can be accessed here.

[1] (2004) 1 SCC 755