Private School Teachers Entitled To Gratuity After 2009 Amendment: Telangana High Court

The Telangana High Court has held that teachers in private educational institutions are entitled to gratuity under the Payment of Gratuity Act 1972, in view of the 2009 amendment which retrospectively widened the definition of “employee” with effect from 03.04.1997.

The amendment was made via the Payment of Gratuity (Amendment) Act, 2009. 

Justice Juvvadi Sridevi held that the earlier Supreme Court ruling excluding teachers from the Act no longer governs the field after the amendment.

The Court observed that the decision in Ahmedabad Private Primary Teachers' Association v. Administrative Officer had lost its binding effect after the 2009 amendment, and that teachers are now entitled to claim gratuity under the Act from their employers, including private schools.

"This Court, upon perusing the decision relied upon by the Hon'ble Supreme Court in Birla Institute of Technology's case (2 supra), is of the opinion that the decision in Ahmedabad Pvt. Primary Teachers' Association's case (1 supra) is no longer applicable, in view of the Payment of Gratuity (Amendment) Act, 2009, whereby, Section 2(e) was retrospectively modified with effect from 03.04.1997, to include teachers, within the definition of “employee.” Accordingly, the earlier exclusion of teachers has been legislatively removed and the said judgment has lost its binding effect. Teachers are now entitled to gratuity under the Act and employers, including private schools, are legally obligated to pay such benefits. The constitutional validity and retrospective operation of the 2009 Amendment have been upheld, thereby affirming the earlier decision granting gratuity to the teacher". 

The writ petition was filed by St. George's Grammar School challenging the order dated 03.09.2011 passed in P.G. No.11 of 2010 by the Controlling Authority under the Payment of Gratuity Act-cum-Assistant Commissioner of Labour, Hyderabad, directing payment of Rs.2,93,685 as gratuity to a retired teacher.

According to the school, the teacher retired on 30.09.2009 and later approached the labour authority claiming gratuity. The school contended that such a claim could not be entertained under the Payment of Gratuity Act and had to be pursued under the Andhra Pradesh Education Act before the competent educational authority. It relied on an earlier Constitution Bench judgment of the erstwhile High Court of Andhra Pradesh, as well as the Supreme Court's pre-amendment ruling in Ahmedabad Private Primary Teachers' Association.

The school further argued that the labour authority lacked jurisdiction and had ignored binding precedent while directing deposit of gratuity.

Opposing the plea, the respondents relied on the Supreme Court's decision in Birla Institute of Technology v. State of Jharkhand, which held that after the 2009 amendment, teachers stood included within the scope of “employee” under Section 2(e) of the Payment of Gratuity Act with retrospective effect from 03.04.1997.

The Court also noted that the writ petition had earlier been dismissed in 2012, directing payment of gratuity, but the matter had been remitted by a Division Bench in Writ Appeal No.481 of 2012 for fresh consideration on the issue whether the teacher fell within the definition of “workman” under the Act. On reconsideration, Justice Sridevi held that the amended provision clearly covered teachers and that the claim was maintainable.

Holding that there was no merit in the school's challenge, the High Court directed the petitioners to pay gratuity to the retired teacher as expeditiously as possible, preferably within two months from the date of receipt of the order.

Case Title: The Warden & Correspondent, St. George's Grammar School & another v. State of Andhra Pradesh & others

Case No.: W.P. No.31621 of 2011

Appearance: Sri Ch. Samson Babu for the petitioners; Smt. V. Uma Devi for the respondents.

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