It erroneously held that a teacher is not an ‘employee’ under the Payment of Gratuity Act
In a rare move, the Supreme Court on Wednesday called back its own judgment suo motu and listed it for fresh hearing. A Bench of Justices A.M. Sapre and R. Subhash Reddy froze the implementation of the court’s January 7 verdict which erroneously held that a teacher is not an ‘employee’ under the Payment of Gratuity Act.
The judgment was delivered by a Bench of Justices Sapre and Indu Malhotra after relying on a 2005 judgment of the Supreme Court.
The Sapre/Malhotra Bench was not apprised of the later development of Parliament amending the law in 2009 to effectively include teachers within the ambit of ‘employee’ under the Payment of Gratuity Act, 1972. The amendment had a retrospective effect dating back to 1997.
Subsequent High Court judgments had also interpreted the 2009 amendment to include teachers within the definition of ‘employee’ under Section 2(e) of the Act irrespective of the institution in which they work.
Jharkhand HC order
The case concerned an appeal on a Jharkhand High Court order allowing the plea of a former assistant professor of the Birla Institute of Technology for gratuity amount.
“The judgment dated January 7, 2019 shall not be given effect to till the matter is reheard finally by the appropriate Bench… The Registry is directed to list this matter for rehearing before the appropriate Bench of Justices Abhay Manohar Sapre and Indu Malhotra as early as possible,” the Supreme Court ordered.