The verdict passed by the
Honorable Supreme Court held on Birla
Institute of Technology Vs. State of Jharkhand: decided on 07.01.2019 that
a teacher, irrespective of the type of educational institute he/she is working,
is not an 'employee' under Section 2(e) of the Payment of Gratuity Act and,
therefore, has no right to invoke the Act for claiming gratuity from his/her
employer can be unhesitatingly termed as a 'Per
Incuriam' judgment.
Per Incuriam judgment is the one which is decided without reference
to a statutory provision or prior judgment, which would have been relevant.
This is a classic case of a per incuriam judgment which did not notice an unambiguous
statutory amendment. Per Incuriam, literally
translated as "through lack of care" is a device within the common
law system of judicial precedent. A finding of per incuriam means that a
previous court judgment has failed to pay attention to relevant statutory
provision or precedents. The significance of a judgment
having been decided per incuriam is that it need not be followed by a lower
court. Ordinarily, the rationes of a judgment is binding upon lower courts in
similar cases. However, a lower court is free to depart from a decision of a
superior court where that earlier judgment was decided per incuriam.
Hon’ble Supreme Court Verdict in Ahmedabad Pvt. Primary Teacher
Association Vs. Admn. Officer passed on 13.01.2004 {reported as (2004)1 SCC
755}
The Supreme Court ruled that
teachers are not entitled to gratuity under the payment of Gratuity Act, 1972
as they do not fall within description of definition of "employee"
under Section 2(e) of the Payment of Gratuity Act, 1972.
The said judgment concluded with
these remarks: "It is for the Legislature to take cognizance of situation
of such teachers in various establishments where gratuity benefits are not
available and think of a separate legislation for them in this regard. That is
the subject matter solely of the Legislature to consider and decide."
After this judgment, by Act
47 of 2009 (w.r.e.f. 3-4-1997), the definition of Section 2(e) in the Payment
of Gratuity Act, 1972 was amended. This changed definition of “employee” vide
amendment of 2009, has not been considered in this judgment. Therefore, this
judgment is liable to be reviewed.
1997 Notification and 2009 Amendment
But, well before this judgment,
the Central Government, vide the Ministry of Labour and Employment
Notification, extended provisions of Payment of Gratuity Act to the educational
institutions employing 10 or more persons.
In 2009, an amendment was
introduced to the definition of 'employee' by the Payment of Gratuity (Amendment) Act, 2009, The amended
definition of 'employee' under Section
2(e) reads: "2(e)
"employee" means any person (other than an apprentice) who is
employed for wages, whether the terms of such employment are express or
implied, in any kind of work, manual or otherwise, in or in connection with the
work of a factory, mine, oilfield, plantation, port, railway company, shop or
other establishment to which this Act applies, but does not include any such
person who holds a post under the Central Government or a State Government and
is governed by any other Act or by any rules providing for payment of
gratuity."
It also inserted Section 13-A which reads: "13-A. Validation of payment of gratuity.—
Notwithstanding anything
contained in any judgment, decree or order of any court, for the period
commencing on and from the 3rd
day of April, 1997 and ending on the day on which the Payment of Gratuity
(Amendment) Act, 2009, receives the assent of the President, the gratuity shall
be payable to an employee in pursuance of the notification of the Government of
India, in the Ministry of Labour and Employment vide Number S.O. 1080, dated the 3rd day of April, 1997 and the said
notification shall be valid and shall be deemed always to have been valid as if
the Payment of Gratuity (Amendment) Act, 2009 had been in force at all material
times and the gratuity shall be payable accordingly:
Provided that nothing contained
in this section shall extend, or be construed to extend, to affect any person
with any punishment or penalty whatsoever by reason of the non-payment by him
of the gratuity during the period specified in this section which shall become
due in pursuance of the said notification."
In a statement of objects and
reasons of the amendment Act, it said:
"Keeping in view the
observations of the Hon'ble Supreme Court, it is proposed to widen the
definition of 'employee' under the said Act in order to extend the benefit of
gratuity to the teachers."
Supreme Court did not consider 2009 Amendment
The judgment impugned before the Supreme Court was delivered by the
Jharkhand High Court in the year 2008, before enactment of the 2009 amendment.
Even then, the high court distinguished the Ahmadabad Pvt. Primary Teachers Association judgment on the ground
that it is applicable only to the primary teachers working in primary schools
and since the case at hand is not a case of a primary teacher, it has no
application to this case.
The Supreme Court, while
considering the appeal, observed that the high court made an incorrect reading
of the SC judgment. It seems no one brought to the notice of the court about
the 2009 amendment, which is squarely applicable in this case.
Some Judgments Post Amendment
·
In 2012, the Bombay High Court, taking note of
this amendment, held that a teacher is
an 'employee' within the meaning of Section 2(e) of the said Act and hence the
provisions of the said Act were applicable - The President/Secretary vs Shri
Pradipkumar on 21 February, 2012. -- There
is no escape but to hold that a Teacher is an 'employee' within the meaning of
Section 2(e) of the said Act and hence the provisions of the said Act are
applicable.
·
The Chhattisgarh
High Court has also held so in St.Xaviers
H.S.School v/s State Of Chhattisgarh And Ors on 11 December, 2015 – There is
no ground to deny the statutory payment
of gratuity under the Act of 1972 to teachers and even on the ground of
financial hardship, petitioner-school cannot avoid the statutory obligation. It
is quite vivid that teacher is covered under the definition of Section 2(e) of the amended Act of 1972
and gratuity is "property" within the meaning of Article 300-A of the Constitution of India.
·
Last month, a single bench of the Orissa High Court in The President v/s Appellate Authority Under The on 18 December,
2018 – held that without taking note of the amendment, concluded that teachers are clearly not
covered in the definition of employee under the Act.
This judgment Birla Institute of Technology Vs.
State of Jharkhand: decided on 07.01.2019 by Hon'ble Supreme Court) is based on
the earlier judgment of Hon’ble Supreme Court in Ahmedabad Pvt. Primary Teacher
Association Vs. Admn. Officer passed on 13.01.2004 {reported as (2004)1 SCC
755}. After this judgment, by Act 47 of 2009 (w.r.e.f. 3-4-1997), the
definition of Section 2(e) in the Payment of Gratuity Act, 1972 was amended.
This changed definition of “employee” vide amendment of 2009, has not been
considered in this judgment. Therefore, this judgment is liable to be reviewed.
