The Supreme Court has ruled that teachers are entitled to gratuity, in a huge respite for the teaching community across the country. Recalling its earlier judgement in which it had rejected teachers’ claims to gratuity, the court said, “In the light of the amendment made in the definition of the word ‘employee’ by Parliament with retrospective effect from 03.04.1997, the benefit of the Payment of Gratuity Act was also extended to the teachers from 03.04.1997.” The judgement will have implications for all teachers who have retired since 1997. The act was amended in 2009 but it was put on effect retrospectively. A bench of justices AM Sapre and Indu Malhotra noted that they had erred in their January 2019 judgment, as it was not brought to their notice that Parliament had by an amendment brought teachers within the definition of “employees” that entitled them to gratuity.
The Supreme Court said gratuity money of an employee can be withheld and forfeited in case of recovery of dues such as overstaying in official accommodation. A division bench of the Supreme Court of India, comprising of Hon’ble Mr. Justice Uday Umesh Lalit and Hon’ble Mr Justice Sanjiv Khanna, vide judgment dated 29 April 2020 in the matter of BCH Electric Limited v Pradeep Mehra, dealt with applicability of Section 4 (5) of the Payment of Gratuity Act, 1972 (Act). It held that Section 4 (5) of the Act will only apply if there are alternate options for the employee under the Act and under the terms of the contract with the employee and the employee is entitled to receive higher available benefit amongst the two available options.
Further to that, I am enclosing the reported judgment of the Supreme Court of India, dated 23.09.1980 Surendra Kumar Verma Etc. versus The Central Government Tribunal cum Labour Court. In this decision, the Court has observed as under:
“The provision appears to be plain enough. Section 25-F requires that a workman should be in continuous service for not less than one year under an employer before that provision applies. While so, present Section 25 B (2) steps in and says that even if a workman has not been continuous service under an employer for a period of one year, he shall be deemed to have been in such continuous service for a period of one year, if he has actually worked under the employer for 240 days in the preceding period of twelve months. There is no stipulation that he should have been in employment or service under the employer for a whole period of twelve months. In fact, the thrust of the provision is that he need not be. That appears to be the plain meaning without gloss from any source.”
I hope this will be sufficient clarification about the applicability of gratuity of an individual person.