Is It Legal for a Private School to Withhold Gratuity After 9 Years of Service? Seeking Advice

Gratuity Laws in Private Schools

Is there any law for not giving gratuity after completing 5 years of service? My friend worked in a reputed private school in Delhi. She resigned from her job after completing 9 years of regular service.

Now, the school management refuses to release her gratuity amount 5 months after leaving. They gave the excuse of the 6th pay commission, informing her that it is not necessary to pay gratuity and leave encashment in a private school. Is it possible?

Legal Action for Gratuity Non-Payment

If she wants to take legal action, then at what place/department should she file a complaint/suit? Can anyone advise me on this case?

Gratuity Eligibility in Private Schools

Pay Commission recommendations are not applicable to private schools, whereas the gratuity applicability of such establishments is governed by the Payment of Gratuity Act. However, until now, teachers are not eligible to receive gratuity. At the same time, all administrative staff and the Principal, who also perform some kind of administrative work in connection with the school, are eligible to receive gratuity at the same rate as applicable to employees of industrial and other establishments as per the provisions of the Payment of Gratuity Act.

However, a bill has been presented to amend the Payment of Gratuity Act, incorporating teachers under the definition of employees so that they would also become eligible to receive gratuity. I believe that this amendment has not yet become an Act. Therefore, I advise you to search for any notification regarding this matter, rather than focusing on the sixth pay commission.

Regards,
Madhu.T.K

Is there any other legal consultant who can advise or suggest on this matter regarding where she can file a complaint?

The authority to hear matters connected with gratuity is the District Labour Officer. You can contact him for advice. As stated earlier, at present, teachers are not covered by the Payment of Gratuity. However, you can confirm this by consulting him.

Regards, Madhu.T.K

Gratuity in Schools in Delhi: As per Chapter IV of the Delhi School Education Act 1973, salaries of employees, scale of pay and allowances, medical facilities, pension, gratuity, provident fund, and other prescribed benefits of employees of recognized private schools shall not be less than those of employees of the corresponding status in schools run by the appropriate authority.

If schools are not implementing the above provisions, the Director of Education, Delhi can take action to withdraw recognition of the school. Concerned teachers can appeal to the Director of Education, Delhi and also can go to the Delhi School Tribunal.

Regards,
IK Arora

Really good information about gratuity for teachers by our Cite-HR friends. If anybody has the Supreme Court notification/order, please share it on this forum. That would give more clarity to all.

The suggestion from the Supreme Court to include teachers for gratuity payment was considered by Parliament, and the bill to effect this change was passed on 18.12.2009. The definition of an employee was amended to include "to do any kind of work."

Bill attached

Dear friends,

Only a bill has been presented, and so far, no amendment has taken place in the Gratuity Act enforcing the same in it. Yes, not only Delhi Education Rules, but the pertinent rules of almost all states have similar provisions that provide for gratuity to the "employees" employed in schools.

What is interesting is that by employees, only employees employed in administrative functions like clerks, attendants, laboratory assistants, etc., are meant, but not teachers as they are engaged in a NOBLE PROFESSION.

Regards,
Madhu.T.K

If the school regularly pays off the gratuity to eligible teachers, then such a rule applies to the school.

Please reply.

Dear Members,

By notification dated 31.12.2009, an employee has been included in the definition of the employee. As far as I remember, this notification was provided by one of the CiteHR members, which I am attaching here for the ready reference of other members. One of our authorities under The Payment of Gratuity Act, 1972, has also accepted this fact.

Regards,
R.N. Khola

Dear Madhu, The Pay Commission recommendations are not applicable to private schools, whereas the gratuity applicability of such establishments is governed by the Payment of Gratuity Act. However, until now, teachers have not been eligible to receive gratuity. At the same time, all administrative staff and the Principal, who also perform some kind of administrative work in connection with the school, are eligible to receive gratuity at the same rate as applicable to employees of industrial and other establishments as per the provisions of the Payment of Gratuity Act.

A bill has been presented to amend the Payment of Gratuity Act, incorporating teachers under the definition of employees so that they would also become eligible to receive gratuity. I believe that this amendment has not yet become an Act. Therefore, I advise you to search for any notification in this regard rather than focusing on the sixth pay commission.

Regards, Madhu.T.K

Hi, As per my understanding, the definition of "Employee" has already been amended by the Government of India via notification dated December 31, 2009. By this definition, teachers are covered under the purview of the Payment of Gratuity Act. Before this, in 1997, this Act was extended to educational institutes as well. Now, all kinds of employees performing any kind of work are covered by this amendment.

I worked for 20 years in a public school in Delhi as a PGT Computer Science teacher. However, they are not giving me gratuity. Kindly advise me on legal action.

Eligibility for Gratuity Under the Payment of Gratuity Act

With the amendment in the definition of an employee under the Payment of Gratuity Act, you are eligible to receive gratuity. Please apply for gratuity using Form I.

Regards,
Madhu.T.K

Dear All,

In our view, the position of the law has been settled; a teacher in a school is eligible for gratuity if they have put in the required years of continuous service, which is five years. After the amendment of 2009, the definition of an employee has been enlarged.

I am attaching a decision of the Bombay High Court, Nagpur Bench in Writ Petition No. 3415/2011 decided on 21.2.2014 - Vidharbh Youth v. Pradip Kumar. This judgment can be downloaded from the official site of the High Court.

Regards,
Amar K. Ramani