Are Teachers Entitled to Gratuity from Their Joining Date or Only After 1997? Let's Discuss

Inclusion of Teachers in Gratuity Eligibility

The above-mentioned act was passed by the parliament to include 'teachers' under the definition of 'employee', thereby making teachers eligible for gratuity. The amendment was made with retrospective effect from 3rd April 1997.

Now, BHEL Shiksha Mandal, run by the Public Sector Enterprise BHEL's Bhopal Unit, has decided to include teachers for the payment of gratuity as well. While they are paying gratuity to non-teaching staff from their respective date of joining, they are considering the period of service of teachers only from April 1997, irrespective of the joining date.

The query is whether a teacher is eligible for gratuity from the date of joining or from 3rd April 1997, as decided by the management. How far is it correct on the management's part to make such a decision?

The government's decision is absolutely right. Gratuity is meant for one's future life. Like any other profession, teachers also need a worry-free life.

Gratuity Payment for Teachers

Gratuity is payable to employees for the length of service they have worked. However, teachers who retired on or after 1st April 1997 will receive gratuity for which they are eligible from the date of joining to the date of retirement, not with effect from 1st April 1997.

To clarify, teachers were not covered under the definition of the Payment of Gratuity Act 1972. After the amendment approved by Parliament, it became effective as of 1st April 1997. Therefore, those who have retired after April 1997 can now claim gratuity from their employer for the length of service performed from the date of joining to the date of retirement.

Dear Mr. G.V. Menon,

You have raised a very interesting point. I trust my views on the issue raised will be of help and use to you and also to several other teachers similarly placed.

As you have pointed out, the definition of the term "employee" was amended by an amendment to the Payment of Gratuity Act, and this amendment was given retrospective effect from 3-4-1997. If the contention of the management that the length of service of the teaching staff will be reckoned only from 3-4-1997 and not from their date of joining is to be accepted, then the question that arises is whether, in case any one of the non-teaching staff had joined the services of the school before 16-9-72 (the date on which the original PG Act 1972 came into force), the management would not reckon his services prior to 16-9-1972. It cannot do so. For, the PG Act, whether as it was originally passed or subsequently amended in the year 2009, does not specifically say that the services rendered prior to 16-9-1972 or 3-4-1977, as the case may be, have to be excluded from the qualifying service rendered by the employee. In the absence of any such specific exclusion in the P.G. Act, the stand of the management is not correct. The teachers are eligible from the date of their joining the services of the educational institution.

With regards,

Yes, I fully concur with the views of Mr. Hariharan. In this context, I filed one case before the Asst. Labour Commissioner and Controlling Authority, Payment of Gratuity Act 1972, Bhopal, based on the Amendment of Payment of Gratuity Act 2009. It states that teachers are now well within the definition of employees and eligible for gratuity for the service rendered by a teacher from the date of joining in April 1989 to the date of retirement in April 2003.

The Hon. Controlling Authority ordered one of the school authorities in Bhopal, M.P., to pay the eligible gratuity amount calculated from April 1989 to April 2003, approximately Rs. 51,000, and interest thereon from April 1989 till the date of the order in December 2010, totaling approximately Rs. 91,000. However, the school authorities did not obey the controlling order but preferred to appeal before the Appellate Authority, Labour Commissioner, Bhopal.

The Appellate Authority gave a decision for remand and returned the case to the Controlling Authority to review within two months on the objections raised by the council of the school. The objections included that no opportunity was given to defend the case, whereas, in fact, the school advocate attended the hearing and exchanged parliamentary enactment papers along with labor ministry, Govt. of India notifications, and other relevant papers. Notifications were published in Law Times in January 2010. Furthermore, two out of three hearings were conducted, and the case was reserved for order. The order directing the school to pay gratuity was issued as mentioned above.

The teacher applied directly to the controlling office after a lapse of seven years after retirement, which was considered time-barred. The applicant had approached the school authorities several times for the payment of gratuity personally, but they did not respond. Prior to the amendment in December 2009, private school teachers were not within the purview of the definition. In view of the Supreme Court decision in the Ahmedabad Primary Teachers Association case, Parliament therefore amended the definition, and the cause of action for the payment of gratuity arose to teachers from the date of the amendment/notification.

In my opinion, the Appellate Authority has not granted validity to the amendment that the amendment is effective from April 3, 1997. Those teachers who retired from April 3, 1997, onward are eligible to claim gratuity for their service period, even if they joined before April 1997 but retired after April 1997. If I am correct, even before April 1997, gratuity was payable to private teachers.

I would like to request your opinion on this case – whether or not the Appellate Authority's order for remand is justified. Additionally, what should be the further course of action? Please discuss and let us know if any cases have been decided in this context.