Teachers entitled to gratuity, rules SC

Why in news?

• The Supreme Court altered its judgment and said teachers were entitled to claim gratuity under the Payment of Gratuity Act 1972.
• In a rare move, the court had frozen the implementation of the court’s January 7 verdict held that a teacher is not an ’employee’ under the Payment of Gratuity Act.
• The Bench of Justices Sapre and Malhotra amending the law in 2009 to effectively include teachers within the ambit of ’employee’ under the Payment of Gratuity Act, 1972.

 Background: –

• 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.
• The case concerned an appeal that was based on an order of the Jharkhand High Court allowing the plea of a former assistant professor of Birla Institute of Technology for the gratuity amount.

The Payment of Gratuity Act, 1972

• In India gratuity is a type of retirement benefit. It is a payment made with the intention of helping an employee monetarily after his retirement.
• The general principal underlying gratuity scheme is that by service over a long period the employee is entitled to claim a certain amount as retirement benefit.
• The Payment of Gratuity Act was passed by Indian Parliament in 21 August 1972. The act came in force on 16 September 1972.
• As per Section 4(1), the completion of continuous service of 5 years is not required where termination of employment is due to death or disablement. In such case mandatory gratuity is payable.
• Gratuity is paid at a rate of 15 days wages for every completed year of service or part thereof in excess of Six months. The wages here means wages last drawn by the employee. 

(SC & judiciary)(The hindu)

Pic courtesy:The Hindu