In the matter of Birla Institute of Technology vs The State of Jharkhand and Ors., Civil Appeal No. 2530 of 2012, the Apex Court observed that irrespective of the nature of employment, a Teacher shall not be entitled to claim Gratuity under the provisions of the Payment of Gratuity Act, 1972 (‘Act’).


Respondent No. 4 in the said matter, joined the services of the appellant organization in the year 1971 as an Assistant Professor and thereafter superannuated in 2001. Beyond superannuation, when his claim for gratuity was rejected by the appellant organization, he approached the Controlling Authority under the Act. The authority awarded a sum of Rs. 3,38,796/- towards gratuity to Respondent No. 4. On being approached by the appellant through a writ petition, the High Court upheld the order of the controlling authority and dismissed the Writ petition. The appellant challenged the said order through this appeal before the Apex Court.


The Supreme Court observed that a teacher, irrespective of the type of educational institute he/she is working in, is not an ‘employee’ u/s 2(e) of the Payment of Gratuity Act, 1972 and therefore was not entitled to claim gratuity from the Appellant.

The Hon’ble Court also made a distinction between the judgement of Ahmadabad Pvt. Primary Teachers Association vs. Administrative Officer, giving reasons that while the said judgement was only applicable to teachers working in primary schools, the present case deals with the broader spectrum of the teaching community as a whole. The Hon’ble bench comprising of Justice Abhay Manohar Sapre and Justice Indu Malhotra reiterated the observations made in the said case which were as follows:

Even if all the words are read disjunctively or in any other manner, trained or untrained teachers do not plainly answer any of the descriptions of the nature of various employments given in the definition clause. Trained or untrained teachers are not “skilled”, “semi-skilled”, “unskilled”, “manual”, “supervisory”, “technical” or “clerical” employees. They are also not employed 9 in “managerial” or “administrative” capacity. Occasionally, even if they do some administrative work as part of their duty with teaching, since their main job is imparting education, they cannot be held employed in “managerial” or “administrative” capacity. The teachers are clearly not intended to be covered by the definition of “employee”.


The said judgement of the Apex Court has been observed as Per Incurium on the following grounds:

  • In the year 1997, a notification was issued by the Government of India wherein benefits under the Payment of Gratuity Act, 1972 was extended to educational institutions employing 10 or more people; (Notification S.O. No. 1080 dated 03.04.1997)
  • In the year 2009, the definition of ‘employee’ under the Payment of Gratuity Act, 1972 was amended; Also, sec 13A was inserted which validated the said Notification S.O. No. 1080 dated 03.04.1997;

Various Courts across the Country have expressed different opinions in the appreciation of the Amendment of 2009. For instance, The President/Secretary vs Shri Pradipkumar W.P. No. 3415/2011 wherein it was held that a teacher is an ‘employee’ within the meaning u/s 2 (e) of the Act in the light of the said Amendment. On the other hand, The President vs Appellate Authority, W.P.(C) No. 12929 of 2018, a single judge bench of the Orissa High Court failed to appreciate the said judgement and held that teachers were not covered as far as entitlements under the Payment of Gratuity Act, 1972 is concerned.

Nevertheless, what is evident is the fact the Apex Court in the matter of Birla Institute of Technology vs The State of Jharkhand and Ors. has failed to appreciate both the Notification S.O. No. 1080 dated 03.04.1997 and the Amendment of 2009.

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