The Payment of Gratuity Act was amended by ‘The Payment of Gratuity (Amendment) Act, 2009 that was deemed to have taken effect from 03 April 1997.
The amendment expanded the scope of definition of “Employee” covering any kind of work, manual or otherwise, in connection with work of the factory, mines, oilfields, plantation, port, railway company, shop or establishments to which the Act applies. Thus, brought Teachers within its scope thereby enabling the applicability of Payment of Gratuity Act to Teachers as well.
This was challendged by some of the educational institutions that were dismissed by the High Courts. The educational institutions had filed Appeal against the orders of the Hon’ble High court by filing Special Leave Petition before the Hon’ble Supreme Court. The Hon’ble Supreme Court in Civil Appeal No. 8162 of 2012 decided on 29 August 2022 in the case of Independent Schools Federation of India (Regd.) vs. Union of India and another and other connected Appeals and Writ Petitions upheld the amendment to the Payment of Gratuity Act.
An extract of the operative part of this judgment shared here below:
For the reasons mentioned above, the aforesaid appeals, transfer case and the writ petitions are dismissed. The stay orders, as stated above, are vacated. The Private schools would make payment to the employees/teachers along with the interest in accordance with the provisions of the PAG Act within a period of 6 weeks from today and in case of default, the employees/teachers may move the appropriate forum to enforce payment in accordance with the provisions of the PAG Act. In the facts of the case, there will be no orders as to costs.