2004 (1) TMI 639 - SC - Indian Laws

Provisions are in the nature of social-security measures like employment insurance, provident fund and pension - Held that gratuity under the Payment of Gratuity Act, 1972 is no longer in the realm of charity but a statutory right given to the employee.

Summary

Issues Involved:
1. Definition of 'employee' under Section 2(e) of the Payment of Gratuity Act, 1972.
2. Applicability of the Payment of Gratuity Act, 1972 to teachers.
3. Interpretation of the term 'employee' in the context of various labor legislations.
4. Legislative intent regarding the inclusion of teachers within the ambit of the Payment of Gratuity Act, 1972.

Issue-wise Detailed Analysis:

1. Definition of 'employee' under Section 2(e) of the Payment of Gratuity Act, 1972:
The definition of 'employee' as per Section 2(e) of the Act includes any person employed on wages in various establishments to do skilled, semi-skilled, unskilled, manual, supervisory, technical, or clerical work but excludes those holding posts under the Central or State Government governed by other Acts providing for gratuity. The key terms for interpretation are 'skilled', 'semi-skilled', 'unskilled', 'manual', 'supervisory', 'technical', and 'clerical' work.

2. Applicability of the Payment of Gratuity Act, 1972 to teachers:
The Full Bench of the High Court of Gujarat concluded that teachers do not fall within the definition of 'employee' under Section 2(e) of the Act. The court examined whether teachers employed in schools run by Ahmedabad Municipal Corporation could claim gratuity under the Act. The High Court held that teachers, even if they fall within the main part of the definition, are excluded by the last exclusionary clause of the definition.

3. Interpretation of the term 'employee' in the context of various labor legislations:
The court compared the definition of 'employee' in the Payment of Gratuity Act with definitions in other labor legislations such as the Minimum Wages Act, Payment of Bonus Act, and Employees' Provident Funds Act. The court noted that while the definition in the Employees' Provident Funds Act is broad and inclusive, the definition in the Payment of Gratuity Act is restrictive and does not cover teachers. The court cited previous judgments, including A. Sundarambal v. Govt. of Goa, Daman and Diu and Haryana Unrecognised Schools' Association v. State of Haryana, where it was held that teachers do not perform skilled, unskilled, manual, supervisory, technical, or clerical work.

4. Legislative intent regarding the inclusion of teachers within the ambit of the Payment of Gratuity Act, 1972:
The court emphasized that the legislative intent was not to include teachers within the definition of 'employee' under the Act. The court observed that if the legislature intended to cover all categories of employees, it would have used broader language similar to that in the Employees' Provident Funds Act. The court concluded that teachers, who are primarily engaged in imparting education, do not fit the descriptions of employment categories listed in the definition clause of the Act.

Conclusion:
The Supreme Court upheld the view that teachers are not covered under the definition of 'employee' in Section 2(e) of the Payment of Gratuity Act, 1972. The appeal was dismissed, and the court suggested that it is within the legislature's purview to consider separate legislation for providing gratuity benefits to teachers. The judgment reinforces that the current legislative framework does not extend gratuity benefits to teachers under the Payment of Gratuity Act, 1972.