Background
In April 1997, the provisions of the PAG Act were made applicable to educational institutions with ten or more employees by a notification issued by the Central Ministry of Labour and Employment.
Private schools, being educational institutions with ten or more employees, were required to pay gratuity to their employees under the provisions of the PAG Act.
Some private schools, however, raised a disagreement, saying that teachers in educational institutions or schools are not “employees” as described in Section 2(e) of the PAG Act.
In 2004, the apex court, in Ahmedabad Private Primary Teachers’ Association vs Administrative Officer & Ors. held that teachers were not “employees” as per the definition of employees under the act as they were not performing any skilled, unskilled, semi-skilled, manual, supervisory, managerial, administrative, technical or clerical work.
However, the Act was later amended by the legislature to include teachers under the definition of employees.
This prompted several petitioners to approach the top court challenging the constitutional validity of amendment to section 2(e) and insertion of section 13A to the Payment of Gratuity Act with retrospective effect from 3 April 1997 vide the Payment of Gratuity (Amendment) Act of 2009.
Source: Barandbench
