Supreme Court to Resolve the Question of Liability to Pay Gratuity to Government School Teachers

In an interesting development concerning social security laws in India, the Supreme Court is soon going to decide on the question of liability to pay gratuity to teachers of government schools considering they receive financial aid from government authorities.

Whether it is the institution or the state that needs to pay gratuity is the crux of the special leave petition filed before the Supreme Court.

Contrary views over the payment of gratuity

Last year the Chattisgarh High Court in Ambika Mission Boys Middle School vs. the State of Chhattisgarh was of the view that the state will fall under the purview of the employer as per the definition given under the payment of Gratuity Act, 1972.

However, in a recent judgement passed by the Madhya Pradesh High Court, the court held that the responsibility to pay gratuity to teachers of government-aided schools lies on the institution. The reason for arriving at such a conclusion was the lack of master-servant relationship between the government-aided teachers and the state since the teachers are not appointed by the state. 

Supreme Court Issues Notice

While the three-judge bench of the Supreme Court has issued a notice in the instant SLP, it will be interesting to see what it decides in the matter

There appears to be contrary views of the Madhya Pradesh High Court and the Chhattisgarh High Court on the issue as to whose liability would it be to pay gratuity in case of Government aided schools under the Payment of Gratuity Act, 1972. - Supreme Court's Order