Payment of Gratuity Act, 1972 is amended [vide Amendment Act 47 of 2009] with retrospective effect [w.e.f 3/4/1997] to validate various gratuity payments made by various School Managements to their  teacher under the Government Notification No. SO 1080 dated 3/4/1997. The said notification was struck down by the Supreme Court asultra vires the Parent Act of 1972. According to the Supreme Court, Teachers do not come within the purview of definition of ‘Employee‘ as given under Section 2(e) of the Act. Therefore, to overcome the above said judgment of Supreme Court and to cure the deficiency in the definition of ‘Employee‘, the Parliament has brought the present amendment. After the amendment, Section 2(e) reads :

2(e)-’employee’ means any person (other than an apprentice) who is employed for wages, whether the terms of such employment are express or implied, in any kind of work, manual or otherwise, in or in connection with the work of a factory, mine, oilfield, plantation, port, railway, company, shop or other establishment to which this Act applies, but does not include any such person who holds a post under the Central Government or a State Government and is governed by any other Act or by any rules providing for payment of Gratuity;

The amended definition of ‘employee’ is very broadly phrased in juxtapose with its previous version and would include anyone any everyone who are employed for wages in any establishments where the Gratuity Act is made applicable.

The Parliament has also included a new provision viz. Section 13-A which validates all the gratuity payments made till the date of amendment under the aforesaid controversial notification. The Proviso attached to new Section 13-A also states that none would suffer from any penalty/punishment for non-payment of gratuity due to the employees during the interim uncertain period [ie. 3/4/1997 to 31/12/2009].