Gratuity of teachers employed in government-aided schools is not governed by the Gratuity Act but by State Rules: SC
On July 14, 2025 (Monday), the Supreme Court (SC) of India held that the gratuity of teachers employed in government-aided schools is not governed by the Payment of Gratuity Act, 1972, but by the State service rules framed under Article 309 of the Indian Constitution. The bench was hearing a case concerning an aided school teacher from Maharashtra who died while in service. Upon her death, her son (appellant/petitioner) claimed gratuity under the Payment of Gratuity Act, 1972, which was rejected by the original authority and the appellate authority under the Gratuity Act, and also by the High Court. The petitioner, therefore, appeared before the Supreme Court bench of Justice Sudhanshu Dhulia and Justice K. Vinod Chandran.
After hearing the matter, the SC bench said, “It must be observed that a teacher in an aided school for all practical purposes is akin to a post under the State Government. Pertinent is the fact that the posts in aided schools are either sanctioned by the Government or approved in accordance with the Rules and pay and allowances are also paid by the Government. The aided school teachers are also entitled to some of the conditions of service as are applicable to Government teachers, with entitlement of pension, provident fund and gratuity as applicable, in accordance with the Rules brought out under Article 309 of the Constitution of India. Though strictly speaking the teachers may not be holding a post under the State Government, it is akin to a post under the State Government, at least for the monetary benefits of pay and allowances, while in service, as also pension and other benefits on retirement.”
During the proceedings, the SC bench noted, “On death prior to five years of service, the benefits under the Rules of 1982 would be more beneficial to the dependents of the employees.” Apart from this, the top court also declined the authorities’ insistence that ‘the petitioner had never approached the respondents with a proper documentation as to the death and legitimacy of the claim’. The bench said, “We find absolutely no reason to direct the petitioner to produce a legal heirship certificate .. The nomination made by the deceased employee while she was alive only absolves the employer from finding out the different legal heirs for the purpose of making payments apportioning their separate shares.”
Lastly, the top court ordered, “The petitioner shall approach the first respondent with an application for payment of DCRG in accordance with the Rules of 1982 along with an undertaking to indemnify the Government and the Society which runs the aided school from any claims made by any other legal heir, by a notarised affidavit. The same shall be forwarded to the Education Officer, who shall make the payment expeditiously.”
