Retrospective gratuity amendment brings teachers within employee coverage and sustains entitlement from the statutory effective date.

A retrospective amendment to the Payment of Gratuity Act expanded the definition of "employee" to include teachers from 03.04.1997, so the earlier exclusionary precedent could no longer govern entitlement. The Court noted that the amendment had direct bearing on the dispute and that reliance on the prior decision was misplaced because it had not considered the amended definition. Teachers were therefore entitled to claim gratuity under the Act from the date the retrospective amendment took effect.

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Issues: Whether teachers were entitled to gratuity under the Payment of Gratuity Act after the retrospective amendment to the definition of "employee" in Section 2(e), and whether the earlier decision excluding teachers could still be relied upon.

Analysis: The earlier order allowing the appeal was recalled because the retrospective amendment brought by the Payment of Gratuity (Amendment) Act, 2009, effective from 03.04.1997, had not been brought to the Court's notice. In view of that amendment, teachers were brought within the scope of the definition of "employee" in Section 2(e), and the earlier decision excluding them from the Act's coverage no longer governed the controversy. The Court held that the amendment had a direct bearing on the dispute and that reliance on the earlier precedent was misplaced.

Conclusion: Teachers were held entitled to claim gratuity under the Act from the date the retrospective amendment took effect, and the appeal was dismissed.

Ratio Decidendi: A retrospective statutory amendment enlarging the class of persons covered by the Act prevails over an earlier contrary interpretation, and the amended definition governs entitlement from the date specified by the legislature.

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