Private School Employee’s Termination Dispute: Supreme Court Upholds Back Wages Liability

The case of Educational Society, Tumsar & Ors. vs. State of Maharashtra & Ors. revolves around the termination of a school employee and the subsequent dispute regarding who should bear the financial burden of back wages. The Supreme Court’s judgment clarifies crucial legal principles on school management responsibilities and state funding.

Background of the Case

The appellant, Educational Society, Tumsar, runs a government-aided school receiving 100% financial support from the State of Maharashtra. The issue arose when the school terminated the services of respondent No. 4, an assistant teacher, which was later challenged in the School Tribunal, Nagpur. The tribunal ruled in favor of the teacher, ordering his reinstatement along with full back wages.

Despite an initial settlement between the school and the teacher, the appellants later sought to shift the financial liability of the back wages to the state government. The High Court dismissed their petition, affirming that the responsibility remained with the school management. Dissatisfied with this decision, the appellants approached the Supreme Court.

Petitioner’s Arguments

The appellants contended that since the school is 100% aided by the government, any salary-related payments, including back wages resulting from wrongful termination, should be borne by the state. They relied on a Government Resolution dated March 14, 1978, which stipulated that if a school reinstated an employee based on an appeal decision, the state would bear the financial burden.

Furthermore, the appellants argued that they had followed due process in terminating the employee and that denying state funding for back wages would impose an undue financial burden on the school.

Respondent’s Arguments

The respondents, including the state government, countered that the school management had acted unlawfully by terminating the employee without following proper procedures as mandated by the Maharashtra Employees of Private Schools (Conditions of Service) Regulation Act, 1977. Since the school violated statutory provisions, it could not shift the financial burden to the state.

The state further argued that the 1978 Government Resolution had lost its legal standing after the enactment of the 1977 Act, making it irrelevant to the case.

Supreme Court’s Judgment

The Supreme Court upheld the High Court’s decision, holding that the liability to pay back wages rested with the school management. The Court made the following key observations:

• The school failed to adhere to proper disciplinary procedures while terminating the employee.
• The School Tribunal explicitly ruled that the termination was unlawful, and its findings were not challenged by the state.
• The 1978 Government Resolution was rendered ineffective due to the later enactment of statutory provisions governing school employees’ service conditions.
• Since the state government was not involved in the unlawful termination, it could not be held responsible for the financial consequences of the school’s actions.

In its concluding remarks, the Supreme Court stated: “Had the provisions of the Rules been followed, the termination order would have involved the state government’s approval. However, in the present case, the school management acted independently and unlawfully, making it liable for the back wages.”

Conclusion

This judgment reinforces the principle that government-aided institutions must adhere to statutory regulations while handling employee matters. It prevents private school managements from shifting financial liabilities onto the state when they act beyond their authority.

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Download Judgment: Educational Society, vs State of Maharashtra Supreme Court of India Judgment Dated 01-02-2016 (67a333a8a929ae59d519762a).pdf