Educational institution is not an establishment under the Telangana Shops and Establishments Act: Telangana HC

Telangana High Court has ruled that an educational institution is not covered by Section 2(10) of the Telangana Shops and Establishments Act, 1988, which defines the meaning and definition of “establishment.”

To reach this conclusion, Chief Justice Satish Chandra Sharma and Justice B. Vijaysen Reddy considered Supreme Court and Kerala High Court rulings.

The appellant institution is a school, and respondent No.3/employee started working as n Attender in the Nutrition Lab Department in 1985. In December 2009, she submitted her resignation and paid her service dues.

She filed an appeal with the Assistant Labour Commissioner under the Telangana Shops and Establishments Act, 1988, alleging that the appellant institution had wrongfully terminated her employment.

The appellant institution filed a counter-affidavit claiming that the employee had voluntarily resigned, that her dues had been paid, and that the appeal deserved to be dismissed.

Despite the fact that the employee’s appeal under Section 48(1) of the Shops and Establishments Act, 1988 was not maintainable, the appeal was permitted by an Order issued in July 2019, requiring the appellant institution to reinstate the employee with full back wages.

The appellant institution filed a writ petition claiming that it is not an establishment and is not subject to the Shops and Establishments Act’s provisions; nevertheless, the Single Judge denied the writ petition, which was appealed to the division bench.

Court’s Order 

The Court remarked at the outset that the institution was controlled by the Telangana Education Act, 1982, which provides for the redress of grievances of the type concerned in the current writ appeal.

Furthermore, the Court noted that the Supreme Court has considered whether an educational institution fits within the concept of ‘establishment’ or not in the case of Ruth Soren v. Managing Committee (2001) 2 SCC 115.

In that instance, the Apex Court declared that an educational institution does not fall within the scope of establishment under the Bihar Shops and Establishments Act, which is identical to the definition under the Telangana Shops and Establishments Act.

The Telangana High Court decided to set aside the Order passed by the Appellate Authority in July 2019 as well as the Order passed by the Single Judge after the Supreme Court held that an educational institution may fall within the meaning of ‘industry,’ but will certainly not fall within the meaning and term ‘establishment.’

In the matter of Sree Narayana Educational Institution v. Assistant Labour Officer 2001 (91) FLR 284, the Kerala High Court reached a similar conclusion.