Employment LawConsideration of Nature of Work and Service Duration for Classification of Employees as Temporary or Permanent

The Hon’ble Supreme Court, in the case of Rajkaran Singh & Ors. vs Union of India & Others, Civil Appeal Numbers 30976 of 2017 decided on 22.08.2024, held that the Appellants, despite being classified as temporary employees, were entitled to the same benefits as regular employees due to the nature of their long-term service and the work they performed.

FACTS

Rajkaran Singh and others, (hereinafter referred to as “the Appellants”) were employed to manage the Compulsory Saving Scheme Deposits (hereinafter referred to as “SSD”) Fund of the Special Frontier Force (hereinafter referred to as “SFF”). Their roles included positions such as Junior Accountant, Accountant, Upper Division Clerk (hereinafter referred to as “UDC”), and Lower Division Clerk (hereinafter referred to as “LDC”), and they were compensated based on running pay scales.

The SSD Fund, a welfare initiative, was funded through contributions from the salaries of SFF personnel. During their service, the Appellants received allowances like Traveling Allowance (hereinafter referred to as “TA”), Dearness Allowance (hereinafter referred to as “DA”), House Rent Allowance (hereinafter referred to as “HRA”), and other benefits as per the 4th and 5th Central Pay Commissions (hereinafter referred to as “CPC”). However, when the 6th CPC was implemented on 01.01.2006, the Appellants were excluded from its benefits. Instead, they were given an ad-hoc payment of Rs. 3,000 per month.

The Appellants served in various capacities for periods ranging from 8 to 37 years before retiring. For instance, Rajkaran Singh served for 37 years and 8 months and retired as a LDC in August 2012. Others, such as Jagat Ram Joshi and Vishu Dutt Tripathi, also had similar long tenures before retirement. Upon retirement, the Appellants claimed pensionary benefits under the 6th CPC, but their requests were denied on the grounds that they were not classified as Government employees under the Central Civil Services (Pension) Rules, 1972 (hereinafter referred to as “CCS Rules”).

Aggrieved by this decision, the Appellants filed applications before the Central Administrative Tribunal (hereinafter referred to as “CAT”), which were dismissed in October 2016.

The CAT ruled that the Appellants were not Government employees as their salaries were paid from voluntary contributions and not from Government funds. This decision was upheld by the Delhi High Court in 2017, leading the Appellants to challenge the rulings in the Supreme Court, through the present Appeal.

ISSUES BEFORE THE SUPREME COURT

1. Whether the Appellants, despite being classified as temporary employees, were entitled to pensionary and other benefits under the 6th CPC?
2. Whether the SSD employees could be considered Government servants based on their long-term service and the nature of their duties?

CONTENTIONS OF THE PARTIES

The Appellants argued that despite being classified as temporary employees, they had served the SFF for over three decades in roles such as Junior Accountant, UDC, and LDC, managing the SSD Fund. They emphasized that they had received various allowances and benefits similar to the regular Government employees, such as promotions, leave, and increments.

The Appellants contended that denying them pensionary benefits under the 6th CPC based on their temporary status was arbitrary and violated their fundamental rights under Article 14 of the Constitution. The Appellants further argued that their service conditions aligned with regular Government employees, and the lack of recruitment through statutory procedures should not disqualify them from these benefits.

Relying on the principle of equal pay for equal work, the Appellants cited cases such as State of Punjab v. Jagjit Singhand Randhir Singh v. Union of India (1982) 1 SCC 618 to support their claim for equal treatment. They also referred to State of Karnataka v. M.L. Kesari (2010) 9 SCC 247, arguing that employees who had served for over ten years deserved regularization and service benefits under the doctrine of regularization.

The Union of India (hereinafter referred to as “the Respondents”) argued that the SSD Fund was a voluntary welfare initiative funded through personal contributions of the SFF personnel, and as such, the Appellants were not entitled to the pensionary benefits granted to regular Government employees.

The Respondents asserted that the Appellants were appointed temporarily and did not undergo the formal recruitment process required for Government service. Their salaries were not paid from the Consolidated Fund of India, and their employment did not also fall under the CCS Rules.

The Respondents emphasized that the Appellants’ benefits were fixed based on the financial health of the SSD Fund, and their pay could not be equated with that of regular Government employees. They further argued that the Appellants’ employment was Non-Governmental in nature, citing the CAT’s findings that their services were not governed by statutory obligations. The Respondents concluded that extending pensionary benefits would place an undue financial burden on a welfare scheme primarily funded by voluntary contributions.

DECISIONS AND FINDINGS

The Hon’ble Supreme Court ruled in favour of the Appellants, stating that the denial of pensionary benefits under the 6^thCPC was arbitrary and violated their fundamental rights guaranteed under Articles 14 and 16 of the Constitution of India. The Supreme Court recognized the long tenure of service that the Appellants provided to the SFF, which spanned over three decades, and noted that their responsibilities were comparable to those of regular Government employees.

The Supreme Court emphasized that classifying the Appellants as temporary employees should not prevent them from receiving benefits typically granted to permanent Government employees, especially considering their continuous service and the nature of their duties in managing the SSD Fund.

Furthermore, the  Supreme Court found that the Appellants had been treated similarly to regular employees regarding promotions, allowances, and increments, indicating substantial integration into the Governmental structure.

In reaching this conclusion, the Supreme Court referenced previous judicial decisions, including Ajay Hasia v. Khalid Mujib Sehravardi (1981) 1 SCC 722 and Pradeep Kumar Biswas v. Indian Institute of Chemical Biology (2002) 5 SCC 111, which outline the criteria for determining whether an entity or individual can be classified as an instrumentality or agency of the state.

The Supreme Court held that the Appellants were entitled to the same pensionary benefits and other advantages under the 6^th CPC as their counterparts in the Accounts Section of the SFF. Consequently, the Supreme Court directed the Respondents to extend these benefits to the Appellants, affirming that their long-standing service and the nature of their employment warranted equitable treatment within the framework of Government employment benefits.

AMLEGALS REMARKS

The Supreme Court’s decision in the present case represents a pivotal moment in the discourse surrounding employee rights and classifications within Government service. By recognizing the long-term service and comparable responsibilities of the Appellants to those of regular employees, the Supreme Court has underscored the importance of equitable treatment in employment benefits.

This decision not only addresses the specific grievances of the Appellants but also sets a broader precedent for how temporary employees are viewed within the framework of public service. The Supreme Court’s emphasis on the principles of equality and fairness reinforces the notion that the nature of work and duration of service should be critical factors in determining entitlement to benefits. This ruling serves as a reminder that all employees, regardless of their initial classification, deserve recognition for their contributions and should be afforded the same rights and benefits as their permanent counterparts. Overall, this judgment reflects a commitment to upholding fundamental rights and ensuring that justice is served in the realm of employment, promoting a more inclusive and fair approach to public service employment practices.

Team AMLEGALS