VRS employees stand on different footing than those who retired upon achieving age of superannuation

Maharashtra State Financial Corporation Ex-Employees Association & Ors Vs State of Maharashtra & Ors (Supreme Court of India)

Supreme Court held that employees who secured VRS benefits and left the service of MSFC voluntarily during this period, stand on a different footing. They cannot claim parity with those who worked continuously, discharged their functions, and thereafter superannuated.

Facts-

The appellant association (consisting of employees who had superannuated, opted for VRS, resigned, or legal heirs of expired employees of the respondent corporation) challenge a judgment¹ of the Bombay High Court (Nagpur bench). In that proceeding, the appellants had complained of discrimination against the decision dated 29.03.2010, of the Industry, Energy and Labour Department, Government of Maharashtra (hereafter “the State”). That decision denied the benefit of revision of pay scales, as recommended by the Fifth Pay Commission, to the employees of the Maharashtra State Financial Corporation (hereafter “MSFC”) who had retired or died during the period of 01.01.2006 to 29.03.2010. That decision of the State made the revision of pay scale as a result of the Report of the Fifth Pay Commission applicable to 115 employees of MSFC who were working as on 29.03.2010. The revision, however, was given effect from 01.01.2006.

The appellants had urged before the High Court, that denying them the benefit of pay scales was discriminatory and arbitrary, because they were in continuous service, and had even received the benefit of interim revision, pending finalization of pay scales pursuant to the Pay Commission Report. It was urged that those in employment on and after 29.03.2010, and those who continued in service after 01.01.2006 but retired before 29.03.2010, belonged to the same category. The only difference between those who were in service after the latter date, was that they had longer period of service. However, the crucial date for grant of pay revision, was the date from which it was given effect to, i.e., 01.01.2006. As all the appellants were in service as on that date, the denial of pay revision, which was concededly for the period they had worked, amounted to not only hostile discrimination, but also withholding of pay revision benefits, legitimately and rightfully theirs.

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