Gujarat HC Orders State To Count Reinstated Daily-Wage Worker’s Pre-Reinstatement Service For Pension And Gratuity

In brief

The question

Whether reinstatement by the Labour Court, absent an express direction on continuity of service, required the State to treat the petitioner’s service as continuous for pay and retirement-benefit purposes.

The court held

The petition was allowed and the Rule made absolute.

It also directed

The respondents were directed to reconsider the petitioner’s entitlement to fixed pay from 1 July 1985 and regular pay scale from 1 July 1990; to count her service through retirement for pension, gratuity, and leave encashment; and to pay resulting differences within three months of receiving the order.

If payment was not made within that period, interest at 9% would accrue from the date of default.

Regular pension was also to be paid once the arrears were paid.

01Facts

The petitioner, a daily wager, was terminated in 1984. The Labour Court ordered her reinstatement on 29 November 2005 without back wages, but did not expressly address continuity of service.

¶ 3

She was reinstated in 2006 and retired on 30 September 2023. The State counted service from 2006 for pay-scale purposes and denied pensionary benefits for want of qualifying service.

¶ 3.1, 6.1–6.2

The petitioner sought, among other reliefs, fixed pay from 1 July 1985, regular pay scale from 1 July 1990, and retirement benefits calculated by counting her earlier service.

¶ 3, 3.1

02Issues

i.Whether reinstatement by the Labour Court, absent an express direction on continuity of service, required the State to treat the petitioner’s service as continuous for pay and retirement-benefit purposes.

¶ 4, 6.1–7

ii.Whether the petitioner was entitled to reconsideration of her fixed-pay and regular-pay-scale entitlement dates and to pensionary and other retirement benefits calculated on that basis.

¶ 8–9.1

03Law Applied

The Court applied Government Resolution dated 17 October 1988 and the State circular dated 30 May 1989 concerning the petitioner’s pay and service benefits.

¶ 4.1, 8

It accepted the principle that, upon reinstatement, continuity of service may be treated as granted even where the Labour Court’s award does not expressly say so.

¶ 7

The Court relied on Gurpreet Singh v. State of Punjab, (2002) 9 SCC 492; Nandkishore Shravan Ahirrao v. Kosan Industries (P) Ltd., AIR 2020 SC 1776; and District Panchayat v. Danabhai Kalabhai, LPA No. 485 of 2017 (20 July 2021), and SLP (C) No. 2116 of 2022.

¶ 4.2

The petition was brought under Article 226 of the Constitution.

¶ 2

04Reasoning

The Court held that the petitioner’s reinstatement entitled her to continuity of service notwithstanding the absence of an express direction in the Labour Court award; the State’s contrary position was also recorded as not disputing the cited principle.

¶ 6.1, 7

Because the State had placed her in the regular pay scale from 2006 rather than applying the 1988 Resolution and 1989 circular to her service, its decision required interference.

¶ 8

The Court consequently directed reconsideration of the dates for fixed pay and regular pay scale and required the period of service to be considered for retirement benefits.

¶ 9–9.1