Madhya Pradesh High Court strikes down 70%-80%-90% probationary pay scheme, orders full salaries for affected government employees

The petitioners were government employees appointed through direct recruitment under various Madhya Pradesh service and recruitment rules.

At the time of recruitment, the applicable conditions generally prescribed a two-year probationary period and payment of the minimum of the applicable pay scale.

Subsequently, pursuant to the Council of Ministers’ decision dated 25 November 2019, the State issued a GAD circular dated 12 December 2019 and amended various service rules, including Rule 13 of the Madhya Pradesh School Education Service Rules, 2018 and Fundamental Rule 22-C.

These amendments extended probation to three years and provided for payment of only 70%, 80% and 90% of the minimum pay scale during the first, second and third years, respectively, along with allowances.

The petitioners challenged the circulars, statutory amendments and consequential deductions or recoveries, contending that they performed the same duties as regular employees and were entitled to the full prescribed pay scale.

The Court also considered its earlier decisions in Wasim Akram v. State of M.P., State of Madhya Pradesh v. Dilliraj Bhilala, W.A. No. 1498 of 2024, decided on 28 April 2025, and Indore Municipal Corporation v. Vinita Tiwari, W.A. No. 2977 of 2025, decided on 31 October 2025.

Whether the State could validly prescribe payment of only 70%, 80% and 90% of the minimum pay scale during the first, second and third years of probation for directly recruited Class III and Class IV employees.

Whether the amendments to Fundamental Rule 22-C, Rule 8(1) of the Madhya Pradesh Civil Services (General Conditions of Services) Rules, 1961, and the corresponding departmental recruitment rules and circulars were arbitrary and violative of Articles 12 and 14 of the Constitution.

Whether employees appointed after the State’s decision dated 25 November 2019 were entitled to payment of the full prescribed salary for the period during which they worked on probation.

The Court applied Articles 12 and 14 of the Constitution, particularly the prohibition against arbitrary and discriminatory State action.

It applied the relevant service rules, including Rule 8(1) of the Madhya Pradesh Civil Services (General Conditions of Services) Rules, 1961, Rule 13 of the Madhya Pradesh School Education Service Rules, 2018, the Madhya Pradesh Fundamental Rules, particularly Fundamental Rule 22-C, and the corresponding departmental recruitment rules.

The governing principle was that a duly selected employee performing the duties attached to the post is entitled to the pay scale prescribed for that post; probation may validly be used to assess suitability, but it does not by itself justify payment below the prescribed pay scale.

The Court relied on State of Madhya Pradesh v. Dilliraj Bhilala and Indore Municipal Corporation v. Vinita Tiwari, which had rejected the reduced-pay arrangement and directed payment of full salary and refund of recoveries.

The Court held that the petitioners had been selected through the prescribed recruitment process and were performing the duties of the sanctioned posts alongside regular employees.

Although a probationary period of two or three years could be justified for evaluating an employee’s suitability for confirmation, the State had not shown a rational basis for paying only 70%, 80% and 90% of the minimum pay scale while taking the employee’s full services.

The Court further found the arrangement discriminatory because the reduced-pay condition was imposed principally on Class III and Class IV employees, whereas similarly situated Class I and Class II officers were not subjected to the same treatment.

It also observed that the withheld amounts were not subsequently restored after confirmation, and that reduction of pay below the prescribed scale could not be treated as a lawful service condition or imposed without valid justification.

Consequently, the Council of Ministers’ decision, the circulars and the rule amendments founded upon it were held arbitrary and violative of Articles 12 and 14.

It struck down all rules, amendments and circulars prescribing payment of 70%, 80% and 90% of the minimum pay scale during the first, second and third years of probation, respectively, including the challenged amendments to Fundamental Rule 22-C and the corresponding departmental rules.

The State was directed to pay full salary to government employees appointed after 25 November 2019 for the work performed during their probationary period.

The Court also directed that any amounts recovered or withheld pursuant to the impugned reduced-pay scheme be restored in accordance with the judgment.