No-work-no-wages treatment does not interrupt continuity of service for retirement-benefit calculations.

The employee, a Commercial Clerk appointed in 1984, was removed from service on 11 December 2008 following disciplinary proceedings concerning alleged misappropriation.

The appellate authority modified the penalty to compulsory retirement with 80% pensionary benefits.

The Central Administrative Tribunal set aside the employer’s orders; the High Court dismissed the Railways’ challenge, and the employee was reinstated on 4 July 2013, with his intervening absence initially treated as “no work-no wages”.

The Tribunal later allowed the employee’s application concerning treatment of the absence period and benefits under paragraph 1343 (FR 54) of the Indian Railway Establishment Code. The Railways challenged that order.

At the hearing, the employee agreed that accumulated leave could be adjusted against the absence period, with the remainder treated as “no work-no wages,” provided continuity of service was maintained.

1. Whether the employee’s accumulated leave could be adjusted against his period of unemployment, with any balance treated as “no work-no wages,” while preserving continuity of service.

2. Whether the employee’s retirement benefits and any disputed payment or recovery of ₹6,48,867 required consequential recalculation or adjustment.

The Court referred to paragraph 1343 (FR 54) of the Indian Railway Establishment Code, which the Tribunal had invoked in directing consequential benefits for the period in question.

The Court applied the “no work-no wages” principle to the portion of the absence period not covered by adjustment of accumulated leave, while directing that the period be treated as duty to the extent of that adjustment.

It also directed calculation of retirement benefits on the basis of continuous service from appointment to superannuation and ordered payment of statutory interest on delayed gratuity at 10% per annum.

No precedent or further statutory provision is identified in the judgment.

The Court recorded the parties’ agreement that the employee’s accumulated leave would be set off against the absence period and that the remaining period would attract no wages. It accepted that arrangement, while preserving continuity of service for retirement-benefit calculations.

As to the disputed ₹6,48,867, the employee denied receiving it and the Railways’ representative could not confirm payment. The Court therefore directed that any amount actually paid could be adjusted against retirement benefits; if none had been paid, the recovery notice would cease to have effect, and any amount already deducted from retirement benefits had to be restored in the calculations.

The Railways were directed to calculate retirement benefits on continuous service from 16 January 1984 to superannuation on 31 July 2016, address the disputed ₹6,48,867 as specified, and pay any outstanding gratuity and pensionary benefits within 60 days. Delayed gratuity was to carry interest at 10% per annum from 1 September 2016 until payment.