Very Important Point
The employees who were intially engaged as project casual labour by the Railway Administration and were subsequently absorbed on a regular temporary/permanent post are not entitled to have the services rendered as project casual labour prior to 1.1.1981 counted as part of qualifying service for the purpose of pension and other retiral benefits.

Headnote:Service Jurisprudence -Qualifying service for the purpose of pension and other retiral benefits in Railway Administration-Employees initially engaged as Project Casual Labour by Railway Administration - Subsequently absorbed on a regular temporary/ permanent post-Tribunal holding that service rendered as project casual labour should be counted for the purpose of retiral benefits-Whether correct? (No) - Appeal allowed (Railway Establishment Manual-Paras 2501(a) and (b), 2511 - Right and Privilege of Casual Labour).
       Held : In its judgment dated February 8, 1991 the Tribunal has held that exclusion of period of service rendered as Project Casual Labour before they were regularly absorbed prior to 1.1.1981 results in such employees being discriminated as compared to Project Casual Labour who were employed subsequently and whose service as Project Labour prior to absorption is counted for the purpose of qualifying service. The said finding of the Tribunal is based on the decision of this Court in D.S. Nakara. In this regard, it may be stated that the Tribunal was in error in invoking the principle laid down in D.S. Nakara in the present case. The decision in D.S. Nakara has been considered by this Court in subsequent decisions and it has been laid down that the principle laid down in D.S. Nakara can have application only in those cases where there is discrimination in the matter of existing benefit between similar set of employees and the said principle has no application where a new benefit is being conferred with effect from a particular date. In such a case the conferment of the benefit with effect from a particular date cannot be held to be violative of Article 14 of the Constitution on the basis that such a benefit has been conferred on certain categories of employees on the basis of a particular date. (See : Krishena Kumar v. Union of India & Ors., 1990(4) SCC 207; State of West Bengal v. Ratan Behari Dev, 1993(4) SCC 62, and State of Rajasthan v. Sevanivatra Karamchari Hitkari Samiti, 1995(2) SCC 117). In the present case, the benefit of counting of service prior to regular employment as qualifying service was not available to casual labour. The said benefit was granted to Open Line Casual Labour for the first time under order dated October 14, 1980 since Open Line Casual Labour could be treated as temporary on completion of six months period of continuous service which period was subsequently reduced to 120 days under Para 2501(b)(i) of the Manual. As regards Project Casual Labour this benefit of being treated as temporary became available only with effect from 1.1.1981 under the scheme which was accepted by this court in Inder Pal Yadav. Before the acceptance of that scheme the benefit of temporary status was not available to Project Casual Labour. It was thus a new benefit which was conferred on Project Casual Labour under the scheme as approved by this Court in Inder Pal Yadav and on the basis of this new benefit Project Casual Labour became entitled to count half of the service rendered as Project Casual Labour on the basis of the order dated October 14, 1980 after being treated as temporary on the basis of the scheme as accepted in Inder Pal Yadav. We are, therefore, unable to uphold the judgment of the Tribunal dated February 8, 1991 when it holds that service rendered as Project Casual Labour by employees who were absorbed on regular permanent/temporary posts prior to 1.1.1981 should be counted for the purpose of retiral benefits and the said judgment as well as the judgment in which the said judgment has been followed have to be set aside. The judgments in which the Tribunal has taken a contrary view have to be affirmed. (Para 12)
       Held finally : In the result, the appeals filed by the Railway Administration are allowed and the judgments of the Tribunal impugned in these appeals are set aside. The Appeals arising out of Special Leave Petitions (c) Nos. 26790 of 1995 and 3423 of 1997 filed by the employees are dismissed. No order as to costs. (Para 13)

Judgment

S.C. Agrawal, J.-Special leave granted in the Special Leave Petitions.

2. These appeals raise the question whether employees who were initially engaged as Project Casual Labour by the Railway Administration and were subsequently absorbed on a regular temporary/permanent post are entitled to have the services rendered as Project Casual Labour prior to 1.1.1981 counted as part of qualifying service for the purpose of pension and other retiral benefits.

3. In sub-para (a) of Para 2501 of the Indian Railway Establishment Manual (hereinafter referred to as ‘the Manual’), as it stood at the relevant time, the expression ‘Casual Labour’ was defined in these terms :-

“Casual labour refers to labour whose employment is seasonal, intermittent, sporadic or extends over short periods. Labour of this kind is normally recruited from the nearest available source. It is not liable to transfer, and the conditions applicable to permanent and temporary staff do not apply to such labour.”

4. In sub-para (b) of Para 2501 of the Manual casual labour was divided into three categories, namely, (i) staff paid from contingencies except those retained for more than six months continuously, known as Open Casual Labour; (ii) labour on projects, irrespective of duration, known as Project Casual Labour; and (iii) seasonal labour who are sanctioned for specific works of less than six months duration. Persons falling in category (i) who continued to do the same work or other work of the same type for more than six months without a break were to be treated as temporary after the expiry of the period of six months of continuous employment. The said period of six months was subsequently reduced to 120 days. Since the period of service of such casual labour, after their attaining temporary status on completion of 120 days of continuous service, was not counted as qualifying service for pensionary benefits and there was a demand for counting of that period of service for that purpose, the Railway Board, by order dated October 14, 1980, took the following decision :-

“As a result of representations from the recognised labour unions and certain other quarters, the Ministry of Railways had been considering the demand that the period of service in the case of casual labour (i.e. other than casual labour employed on Projects) after their attainment of temporary status on completion of 120 days continuous service, should be counted as qualifying service for pensionary benefits if the same is followed by their absorption in service as regular railway employees. The matter has been considered in detail in consultation with the Ministry of Home Affairs (Deptt. of Personnel and Administrative Reforms) and the Ministry of Finance. Keeping in view the fact that the aforesaid category of employees on their attainment of temporary status in practice enjoy more privileges as admissible to temporary employees such as they are paid in regular scales of pay and also earn increments, contribute to P.F. etc. the Ministry of Railway have decided, with the approval of the President, that the benefit of such service rendered by them as temporary employees before they are regularly appointed should be conceded to them as provided in the Ministry of Finance O.M. No. F.12(1)-EV/768 dated 14th May, 1968. (copy enclosed for ready reference)

The concession of counting half of the above service as qualifying for pensionary benefits, as per the O.M. of 14th May, 1968 would be made applicable to casual labour on the railways who have attained temporary status. The weightage for the past service would be limited from 1.1.1961 in terms of conditions of the O.M. ibid. Past cases of retirements before the date of this letter will not be re-opened.

2. Daily rated casual labour or labour employed on projects will not however, be brought under the purview of the aforesaid orders.”

5. Project Casual Labour were left out from the ambit of this order because there was no provision for

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1998 Supreme(SC) 540

Cases Referred (6)