1. Rationalization of industrial pay scales from 19 to 5 based on job-evaluation and point-rating method resulting in the merger and bracketing of employee categories. (Para 1 )
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1993 Supreme(SC) 554
SUPREME COURT OF INDIA
S. THIRUVALLUVAN
versus
Union of India
Decide on July 13, 1993
Important Points
The Court held that rationalizing pay scales based on scientific job-evaluation (point rating method) is not arbitrary, even if it results in bracketing different employee categories into a single scale. Such a process does not violate the principle of equal pay for equal work.
Subject
Employment Law - Wage and Hour Disputes
Act Referred
Headnote
Expert Classification Committee – Third central Pay Commission after examining the scales of various categories of workers in Ordnance Factory reduced scales for industrial staff in various defence establishments to 5 scales varying from unskilled to highly skilled Grade I categories same time Commission also recommended setting up of an Expert Classification Committee to carry out a proper classification on scientific job-evaluation basis and it submitted its report recommending 9 pay scales government examined report of ECC and while agreeing with job-evaluation done on point rating method it disagreed with recommendation that total number of pay scales should government took a decision that there should be for industrial workers was also demand of two federations of employees – Held, Various jobs into those pay scales on basis of points assigned for each stated earlier because of merger of scales those who were in the lower scale entered the higher scale while those already in higher bracket who had not scored number of points required to move to next higher scale remained in the same scale and got bracketed in that scale not see how one can say that rationalisation of pay scales done on basis of job-evaluation is arbitrary merely because it results in bracketing of certain categories of employees who were earlier in different scales into a single scale those employees who were earlier in higher scale be heard to say that principle of equal pay for equal work was violated merely because some other category which was earlier in the same pay scale with them had moved up to a higher scale while they were bracketed with those who were earlier in lower scales and remained at same level job-evaluation it is found that job rating for a given category is higher but they were in the lower scale for want of job- evaluation they would have to be pushed up to higher scale – Appeal dismissed.
Legal Category Hierarchy
Table of Contents
2. Whether the rationalization and bracketing of employees into a single pay scale based on job-evaluation is arbitrary or violates the principle of equal pay for equal work. (Para 1 )
3. Rationalization via job-evaluation is not arbitrary; bracketing is inevitable when reducing scales, and employees with higher job ratings must be moved to higher scales. (Para 1 )
4. Pay scale rationalization based on scientific job-evaluation and point-rating methods is not arbitrary, even if it results in the bracketing of different employee categories. (Para 1 )
5. Appeals dismissed; the tribunal's order upholding the non-arbitrary nature of the pay scale allotment is affirmed. (Para 1 )
6. Is the rationalization of pay scales through job-evaluation and bracketing of employees considered arbitrary?
No. Rationalization based on job-evaluation is not arbitrary simply because it results in bracketing different categories of employees into a single scale, as this is an inevitable effect of reducing the total number of pay scales. (Para 1 )
7. Does the bracketing of employees into a single pay scale violate the principle of equal pay for equal work?
No. The principle is not violated when employees previously in higher scales are bracketed with those from lower scales, provided the allotment is based on a scientific job-evaluation. (Para 1 )
8. What is the required action if a job-evaluation reveals a higher rating for a category previously placed in a lower pay scale?
If job-evaluation finds that the job rating for a given category is higher, but they were in a lower scale due to a lack of prior evaluation, they must be moved to the higher scale. (Para 1 )
( 1 ) THE Third central Pay Commission after examining the scales of various categories of workers in the Ordnance Factory reduced the existing 19 scales for the industrial staff in various defence establishments to 5 scales varying from unskilled to highly skilled Grade I categories. At the same time, the Commission also recommended the setting up of an Expert Classification Committee (ECC) to carry out a proper classification on scientific job-evaluation basis. The ECC was set up in October 1974 and it submitted its report in 1979 recommending 9 pay scales. The government examined the report of the ECC and while agreeing with the job-evaluation done on point rating method, it disagreed with the recommendation that the total number of pay scales should be 9 instead of 5. The government took a decision in October 1981 that there should be only 5 scales for industrial workers. That was also the demand of the two federations of employees. The compression of 9 pay scales into 5 pay scales had to be done on the basis of mid-point rating of the points allotted by the ECC for each category on the result of job-evaluation. At the floor level up to point 205 the wage scale fixed was Rs. 196-232, between 206 and 250 points the wage fixed was Rs. 210-290, for the points scored between 251-328 the wage fixed was rs 260-400, for the points scored between 329-388 the wage fixed was Rs. 330- 480 and for those above 389 the scale was Rs. 380-560. This is also clear from para 3 ( (f) of the counter-affidavit filed on behalf of the Management. On the basis of points assigned on job-evaluation, employees belonging to different categories were fitted into 5 scales as stated above. When the total number of pay scales get reduced it is inevitable that certain employees who earlier belonged to different pay scales get merged into a single revised pay scale. That is the effect of rationalisation without which reduction in total number of pay scales would not be possible. In the instant case the Third Pay Commission reduced the pay scales from 19 to 5. The ECC after undertaking an exercise at job-evaluation recommended 9 scales on the basis of the points allocated for each job. The government was, however, of the opinion that the total number of pay scales should be restricted to 5 only, presumably to maintain parity with other sectors. It had, therefore, to fit the various jobs into those pay scales on the basis of points assigned for each job. In doing so, as stated earlier because of the merger of scales those who were in the lower scale entered the higher scale while those already in the higher bracket who had not scored the number of points required to move to the next higher scale remained in the same scale and got bracketed in that scale. We do not see how one can say that the rationalisation of pay scales done on the basis of job-evaluation is arbitrary merely because it results in bracketing of certain categories of employees who were earlier in different scales into a single scale. How can those employees who were earlier in the higher scale be heard to say that the principle of equal pay for equal work was violated merely because some other category which was earlier in the same pay scale with them had moved up to a higher scale while they were bracketed with those who were earlier in the lower scales and remained at the same level. If on job-evaluation it is found that the job rating for a given category is higher but they were in the lower scale for want of job- evaluation, they would have to be pushed up to the higher scale. That is what justice demands. The tribunal has, therefore, rightly come to the conclusion thatthe pay scale allotted to each category of employees on the basis of points given by the ECC as a result of job evaluation cannot be termed as arbitrary. We, therefore, do not see any infirmity in the impugned order of the tribunal. We agree with the reasons which weighed with the tribunal for the conclusion it reached.-We
