IMPORTANT POINTS
Employees retiring under VRS constitute a class in themselves separate and distinct from serving employees.
Employees retiring under VRS are not entitled to benefits of pay revision made for serving employees even though with retrospective effect but notified after retirement of VRS employees more than what is admissible to them under the scheme.
Principle of equal pay for equal work is not attracted in the case of employees retiring under VRS vis-à-vis serving employees.

Headnote:(a) Service law – Voluntary Retirement Scheme – Scheme floated to reduce cost on account of staff salary etc. – Employees opting receiving ex gratia payment of salary – Also receiving additional pension, which they would not have received otherwise – Receiving benefit of additional five years of service while calculating the pension – Such employees constituting a class in themselves quite separate from other serving employees. (Para 34)
       (b) Service law – Pay revision with retrospective effect – Effect on employees opting for Voluntary Retirement Scheme – Pay scale revised after completion of VRS, with retrospective effect – Employees opting for VRS excluded from benefits of pay revision – VRS, clause 5(2), itself making such employees entitled only to revision of ex gratia amount upon retrospective increase in the salary – Such employees forming a class in themselves distinct and separate from other serving employees to whom benefits of pay revision extended – Not extending benefits of pay revision to employees opting for VRS not discriminatory – Not violation of Article 14 of the Constitution. (Para 36, 38)
       2014 (1) SCALE 320 – Referred
       (c) Service law – Equal pay for equal work – Employees opting for VRS not given benefit of retrospective pay revision notified after their retirement – Claiming parity with serving employees – Principle of ‘equal pay for equal work’ not attracted. (Para 39)
       Facts of the case:
       The issue involved in all these cases is with regard to retiral benefits to be given to a special class of retired employees of five nationalized general insurance companies.
       The insurance companies, “the Employers”, were in financial difficulties and so they framed a scheme named “General Insurance Employees Special Voluntary Retirement Scheme, 2004”, so as to enable its employees to retire prematurely on certain conditions with some special benefits.
       the employees opting for voluntary retirement under the Scheme were to get benefit of ex gratia amount as well as benefit of additional pension which would result from the addition of the notional five years’ service.
       Several employees took benefit under the Scheme and retired in pursuance of the aforestated Scheme in 2004.
       After retirement of the aforestated employees, the Employers revised pay scales of their employees under Notification dated 21st December, 2005 giving benefit of revision of pay retrospectively with effect from 1st August, 2002, provided the employees were in service on or after 1st August, 2002.
       The issue involved in all these cases is whether after acceptance of voluntary retirement under the Scheme, such retired employees would be entitled to get benefit of the revision of pay, which was retrospectively given from 1st August, 2002.
       Finding of the Court:
       The employees who had opted for retirement under the Scheme would not be entitled to additional pension upon revision of pay effected under the Notification dated 21st December, 2005.
       Result: All transferred cases disposed of.

JUDGMENT

ANIL R. DAVE, J.

1. A common legal issue was involved in several writ petitions and appeals pending before different High Courts and therefore, transfer petitions had been filed in this Court so that all pending cases can be transferred to and decided by this Court.

2. Upon hearing the learned counsel and upon perusal of the facts of the cases, this Court found that substantial questions of general importance were involved in the said cases and therefore, it would be in the interest of justice if all the cases are heard and decided together and therefore, all these cases have been transferred to this Court.

3. The issue involved in all these cases is with regard to retiral benefits to be given to a special class of retired employees of five nationalized general insurance companies. The undisputed facts and legal issues involved in all these cases are as under:

The insurance companies, who have been described hereinafter as “the Employers” were in financial difficulties and so as to cut their expenditure, the Employers framed a scheme named “General Insurance Employees Special Voluntary Retirement Scheme, 2004” (hereinafter referred to as “the Scheme”), so as to enable its employees to retire prematurely on certain conditions with some special benefits.

4. Normally a person gets pension when he retires from service after putting in the period of pensionable service as per his service conditions. All the employees, in the instant case, would be eligible to get pension if they retire from service after putting in 20 years of service.

5. As stated hereinabove, so as to curtail the expenditure, it was decided to reduce the number of employees and in pursuance of the Scheme, offers were invited from the employees who wanted to opt for voluntary retirement even before completion of the period of normal pensionable service.

6. As per the provisions of the Scheme, it was open to the employees to opt for retirement even on completion of 10 years of qualifying service, provided they had attained the age of 40 years. The Scheme had a limited duration of 60 days, during which the employees had to decide whether they wanted to opt for the Scheme. The employees opting for retirement under the Scheme were also to be given some additional benefits, namely, payment of 60 days’ salary for each completed year of their service or salary for the number of months of their remaining service, whichever was less. So far as determination of the amount of pension is concerned, as per the Scheme, five years’ service was to be notionally added to the service of the retiring employees and on that basis pension was to be paid to them.

7. In addition to the aforestated benefits, the retiring employees were also to get usual benefits under the provisions of the Payment of Gratuity Act, 1972 and the amount of Provident Fund, which they were otherwise entitled to.

8. Thus, the employees opting for voluntary retirement under the Scheme were to get benefit of ex gratia amount as well as benefit of additional pension which would result from the addition of the notional five years’ service.

9. Several employees took benefit under the Scheme and retired in pursuance of the aforestated Scheme in 2004.

10. After retirement of the aforestated employees, the Employers revised pay scales of their employees under Notification dated 21st December, 2005 giving benefit of revision of pay retrospectively with effect from 1st August, 2002, provided the employees were in service on or after 1st August, 2002.

11. The issue involved in all these cases is whether after acceptance of voluntary retirement under the Scheme, such retired employees would be entitled to get benefit of the revision of pay, which was retrospectively given from 1st August, 2002 under the Notification dated 21st December, 2005, which was called the “General Insurance (Rationalisation of Pay Scales and Other Conditions of Officers) Second Amendment, 2005 and hereinafter referred to as “the Notification”.

12. The

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2015 Supreme(SC) 13

Cases Referred (1)