Employee Who Is Compulsorily Retired From Service As A Punishment Loses Vested Right To Claim Entire Pension Or Gratuity: Kerala HC
Contents News/Article Date: 8th October 2022
Relating to which Act: Industrial Disputes Act, 1947 – The Industrial Employment (Standing Orders) Act, 1946
Type: Kerala High Court – The Bench of Justices AK Jayasankaran Nambiar and Mohammed Nias CP
Pertains to General Manager South Railway versus R Haridrakumar – Case No.: OP CAT 14/2022
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The Industrial Disputes Act, of 1947 is the primary legislation governing dispute resolution in India. It was enacted to provide for the investigation and settlement of industrial disputes, to prevent illegal strikes and lockouts, and to provide relief to workmen during lay-off or after retrenchment or wrongful dismissal.
Therefore, to attract the application of the Act, a dispute would have to occur in an establishment falling under the definition of industry and would have to involve one or more of the stakeholders mentioned in the definition of industrial disputes. In other cases, there is no scope for governmental interference and thus the only recourse is to approach courts or engage in alternate dispute resolution mechanisms.
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Subject: COURT UPDATES – Employee Who Is Compulsorily Retired From Service As A Punishment Loses Vested Right To Claim Entire Pension Or Gratuity: Kerala HC
For greater details, appended below is the complete news item
Employee Who Is Compulsorily Retired From Service As A Punishment Loses Vested Right To Claim Entire Pension Or Gratuity: Kerala HC
The Kerala High Court recently observed that according to provisions of the Railway Services Pension Rules of 1993 a railway servant compulsorily retired from service as punishment does not have a vested right to claim their entire pension or gratuity because the amount of gratuity or pension that has to be granted is at employer’s discretion.
As the Bench of Justices AK Jayasankaran Nambiar and Mohammed Nias CP also observed that past service could be forfeited or the pension could be withheld to extent that the Regulation permit and such a discretion can’t be termed secondary punishment.
The instant petition was filed by the General Manager of Southern Railway and other employees against the challenging the setting aside of order sanctioning two-third pension and two-third gratuity directing Southern Railway seeking direction to pay the petitioners’ full pension.
The respondent, in this case, was working as a Senior Clerk and was given a penalty of compulsory retirement effective from October 2004 and it was alleged that he had fraudulently secured employment in railways under sports quota.
In appeal, the court observed that as per Railway Service Pension Rules a railway servant compulsorily retired from service as a penalty might be granted pension or gratuity at a rate not less than 2/3rd and not more than the full amount and this shows that the employer has absolute discretion and the employee does not have any vested claim in the entire pension or gratuity.
In this context, the court observed that past service can be forfeited and the pension withheld and this cannot be termed a secondary punishment. The court also ruled that imposing of punishment and exercise of discretion determining the quantum payable as pension or as gratuity need not be simultaneous.
Accordingly, the court allowed the plea and set aside the impugned order passed by the Tribunal.
Title: General Manager South Railway versus R Haridrakumar
Case No.: OP CAT 14/2022