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Report by Sneha Sakshi

In the case of MAHARASHTRA STATE FINANCIAL CORPORATION EX-EMPLOYEES ASSOCIATION & ORS.
VERSUS STATE OF MAHARASHTRA & ORS.
, the appellants had brought a discrimination claim against the Maharashtra government’s Industry, Energy and Labour Department’s decision dated 29.03.2010 in that procedure.

FACTS:


The workers of the Maharashtra State Financial Corporation who retired or passed away between January 1, 2006, and March 29, 2010, were not granted the benefit of the pay scale change that the Fifth Pay Commission had recommended. The modification, however, became effective on January 1, 2006.


The determination of the implementation date for the Fifth Pay Commission’s recommendations as they relate to the respondent corporation is at issue in this case. That formulating a policy on fixation of pay for the wages of its employees, the scope of its revision, as well as the date of its execution, are undeniably matters of exclusive executive decision-making power. Special leave to appeal granted.

The appeal was finally heard with the parties’ knowledgeable counsel’s permission. A ruling by the Bombay High Court is being contested by the appellant organisation.


CONTENTIONS OF APPELLANT:


➢ The expert counsel for the appellants, Mr Jay Salva, asserted that, notwithstanding the fact that the most recent pay modification had been in effect for its employees from 1986 to 1989, MSFC believed it had gone into effect on January 1, 1999. While the previous version was being authorised, five more revisions were due.
➢ The board of directors decided to follow the pay commission’s recommendations starting in January 1996 without giving those modifications any thought.
➢ Only the 115 current employees who were working at the time that the benefits were passed on were subject to the enhanced salary, depriving the 900 previous employees of comparative advantages.
➢ All people who were employed received temporary reliefs beginning in September 1993, including those who ultimately lost out on the pay revision owing to retirement.
➢ Mr Salva contended that the MSFC owed no more than 32 crores to all former workers, including those who had retired, asked for VRS, or had passed away. He said the GR failed to recover the money paid for interim relief and ad hoc amounts paid to current employees between September 1993 and July 2001.


CONTENTIONS OF RESPONDENT:


➢ The employee in question was not subject to any scheme and chose to leave the company of his or her own volition. However, the Corporation had less obligation to pay salary dues.
➢ The defence attorney for MSFC contended that the state government shouldn’t intervene because of the contested judgement.
➢ It was contended that MSFC is an independent company and is exempt from Maharashtra Government regulations.
➢ Expert counsel emphasised that by paying the benefits on the terms proposed by the appellants, the Corporation was suffering losses.
➢ These characteristics made these workers eligible for benefits above and beyond what they would have gotten if they had remained in their jobs.
➢ Before issuing such a ruling, the Court, according to Mr Patil, must consider the financial impact on the employer.


JUDGMENT:


On January 1, 1996, the State Government adopted and put into practice the Fifth Pay Commission’s recommendations. Without choosing whether to impose those scales for its employees, the MSFC forwarded the idea to the State Government (as required by S. 39 of the State Financial Corporations Act). During this period, all present employees received a little reprieve in the form of wage revision.


The Fifth Pay Commission’s recommendations for pay modification were put into action by MSFC on March 29, 2010. The State of Maharashtra letter dated 29.03.2010 served as the basis for the decision to apply the wage revision to the workers who were already working there and to minimise the arrears that would be due as of the first of January 2006 in the future.


By Office Order dated 09.04.2010, the MSFC decided to implement the decision of the Government of Maharashtra and grant the benefits of the Fifth Pay Commission to employees of the Corporation who were on its rolls on that date.


The highest court in India has ruled that voluntarily leaving one’s job before finishing it is still eligible for rewards. The employer cannot discriminate against or split a homogeneous class of workers using a fake cut-off date, the court said.


It was held that VRS employees cannot claim parity with others who retired upon achieving the age of superannuation. Those who died during that period shall be entitled to arrears based on pay revision, accepted by the Corporation. The Corporation was directed to pay interest @ 8% p.a. on these arrears from 01.04.2010 till the end of this judgment.

LINK TO FULL JUDGEMENT: https://bit.ly/3Rw1Qbk

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