In a landmark decision, the Supreme Court ruled that government workers cannot be refused the annual raise just because they will be retiring the day after receiving it.
In an appeal brought by the Karnataka Power Transmission Corporation Ltd., a bench made up of Justices MR Shah and CT Ravikumar was deliberating on the question of “whether an employee who has earned the annual increment is entitled to the same despite the fact that he has retired on the very next day of earning the increment?”
In one instance, the KPTCL refused annual raises to workers on the grounds that they had retired the day before. The appellant argued that the employees were not in service on the day the increment actually accrued to them, citing Regulation 40(1) of the Karnataka Electricity Board Employees Service Regulations, 1997, which states that an increment accrues from the day after it is earned. KPTCL turned to the Supreme Court after the High Court rejected this argument.
For the appellant, Senior Advocate Huzefa Ahmadi contended that the increment serves as a “incentive” to motivate the employee to do well the next year and that it serves no purpose if the employee is no longer employed. The Court rejected this argument by ruling that an increment is a benefit that employees earn based on their prior year of service and that it can only be withheld as a punishment following a properly conducted disciplinary investigation.
The bench clearly rejected the appellant’s claim that an increment is a type of “incentive” and demanded that, if the appellant’s claim were to be adopted, an employee who gets an increment three days before the scheduled retirement date should likewise not be receiving it.
various perspectives on high courts
The bench took note of the several High Courts’ differing opinions on the matter. While the High Courts of Kerala, Andhra Pradesh, and Himachal Pradesh have reached different conclusions, the High Courts of Gujarat, Delhi, Allahabad, Madhya Pradesh, and Orissa have ruled in favour of the employees.
Written by: Hardik Sharma, B.COM LL.B, an intern under Legal Vidhiya
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