Employee's Benefit Earned During Service Can't Be Taken Away By Making Termination Effective Before It Actually Happened: Punjab & Haryana HC

The Punjab & Haryana High Court has made it clear that an employee cannot be deprived from his service benefits by backdating the termination of his employment.

Justice Namit Kumar said,

"when an employer-employee relationship ends, the termination can take effect from the date of order of termination with immediate effect or a future date specified in the order (later effect). However, the termination cannot be applied retroactively to an earlier date (backdated) which means that the employee's benefits earned during their service cannot be taken away by making the termination effective before it actually happened."

In essence, the employees rights and benefits accrued during their service are to be protected and the employer cannot retroactively deprive them of those benefits by backdating the termination.

These observations were made while hearing a writ petition under, challenging the order of the Managing Director, PRTC (PEPSU Road Transport Corporation), whereby a Bus driver was retired from service w.e.f. 31.12.1994 retrospectively in 1995.

According to the department, the driver joined the service in 1970, and date of birth was recorded in his service book as 20.07.1938 and he was to be superannuated on 31.07.1996 on attaining the age of 58 years but he was retired vide impugned order dated 08.06.1995 w.e.f. 31.12.1994 retrospectively on the assumption that his date of birth should have been December, 1936 because the Driving License for heavy vehicles cannot be issued before the age of 20 years.

Counsel appearing for the petitioner Vikas Chatrath argued that, the petitioner cannot be retired from service of the Corporation with retrospective effect i.e. w.e.f. 31.12.1994 and pensionary benefits cannot be denied to him .

Reliance was placed on Rajinder Singh vs Board of School Education Haryana and another (1996) wherein while setting-aside the order of dismissal from service, it was held that the order of punishment cannot be passed retrospectively.

After hearing the submissions, the Court noted that "The matter pertains to year 1999 and was admitted on 08.10.2001."

"In context of limited prayer made before this Court which in my consideration, in terms of settled principles of law in service jurisprudence, when an employer-employee relationship ends, the termination can take effect from the date of order of termination with immediate effect or a future date specified in the order (later effect)," said the bench.

The Court highlighted that the termination cannot be applied retroactively to an earlier date.

In the light of the above, the set-aside the order directing retirement of the driver passed in 1995, "to the scale that the same has been passed retrospectively."

"The date of retirement of the petitioner shall be treated as 08.06.1995 i.e. the date of passing of impugned order and he shall be granted all the consequential benefits from 01.01.1995 till 08.06.1995 within a period of 03 months from the date of receipt of certified copy of this order," the Court added.

Mr. Vikas Chatrath, Advocate with Ms. Priya Kaushik, Advocate for the petitioner.

Mr. Manu Loona, Advocate for Mr. Karan Singla, Advocate for the respondents.

Title: Bahadur Singh v. P.R.T.C. and others

Citation: 2024 LiveLaw (PH) 214

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