BSNL VRS-2019 Retirees Can Be Considered For Engagement As Consultants In CPSEs Or Govt Depts, Won’t Amount To Re-Employment: Delhi High Court

The division bench of Justice V. Kameswar Rao and Justice Anoop Kumar Mendiratta was dealing with a writ petition filed by former employees of BSNL, who had taken VRS from the government telecom company in 2019. Their petition challenged the "clarification/directive" dated 25.06.2021, issued by the Department of Telecommunications (DoT), which interpreted the term “employment/re-employment” in the VRS Scheme to include engagement on contractual/consultancy basis.

The DoT had said that since the employees, who took VRS in 2019, did not retire in due course on attaining the age of superannuation, they could not be considered for engagement on contractual or consultancy basis. The petitioners argued that the BSNL VRS Scheme, 2019, did not contemplate to create a separate class between VRS retirees and the superannuated employees.

Observing that the BSNL VRS-2019 Scheme only barred re-employment of a VRS retiree in a CPSE, the division bench said that “engagement on contractual/consultancy basis” does not fall within that restriction.

“The expression “re-employed” normally has been assigned to mean, taken back into service or taken into service. It should not be equated with a “contract of service””, the court said, while holding that the purpose of BSNL VRS-2019 was not to debar the persons who had opted for the VRS Scheme, from being engaged as contractual consultants.

The court held that the engagement of BSNL VRS-2019 retirees in any CPSE or government department on contractual or consultancy basis is not in violation of Clause 8 (iii) of BSNL VRS-2019.

“It is accordingly held that clarification/directive dated 25.06.2021 interpreting the definition of employment/re-employment to include engagement on contractual/consultant basis is contrary to the terms and conditions of BSNL VRS-2019. The applicants as such are eligible to be considered for appointment on consultancy/contractual basis," the bench ruled.

The Court observed that engagement on contractual or consultancy basis is not a regular employment and it is generally notified to meet out the exigencies till the regular recruitment is made.

Some of petitioners were engaged as Consultants at the Licensed Service Area (LSA), Haryana, however, their contract was subsequently terminated, citing the Office Memorandum dated 25.06.2021 issued by DoT.

The DoT in the OM held that engagement in a CPSE on contractual/consultancy basis would also qualify as “re-employment or employment” under the DPE guidelines dated 20.07.2018, which prohibits the VRS optees of a CPSE from taking up employment in another CPSE. The DoT also said there is no distinction between “employment” and “re-employment” in the DPE Guidelines. 

The petitioners challenged the clarification issued by the DoT before the Central Administrative Tribunal (CAT) in 2021. They also challenged the notification, issued by the DoT seeking engagement of Consultants on short term basis, which expressly barred the BSNL VRS retirees from being considered for the same. The CAT dismissed their plea in December 2021.

The DoT argued that there is no distinction between 'employment' and 're-employment' in DPE Guidelines dated 20.07.2018 and engagement in a CPSE/government on contractual/consultancy basis would also qualify as reemployment/employment under the DPE guidelines. 

"The DPE guidelines prohibit VRS retirees from employment in another CPSE including consultancy/contractual engagement. The petitioners were already paid upto 125% of the last drawn salary in terms of the VRS Scheme. Further, even in case of engagement on contractual/consultancy basis in a CPSE or government, the employee gets salary from the CPSE/government and hence, the engagement attracts the bar under VRS BSNL-2019 scheme as well as DPE guidelines," it said.

The petitioners argued that the decision violats their fundamental rights under Article 14 and 16 of the Constitution of India. They averred that deeming engagement as “Consultants on short term contract basis” as “re-employment”, is detrimental to the public interest and is a deviation from the government policy.

The division bench said a bare perusal of Clause 8 (iii) of BSNL VRS-2019 reflects that the only restraint which is envisaged under the Voluntary Retirement Scheme-2019 is that the employees retired under this Scheme, would not be eligible for re-employment in any other CPSE. In the eventuality, the employee still desires to take up re-employment in any CPSE, such employee was required to refund the entire amount of exgratia received under the Scheme to BSNL, the court noted

“It is pertinent to notice that there is no specific clause restraining the engagement as Retainer, Consultants etc. on temporary basis to which the superannuated employees of BSNL in normal course are eligible and the clause is now sought to be interpreted as placing bar for engagement even on consultancy/contractual basis," said the court.

The court further said the petitioners by accepting the BSNL VRS-2019 cannot be deemed to have waived or surrendered or abrogated their rights as available to any other BSNL employee on normal superannuation except to the extent specified in Voluntary Retirement Scheme.

"It may further be noticed that there appears to be a clear clarification/understanding issued vide letter dated 23.11.2019 by the Director, BSNL Board that BSNL employees retiring on VRS (VRS-2019) is neither distinct nor a separate group but will be at par with retirement on superannuation," it added.

Observing that the theory of legitimate expectation can be invoked in terms of letter dated 23.11.2019 issued by the Director, BSNL Board, the Court added: “The expectation of employment on contractual/consultancy basis by the VRS optees and for being treated at par with the employees who superannuate on reaching the age of retirement, appears to be a legitimate expectation. A distinction appears to have been incorrectly carved out by the respondent by debarring such VRS retirees from being engaged on contractual/consultancy basis vis-a-vis employees superannuating in routine course from BSNL/DOT in violation of Articles 14 and 16 of the Constitution of India.”

The DoT is estopped from unilaterally changing the terms of the VRS, against the express assurances given by the BSNL to its employees at the time of introducing the VRS, said the court

“We are of the considered view that any guidelines/notification issued by the Competent Authority after the VRS Scheme-2019 was finalized and accepted, could not have restricted the rights of the employees opting for BSNL VRS-2019 beyond Clause 8 (iii) of the VRS Scheme which only provided the restriction regarding “re-employment” in any other CPSE”," said the court. 

The Court also said that an effort to further classify the optees of BSNL VRS-2019 as distinct from those superannuating in normal course, would be a clear violation of Articles 14 and 16 of the Constitution of India.

"The clarification dated 23.11.2019 [issued by Director, BSNL Board] did not reflect, if any embargo or restriction was contemplated to be imposed in respect of the retirees under BSNL VRS-2019 pertaining to engagement on short term contractual basis. There appears to be clear distinction between "re-employment" and "contractual employment" and no unilateral change could be imposed on the retirees under BSNL VRS-2019," said the court.

Case Title: Ashwani Kumar Sharma & Ors. versus Union of India

Citation: 2023 LiveLaw (Del) 54

Counsel for the Petitioner: Mr. Atul Chaubey, Adv

Counsel for the Respondent: Mr. Jivesh Kumar Tiwari, Sr. Panel Counsel with Mr. Mimansak Bhardwaj and Mr. Sunny, Advs.