Service Rendered In 'Work Charged' Establishment Should Be Treated As Qualifying Service For Pension : SC [Read Judgment]

The Supreme Court has held that services rendered in the work-charged establishment should be treated as qualifying service for grant of pension. 

The bench consisting of Justices Arun Mishra, Abdul Nazeer and M R Shah delivered the judgment allowing the appeals filed by employees against the Uttar Pradesh government.

As per Rule 3(8) of the U.P. Retirement Benefit Rules, 1961, period of service in work charged establishments will not qualify for pension.

A pari materia provision contained in Rule 3.17(ii) of the Punjab Civil Service Rules was struck down by a Full Bench of Punjab & Haryana High Court in Kesar Chand v. State of Punjab. Following that judgment, a two judge bench of the SC in 2017 declared that period of service as work-charged under Uttarakhand Government was also entitled to be reckoned as qualifying service for pension.

The Advocate General for UP, Raghuvendra Singh, argued that there was conceptual difference between regular and work-charged employees. Work-charged employees are not appointed by following the same procedure as that of regular employees. Work pressure and accountability also differ. He has further submitted that work-charged services cannot be treated as regular service even for Assured Career  Progression (ACP). The Government has the power to frame different rules for different classes of employees as such Rule 3(8) of the Rules and Regulation 370 cannot be said to be arbitrary and discriminatory, argued the AG.

 The provisions contained in Regulation 370 of the Civil Services Regulations excludes service in a non-pensionable establishment, work-charged establishment and in a post paid from contingencies from the purview of qualifying service. Under Regulation 361 of the Civil Services Regulations, the services must be under the Government and the employment must be substantive and permanent basis.

The SC noted from facts that work-charged employees were subjected to similar conditions as regular employees :

"The appointment of the work-charged employee in question had been made on monthly salary and they were required to cross the efficiency bar also. How their services are  qualitatively different from regular employees? No material indicating qualitative difference has been pointed out except making bald statement. The appointment was not made for a particular project which is the basic concept of the work charged employees. Rather, the very concept of work-charged employment has been misused by offering the employment on exploitative terms for the work which is regular and perennial in nature. The work-charged employees had been subjected to transfer from one place to another like regular  employees as apparent from documents placed on record."

"it was unfair on the part of the State Government and its officials to take work from the employees on the work-charged basis. They ought to have resorted to an appointment on regular basis. The taking of work on the workcharged basis for long amounts to adopting the exploitative device. Later on, though their services have been regularized. However, the period spent by them in the work-charged establishment has not been counted towards the qualifying service. Thus, they have not only been deprived of their due emoluments  during the period they served on less salary in work charged establishment but have also been deprived of counting of the period for pensionary benefits as if no services had been rendered by them. The State has been benefitted by the services rendered by them in the heydays of their life on less salary in workcharged establishment. "

The judgment authored by Justice Arun Mishra added :

"There is no rhyme or reason not to count the service of work-charged period in case it has been rendered before regularisation. In our opinion, an impermissible classification has been made under Rule 3(8). It would be highly unjust, impermissible and irrational to deprive such employees benefit of the qualifying service. Service of work-charged period remains the same for all the employees, once it is to be counted for one class, it has to be counted for all to prevent discrimination. The classification cannot be done on the irrational basis and when respondents are themselves counting period spent in such service, it would be highly discriminatory not to count the service on the basis of flimsy classification."

"In view of reading down Rule 3(8) of the U.P. Retirement Benefits Rules, 1961, we hold that services rendered in the work-charged establishment shall be treated as qualifying service under the aforesaid rule for grant of pension. The arrears of pension shall be confined to three years only before the date of the order. Let the admissible benefits be paid accordingly within three months", ordered the Court.

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