Even casual employees cannot be denied pension if their employment has the hallmarks of regular government service: SC – News18

The Supreme Court said that pension benefits cannot be denied to casual employees when their employment has substantially the same characteristics as regular government service, regardless of their formal classification.

A bench of Justices Hima Kohli and Sandeep Mehta directed the Union government to grant Sixth Central Pay Commission benefits, including pension benefits under the Revised Pay Scale Rules, 2008, to a group of employees appointed on an ad-hoc basis to manage the Compulsory Savings Scheme Deposit Fund of the Special Border Force in various capacities and who have served for more than 30 years.

The Court held that the denial of pension benefits to these employees was arbitrary and in violation of the fundamental rights guaranteed under Articles 14 and 16 of the Constitution and therefore cannot be supported or justified in law.

“Denying pension benefits solely on the grounds that they are temporary employees, without due consideration of these factors, appears to be an oversimplification of the government employment relationship. This approach risks creating a class of employees who have served the government for decades in a manner indistinguishable from permanent employees, yet are deprived of the benefits and protections normally accorded to government employees,” the court said.

After hearing arguments by counsel Neha Rathi appearing for the employees/appellants Rajkaran Singh and others and Additional Solicitor General for the Union Government KM Nataraj, the court noted that the provisions for leave and other benefits, including grant of assured career progression (ACP), strengthen the similarity between the terms and conditions of employment of the appellants and those of regular government employees.

They noted that these benefits typically come with formal, long-term employment relationships within the government sector.

“There is no doubt that the appellant has served the SFF headquarters for more than three decades. While length of service alone may not be conclusive, it becomes significant when considered along with other aspects of employment. Such long service suggests a level of permanence and integration into the government organisation which does not justify the classification of casual employee,” the court said.

The Court also noted that the appellant performed duties similar to those of a regular employee in the accounting department at SFF headquarters.

“The similarities in job duties further blur the line between the appellant’s status and that of a general government employee, suggesting that the distinction may be more formal than substantive. The extension of key elements of the Fourth and Fifth Codes of Civil Procedure to the appellant further strengthens the case that the appellant is in the employment of a government agency,” the court said.

The Court also held that the argument that the process of recruitment, selection and promotion of employees of SSD Fund did not follow the procedures applicable to permanent employees was not acceptable as it did not take into account the substantial nature of the appellant’s employment over a long period spanning three decades.

Citing Vinod Kumar and others v. Union Government of India (2024), the court noted, “This Court has observed that where the actual course of employment has changed significantly with the passage of time, the nature of employment and entitlement thereto cannot be determined solely on the terms and conditions of initial recruitment.”

On the question of whether an entity can be considered as an organ or agent of the Government and therefore an “authority” under Article 12 of the Constitution, the Court said the criteria include, but are not limited to, the extent of financial support from the Government, deep and pervasive control by the Government, performance of functions of public importance and closely related to the functions of the Government, the entity enjoying a monopoly status granted or protected by the State, government departments being transferred to the entity, etc.

“It is not necessary for all the tests to be answered in the affirmative and it will not be sufficient to answer one or two tests in the affirmative. It will depend on a combination of one or more relevant factors depending on the importance and preponderant nature of such factors in identifying the true source of governing power and, if necessary, will have to uncover the mask or pierce the veil disguising the body concerned,” the court said.

On this issue, the Court further referred to Ajay Hasia v. Khalid Mujib Sehravardi (1981) and Pradeep Kumar Biswas v. Indian Institute of Chemical Biology (2002).

In the present case, the Court also observed that since the appellants’ group appears to be the last group of casual employees of the SSD Fund, clearly, a direction to extend the benefit of the 6th CPC and RP Rules to the appellants would set a precedent and should not adversely affect the financial health of the SSD Fund.

The Supreme Court therefore set aside the judgment of the Delhi High Court denying the benefit to the appellant as being legally unsustainable.