Case Note & Summary
The dispute arose from the employment of six ex-servicemen by the State Bank of India after their discharge from military service. They were employed between 1983 and 1984, and the Bank's pay fixation policy was based on the Government of India's directives to protect the last drawn pay of these employees. The Bank issued circulars in 1985 and 1986 regarding the fixation of pay, which led to a reduction in their salaries, prompting the employees to challenge this in the High Court. The High Court formulated several questions regarding the proper course of action for the Bank in light of the Fourth Bipartite Settlement, which was made retrospectively operative. The High Court upheld the Bank's circulars but allowed for corrections in pay fixation, ensuring that the total pay did not fall below the amount fixed at the time of their entry into service. The Bank contended that the High Court's conclusions were erroneous, arguing that the protection was for the pay drawn, not a specific scale. The employees argued that they were entitled to a corresponding scale of pay following the revision. The Supreme Court analyzed the legal principles surrounding pay fixation and concluded that the intention was to protect the last drawn pay, not a specific pay scale. The court allowed the Bank's appeal, dismissing the employees' appeals and upholding the Bank's circulars without costs.
Headnote
A) Employment Law - Pay Fixation - Protection of Pay - Banking Regulation Act, 1949 - The court held that the protection of pay for ex-servicemen was intended to ensure they did not receive less than their last drawn pay in military service, not to guarantee a specific pay scale. The High Court's conclusion that a scale of pay was to be protected was erroneous, leading to the allowance of the Bank's appeal (Paras 23-30).
Issue of Consideration
Whether the Bank was required to protect the pay scales of ex-servicemen upon their employment in accordance with the Bipartite Settlements.
Final Decision
The Supreme Court allowed the Bank's appeal, dismissing the employees' appeals and upholding the Bank's circulars regarding pay fixation without costs.
Law Points
- Pay fixation
- Ex-servicemen
- Bipartite Settlement
- Pay protection
- Employment law
