Case Note & Summary
The dispute arose regarding the entitlement of employees to pension under the State Bank of India Voluntary Retirement Scheme (VRS) framed in 2000. The employees, including Radhey Shyam Pandey, contended that they were entitled to pension upon completion of 15 years of service as per the VRS. The scheme was approved by the Central Board of Directors of SBI and was designed to rationalize the workforce in light of economic reforms and high establishment costs. The scheme provided for pension, gratuity, and other benefits for employees who opted for retirement under the VRS. The High Court had previously ruled in favor of the employees, stating that the clarification issued by the bank regarding pension eligibility was not part of the VRS and did not modify the original terms. The Supreme Court upheld this decision, emphasizing that the VRS constituted a binding contract and that the bank's actions were discriminatory and arbitrary. The court found that the employees had a legitimate expectation of receiving pension benefits based on the terms of the VRS, and any amendments made after their retirement were unfairly prejudicial. The court ultimately ruled that the employees were entitled to pension along with interest, reinforcing the principle that contractual obligations must be honored unless explicitly amended with the consent of all parties involved.
Headnote
A) Employment Law - Pension Eligibility - Employees entitled to pension on completion of 15 years of service under SBI VRS - State Bank of India Voluntary Retirement Scheme, 2000 - The court held that the pension was admissible to employees who completed 15 years of service as per the approved scheme, and any subsequent clarification that contradicted this was not binding. The scheme constituted a concluded contract, and the bank could not unilaterally alter its terms to the detriment of employees (Paras 1-25).
Issue of Consideration
Whether employees are entitled to pension on completion of 15 years of service under the State Bank of India Voluntary Retirement Scheme.
Final Decision
The Supreme Court upheld the High Court's decision, ruling that employees were entitled to pension on completion of 15 years of service under the VRS, and the bank's subsequent clarification was not binding.
Law Points
- Pension eligibility
- Voluntary Retirement Scheme
- contractual obligations
- discrimination
- retrospective amendments
