Case Note & Summary
The petitioner, K.Selvaraj, retired as a Special Grade Conductor from the respondent Tamil Nadu State Transport Corporation (Kumbakonam) Ltd. on 29.02.2020. After his retirement, a wage settlement was entered on 24.08.2022 between the Union and the Management, which was made applicable retrospectively with effect from 01.09.2019. The petitioner was denied the benefit of this wage settlement for the period from 01.09.2019 until his retirement, and his terminal benefits were settled without reference to the settlement terms. He filed a writ petition under Article 226 of the Constitution of India seeking a writ of mandamus directing the respondent to re-fix his pay scale from 01.09.2019 to his retirement based on the settlement, and to pay the differential arrears of wages and terminal benefits (gratuity and leave encashment) with 18% interest. The court found that the petitioner was indeed entitled to the benefits of the settlement since it covered the period of his service. The stand of the petitioner was not disputed. The court directed the respondent Corporation to pay the differential benefits in respect of gratuity, provident fund, and leave salary, with 6% interest per annum from the date of retirement until payment, within six months. No order as to costs was made.
Headnote
A) Labour and Employment - Wage Settlement - Retrospective Entitlement - Not mentioned - A retired employee is entitled to the benefit of a wage settlement entered into after his retirement but applied retrospectively to a period during which he was in service, and the employer is liable to pay differential terminal benefits with interest. The court directed the respondent Corporation to pay differential gratuity, provident fund, and leave salary with 6% interest per annum from date of retirement till payment within six months. Held: The stand of the petitioner cannot be disputed, and the petition is allowed. (Paras 2-5)
Issue of Consideration
Whether a retired employee is entitled to benefits under a wage settlement entered into after his retirement but made effective from a date prior to retirement, and whether interest is payable on delayed terminal benefits.
Final Decision
The writ petition was allowed. The respondent Corporation was directed to pay the differential benefits in respect of gratuity, provident fund, and leave salary to the petitioner, with 6% interest per annum from the date of retirement (29.02.2020) till the date of payment, within a period of six months from the date of receipt of a copy of the order. There was no order as to costs.
Law Points
- A retired employee is entitled to the benefit of a wage settlement entered into after retirement but applied retrospectively to a period during which he was in service
- and the employer is liable to pay differential terminal benefits with interest.
