Case Note & Summary
The writ petition was filed by a retired Special Grade Conductor of the Tamil Nadu State Transport Corporation (Kumbakonam) Ltd., Karur Region, seeking a writ of mandamus to revise his scale of pay with effect from 01.09.2019 till his retirement on 31.12.2019, based on a wage settlement dated 24.08.2022, and to pay the consequential difference in terminal benefits, namely gratuity and encashment of leave, together with 18% interest. The employee retired on 31.12.2019. Subsequent to his retirement, a wage settlement was entered between the Union and the Management on 24.08.2022, but it was made applicable with effect from 01.09.2019. The employee contended that he was entitled to the benefit of this settlement for the period from 01.09.2019 until his retirement, and that his terminal benefits were erroneously settled without reference to the settlement terms. The respondent did not substantively dispute the claim. The court, after hearing both sides and perusing the record, found that the employee's stand could not be disputed. The court held that the employee was entitled to the differential benefits in respect of gratuity, provident fund, and leave salary. The court directed the respondent Corporation to pay these differential amounts within six months from the date of receipt of a copy of the order. It further directed that the differential payment carry interest at 6% per annum computed from the date of the employee's retirement (31.12.2019) until the date of actual payment. No order as to costs was made. The writ petition was allowed accordingly.
Headnote
A) Labour Law - Wage Settlement - Retrospective Applicability - Not mentioned - A wage settlement entered between union and management on 24.08.2022, made applicable with effect from 01.09.2019, covers the period of employment of a retired employee. The employee is entitled to revision of pay scale and differential terminal benefits (gratuity, provident fund, leave salary) even though he retired on 31.12.2019. The respondent's action of settling terminal benefits without reference to the settlement terms was held unlawful. The court directed payment of differential amount with 6% interest per annum from the date of retirement until payment, and allowed the writ petition (Paras 2-4).
Issue of Consideration
Whether a retired employee is entitled to the benefits of a wage settlement entered after retirement but made applicable from a date prior to retirement for the purpose of computation of terminal benefits.
Final Decision
The writ petition is allowed. The respondent Corporation is directed to pay differential benefits in respect of gratuity, provident fund and leave salary within six months, with interest at 6% per annum computed from the date of petitioner's retirement (31.12.2019) till payment. No costs.
Law Points
- Retrospective wage settlement entitles retired employees to revised pay scale and terminal benefits
- differential amount must be paid with interest
- mandamus under Article 226 can be issued to enforce such entitlements
- interest on delayed payment of retiral benefits is a right
