Bihar Government Wins Case: Supreme Court Upholds ‘No Work, No Pay’ for Retrenched Employees

The Supreme Court of India, in its judgment in The State of Bihar & Ors. vs. Baliram Singh & Ors., ruled against former Adult Education Supervisors who sought salary payments for the period between 2001 and 2007. The Court reaffirmed the principle of ‘no work, no pay’ and held that since the respondents had not been in active service during the disputed period, they were not entitled to salary benefits. This case sets an important precedent for similar service matters across the country.

Background of the Case

The respondents in this case were originally appointed as Adult Education Supervisors between 1981 and 1987 in Bihar. Their employment was linked to a government scheme that was later abolished. As a result, their services were terminated in 2001. However, in 2007, they were reappointed to government service under a new policy. The respondents claimed that they were unfairly deprived of salaries for the period between their termination and reappointment and approached the Patna High Court seeking relief.

High Court’s Ruling

The Patna High Court ruled in favor of the respondents, directing the Bihar Government to pay salaries for the period from October 1, 2001, to July 3, 2007. The State of Bihar, dissatisfied with this ruling, appealed the decision before the Supreme Court.

Key Legal Issues

• Were the respondents entitled to back wages for the period when they were not in employment?
• Was their reappointment in 2007 a reinstatement or a fresh appointment?
• Did the principle of ‘no work, no pay’ apply to their case?
• Should their past service be considered for salary entitlements?

Arguments by the State of Bihar

The Bihar Government contended:

• The respondents were not reinstated but given fresh appointments in 2007.
• They had failed to challenge their termination in 2001 or the policy decision of 2005, which outlined new employment terms.
• The principle of ‘no work, no pay’ applied, and since the respondents had not worked between 2001 and 2007, they could not claim salaries for that period.
• The terms of their 2007 appointment made it clear that their past service would only be considered for pension purposes, not for salary entitlements.

Arguments by the Respondents

The respondents argued:

• Their termination in 2001 was unfair and should be treated as wrongful dismissal.
• That similar cases had been decided in favor of retrenched employees, with back wages awarded.
• Their reappointment in 2007 should be considered a continuation of their previous service.
• The government’s decision to withhold their salaries during the period of unemployment was arbitrary and unjust.

Supreme Court’s Judgment

The Supreme Court, through Justices A.M. Khanwilkar and L. Nageswara Rao, ruled that the respondents were not entitled to back wages. The Court emphasized that the respondents had not worked during the relevant period, making them ineligible for salaries.

“Unless the respondents are to be reinstated in their previous posts held prior to April 1, 2001, the question of awarding back wages for the period during which they were not in employment does not arise.”

Key Findings

• The respondents’ reappointment in 2007 was a fresh appointment, not a reinstatement.
• The principle of ‘no work, no pay’ was applicable since the respondents did not work during the disputed period.
• Past service was only counted for pension benefits, not salary entitlements.
• Since the respondents failed to challenge their termination in 2001 or the government policy of 2005, their case was weakened.
• The High Court’s reliance on previous cases was misplaced, as the facts in those cases were different.

Legal Precedents Considered

The Supreme Court referred to multiple past rulings to support its decision:

• In State of Bihar & Ors. vs. Arun Kumar, the Court had held that employees who did not challenge their termination could not claim back wages later.
• In H.C. Puttaswamy vs. State of Karnataka, it was ruled that mere absence from work does not entitle an employee to claim salaries for that period.
• The Court reaffirmed the long-established doctrine that salary payments must correspond to actual work done.

Impact of the Judgment

• Reaffirms the principle that government employees cannot claim salaries for periods they did not work.
• Ensures that state governments have legal backing in implementing employment schemes without retrospective financial burdens.
• Sets a precedent for handling future disputes involving retrenched employees.
• Clarifies that policy decisions regarding employment schemes are binding unless legally challenged in time.

Final Order

The Supreme Court set aside the High Court’s judgment and dismissed the claims of the respondents. The ruling provides clarity on service matters related to retrenched employees and upholds the validity of the ‘no work, no pay’ doctrine in India’s legal system.

Petitioner Name: The State of Bihar & Ors..
Respondent Name: Baliram Singh & Ors..
Judgment By: Justice A.M. Khanwilkar, Justice L. Nageswara Rao.
Place Of Incident: Bihar.
Judgment Date: 29-10-2018.

Don’t miss out on the full details! Download the complete judgment in PDF format below and gain valuable insights instantly!

Download Judgment: The State of Bihar & vs Baliram Singh & Ors. Supreme Court of India Judgment Dated 29-10-2018.pdf

Direct Downlaod Judgment: Direct downlaod this Judgment

See all petitions in Employment Disputes
See all petitions in Pension and Gratuity
See all petitions in Recruitment Policies
See all petitions in Judgment by A M Khanwilkar
See all petitions in Judgment by L. Nageswara Rao
See all petitions in allowed
See all petitions in Quashed
See all petitions in supreme court of India judgments October 2018
See all petitions in 2018 judgments

See all posts in Service Matters Category
See all allowed petitions in Service Matters Category
See all Dismissed petitions in Service Matters Category
See all partially allowed petitions in Service Matters Category