Railway Pension Benefits: Supreme Court’s Ruling on Casual Labourers’ Rights

The Supreme Court recently delivered a landmark judgment in the case of Union of India & Ors. vs. Rakesh Kumar & Ors., along with a batch of related appeals, concerning the pensionary benefits of casual labourers who had attained temporary status and were subsequently regularized.

The core issue in these appeals was whether a casual worker, after obtaining temporary status, is entitled to reckon the entire period of temporary status service for pensionary benefits or only 50% of such service.

Background of the Case

The respondents, initially appointed as casual labourers in the Northern Railway, were granted temporary status after working for one or more years. Subsequently, they were regularized against permanent posts. They filed claims demanding full service benefits for the period during which they held temporary status, instead of the 50% benefit granted by the Railways.

Several orders by the Central Administrative Tribunal (CAT) had previously ruled in favour of the employees, directing the Railways to grant full pensionary benefits for the temporary status period. The Delhi High Court upheld these rulings, prompting the Union of India to appeal before the Supreme Court.

Petitioner’s Arguments

The Union of India contended that the Tribunal and the High Court erred in holding that a casual worker is entitled to reckon 100% of the period after obtaining temporary status for computation of pension. The petitioner relied on Railway Services (Pension) Rules, 1993, specifically Rule 31, which provides that only 50% of such service can be counted for pensionary benefits. The government also cited previous Supreme Court rulings, particularly General Manager, North West Railway & Ors. vs. Chanda Devi, to support its claim that only 50% of the temporary status period should be considered.

Respondent’s Arguments

The respondents argued that once a casual labourer attains temporary status, they should be treated at par with regular employees for pension purposes. They cited Rule 20 of the Railway Services (Pension) Rules, 1993, which states that qualifying service for pension commences from the date of taking charge in a temporary capacity.

Supreme Court’s Observations

The Court carefully analyzed Rule 31 of the Railway Services (Pension) Rules, 1993, which states:

Half the service paid from contingencies shall be taken into account for calculating pensionary benefits on absorption in regular employment.

The Court observed that there is a clear distinction between casual labour with temporary status and regular railway servants. It held that Rule 20 of the Pension Rules does not apply to casual labourers, as they are not appointed against regular posts.

Judgment of the Supreme Court

The Supreme Court ruled as follows:

1. Casual workers, after obtaining temporary status, are entitled to reckon only 50% of their service till their regularization for the purpose of pension calculation.
2. Casual workers are also entitled to count 50% of their casual service before obtaining temporary status for pension purposes.
3. Those casual workers who were appointed to any post (substantively, officiating, or temporarily) can reckon the entire service period from the date of appointment as per Rule 20.
4. It is open to the Pension Sanctioning Authority to recommend relaxation under Rule 107 of the Pension Rules in deserving cases.

The Court set aside the Delhi High Court’s judgment, ruling in favor of the Union of India and allowing the appeal.

Impact of the Judgment

This ruling clarifies the pension entitlements of thousands of casual railway workers who were granted temporary status before being regularized. It reinforces the applicability of existing pension rules while allowing for relaxation in exceptional cases.

By emphasizing the distinction between casual labour with temporary status and regular employees, the Supreme Court has upheld the existing framework for pension computation in railway service, ensuring clarity and consistency in pension calculations for casual employees.

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Download Judgment: Union of India & Ors vs Rakesh Kumar & Ors. Supreme Court of India Judgment Dated 24-03-2017.pdf