Equal Pay for Equal Work: Supreme Court Ruling on Bihar State Beverages Corporation Employees

The Supreme Court of India recently ruled in favor of employees of the Bihar State Beverages Corporation Limited (the Corporation), granting them the benefit of the 6th Pay Revision Commission (PRC). The ruling comes as a significant victory for the employees, who were working on deputation and contract basis, ensuring that they receive equal pay for equal work.

The case was brought before the Court after the Bihar State Beverages Corporation challenged the judgment of the Division Bench of the Patna High Court. The High Court had previously ruled in favor of the employees, striking down the Corporation’s resolution that denied them the revised pay scale.

Background of the Case

The case revolved around the employees of the Corporation who were appointed on deputation and contract basis. The Corporation was formed in 2006 as a government company under the Companies Act, with the primary objective of improving excise revenue in Bihar. It was decided that appointments in the Corporation would be made through deputation or contract rather than direct recruitment.

The Corporation issued an advertisement in 2006, offering positions such as Manager, Accounts Officer, Accountant, and Depot Manager. The pay scale for these positions was based on the 5th Pay Revision Commission’s recommendations. Employees from various state entities, including Bihar State Pharmaceutical and Chemical Development Corporation, Bihar State Handloom and Handicraft Development Corporation, and Land Mortgage Bank, were appointed under these terms.

Dispute Over 6th Pay Revision Implementation

While the Corporation initially resolved in 2010 to grant the revised 6th PRC pay scale to its employees, the Finance Department objected. The Department advised that only permanent employees of the Corporation should receive the benefits of the 6th PRC, excluding those on deputation or contract. As a result, in 2012, the Corporation passed a resolution limiting the pay scale benefits for deputed employees to what they received in their parent organizations.

Aggrieved by this decision, the employees filed writ petitions before the Patna High Court, demanding the implementation of the 6th PRC pay scale. The Single Judge of the High Court dismissed the petitions, stating that extending the 6th PRC pay scale would create disparity between the deputed employees and those working in their parent organizations.

Patna High Court Division Bench Ruling

The employees appealed to the Division Bench of the Patna High Court. The Bench ruled in their favor, setting aside the Corporation’s resolution and directing that all employees working in the Corporation must be paid equally under the principle of equal pay for equal work.

The High Court stated that denying the pay scale benefit violated the employees’ fundamental rights under Article 14 of the Constitution of India. The ruling mandated that the Corporation implement the 6th PRC pay scale for all employees, irrespective of their appointment mode.

Supreme Court’s Judgment

Challenging the High Court’s ruling, the Corporation approached the Supreme Court. The Corporation contended that the employees were not entitled to the 6th PRC benefits as they were not permanent employees. It further argued that since the employees were on deputation, they should receive the same pay scale as in their parent organizations.

The Supreme Court dismissed the appeal, affirming the High Court’s ruling. The Court observed:

“If the resolution dated 27.3.2012 is implemented, there shall be disparity in the pay scale/salary of the employees of the Corporation doing the same/similar work.”

The Court further noted:

“It is an admitted position that there is not a single employee working in the Corporation who is appointed on a permanent basis, and the entire staff/employees of the Corporation are either on deputation or contract basis.”

Key Takeaways from the Ruling

• The Supreme Court reaffirmed the principle of equal pay for equal work, ensuring that employees performing the same duties receive the same compensation.
• The Court held that the Corporation’s resolution to deny 6th PRC benefits was arbitrary and violated fundamental rights under Article 14 of the Constitution.
• The ruling ensures that deputed and contracted employees of the Corporation receive the same pay scale as permanent employees.

Conclusion

The Supreme Court’s judgment in this case is a landmark decision that upholds the principle of fairness and non-discrimination in wage structures. It sets a precedent for similar cases, reinforcing the constitutional guarantee of equal pay for equal work. The ruling mandates that all employees in the Corporation, regardless of their appointment mode, should receive the same pay scale, ensuring financial equity and job satisfaction among the workforce.

Petitioner Name: Bihar State Beverages Corporation Ltd. & Ors..
Respondent Name: Naresh Kumar Mishra & Ors..
Judgment By: Justice L. Nageswara Rao, Justice M. R. Shah.
Place Of Incident: Bihar.
Judgment Date: 05-02-2019.

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