Kerala Health Department Seniority Dispute: Supreme Court’s Verdict on Absorbed Employees’ Rights

The Supreme Court of India has delivered an important ruling in the case of Geetha V.M. & Ors. vs. Rethnasenan K. & Ors., addressing the seniority dispute between original and absorbed employees of the Kerala Health Department. The case involved the transfer of employees from the Directorate of Health Services (DHS) to the Directorate of Medical Education (DME) following a policy decision by the State of Kerala to abolish the dual control system.

The dispute arose when absorbed employees from DHS claimed that their past service should be counted towards their seniority in DME, while the original employees of DME argued that the absorbed employees should be placed at the bottom of the seniority list as per the proviso to Rule 27(a) of the Kerala State and Subordinate Service Rules, 1958 (KS&SS Rules). The Kerala High Court had ruled in favor of the original employees, but the Supreme Court overturned this decision.

Background of the Dispute

The State of Kerala had long faced administrative challenges due to a dual control system where medical colleges were managed by the DME, but their staff—including nurses, paramedics, and clerical workers—were under the control of DHS. This led to inefficiencies in administration and delays in recruitment, promotion, and disciplinary actions.

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To resolve this issue, the government decided to abolish dual control and issued Government Order (G.O.) No. 548/2008/H&FWD on 25.10.2008. This order allowed existing DHS employees to opt for absorption into DME while maintaining their seniority. The government clarified that absorbed employees’ seniority would be determined based on Rule 27(a) and 27(c) of KS&SS Rules, meaning that their previous service in DHS would be counted.

The High Court’s Decision

The original employees of DME challenged this arrangement, arguing that since absorbed employees had exercised an option to join DME, it amounted to an inter-departmental transfer on request. As per the proviso to Rule 27(a) of KS&SS Rules, employees who transfer on request must be placed at the bottom of the seniority list.

The Kerala High Court agreed with the original employees and ruled that absorbed employees should be placed at the bottom of the seniority list in DME. This decision was challenged before the Supreme Court.

The Supreme Court’s Ruling

The Supreme Court overturned the Kerala High Court’s decision, holding that the absorption of DHS employees into DME was not a voluntary transfer but a policy-driven administrative action. The Court reasoned:

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• The absorption of DHS employees was a result of a government policy to improve efficiency in medical administration, not an individual request by employees.
• The government explicitly assured absorbed employees that their seniority would be maintained, as stated in Rule 8 of Appendix I of the G.O. dated 25.10.2008.
• The proviso to Rule 27(a) of KS&SS Rules applies only to transfers requested by employees, not to transfers made due to government policy decisions.
• Since the absorbed employees’ posts were also transferred along with them, they retained their seniority.

The Court concluded:

“The transfer by way of absorption on exercise of option as specified in Appendix I and Appendix II contained in G.O. dated 25.10.2008 does not attract the proviso to Rule 27(a) of KS&SS Rules, which only deals with the transfer on request or on mutual request. Thus, the action taken in public interest due to administrative exigency even on option is different than the action done on request.”

Impact of the Judgment

The Supreme Court’s ruling ensures that absorbed employees from DHS retain their past service seniority in DME, thereby protecting their promotional prospects. The verdict establishes a precedent that government-driven absorption processes should not be treated as voluntary transfers under service rules.

With this decision, the Court has clarified the legal interpretation of government-initiated employee absorption versus personal transfer requests, reinforcing the rights of employees who are absorbed under administrative policies.

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Petitioner Name: Geetha V.M. & Ors..
Respondent Name: Rethnasenan K. & Ors..
Judgment By: Justice J.K. Maheshwari, Justice Rajesh Bindal.
Place Of Incident: Kerala.
Judgment Date: 03-01-2025.

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