Supreme Court Upholds Employee’s Date of Birth for VRS Benefits: A Landmark Ruling on Service Records

The Supreme Court of India, in the case of Shankar Lal vs. Hindustan Copper Ltd. & Others, delivered a significant ruling regarding an employee’s date of birth recorded in service documents and its impact on Voluntary Retirement Scheme (VRS) benefits. The Court ruled in favor of the appellant, Shankar Lal, and directed Hindustan Copper Limited (HCL) to provide him with the financial benefits corresponding to his correct date of birth, as recorded in his service book.

The judgment is a crucial precedent on employment disputes, emphasizing that unilateral changes to an employee’s service records at the end of their career, especially without their consent or hearing, violate principles of natural justice. The Court held that employers must adhere to official service records and cannot arbitrarily alter an employee’s date of birth to deny benefits.

Background of the Case

Shankar Lal, the appellant, was an employee of Hindustan Copper Limited (HCL), who retired under the company’s Voluntary Retirement Scheme (VRS) on October 3, 2002. The dispute arose when the company considered his date of birth as September 21, 1945, rather than the date recorded in his service book—September 21, 1949. This incorrect date of birth resulted in a reduction of his VRS benefits.

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Initially, the Rajasthan High Court ruled against the appellant, accepting the employer’s claim that the date of birth should be as per the Form ‘B’ register maintained under the Mines Act. Dissatisfied with this ruling, the appellant approached the Supreme Court.

Petitioner’s Arguments

Shankar Lal, through his legal counsel, argued that:

• His date of birth had been consistently recorded as September 21, 1949, in his service book and other official records.
• The company unilaterally changed his date of birth at the time of his VRS computation without any notice or opportunity for him to contest the decision.
• The change was made to deprive him of his rightful VRS benefits.
• The company’s standing orders and DPE guidelines were misapplied to justify this alteration.
• The Form ‘B’ register was never used as the basis for date of birth verification in employment matters, as per past court rulings.

Respondents’ Arguments

Hindustan Copper Ltd. defended its decision, stating that:

• The Form ‘B’ register recorded his age as 26 years when he joined in 1971, which implies a birth year of 1945.
• The mistake in the service book was an administrative error that needed correction.
• The company had discovered the discrepancy only during the VRS process and rectified it accordingly.
• The appellant never raised any objection to the Form ‘B’ entry during his entire tenure.

Supreme Court’s Judgment

The Supreme Court bench, comprising Justices Dr. Dhananjaya Y. Chandrachud and Aniruddha Bose, ruled in favor of the appellant, making the following key observations:

• Service Book as Primary Record: The Court emphasized that an employee’s service book, maintained throughout their employment, carries greater probative value than an initial entry in the Form ‘B’ register.
• Violation of Natural Justice: The employer unilaterally altered the employee’s date of birth without giving him an opportunity to present his case. This was deemed an arbitrary exercise of power.
• Employer’s Conduct: The Court found that the employer had consistently treated September 21, 1949, as the appellant’s birthdate throughout his career, and the last-minute change was unfair.
• Employer’s Responsibility: A public sector unit like Hindustan Copper Ltd. is expected to maintain service records diligently and act fairly when dealing with employee entitlements.
• Reinstatement of Benefits: The Court directed the employer to recalculate and provide the appellant’s VRS benefits based on his actual date of birth (September 21, 1949).

Implications of the Judgment

This landmark ruling has major implications for employment law and service matters:

• Protection Against Unilateral Changes: Employers cannot alter an employee’s service records arbitrarily to the detriment of the employee.
• Preserving the Sanctity of Service Books: The judgment reinforces that service books should be the primary reference for an employee’s credentials.
• Fair Treatment of Employees: The decision upholds the principles of fairness and justice in employer-employee relationships.
• Judicial Oversight: Courts will intervene in cases where administrative decisions cause financial loss to employees due to procedural irregularities.

Conclusion

The Supreme Court’s verdict in Shankar Lal vs. Hindustan Copper Ltd. & Others establishes a crucial precedent in employment law. It ensures that employees cannot be deprived of their entitlements based on arbitrary alterations of service records. The ruling reinforces the responsibility of employers to maintain accurate records and respect employees’ rights.

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Petitioner Name: Shankar Lal.
Respondent Name: Hindustan Copper Ltd. & Others.
Judgment By: Justice Dhananjaya Y. Chandrachud, Justice Aniruddha Bose.
Place Of Incident: Jaipur, Rajasthan.
Judgment Date: 20-04-2022.

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