EQUAL PAY FOR EQUAL WORK - Temporary V/s Regular employees - By R N MISRA

On October 26, 2016, the Hon. Supreme Court of India pronounced the judgement in the case of State of Punjab & Ors. V/s Jagjit Singh and Ors., in the Civil Appeal No. 213 of 2013. Along with this case, they disposed of another 53 similar civil appeals together. This judgement has led to the debate as to whether the temporarily engaged employees (dailywage employees, ad-hoc appointees, employees appointed on casual basis, contractual employees and the like) are entitled to the minimum of the regular payscale, along with dearness allowance (as revised from time to time) on account of their performing the same duties, which are discharged by those engaged on regular basis, against sanctioned posts.

During last three decades, there have been several pronouncements delivered by the Hon. Supreme Court of India on same or similar matters by even the larger bench. The instant case arose out of a judgement passed by the single judge bench of the Punjab & Haryana High Court in the case of Rajinder Singh & Ors. V/s State of Punjab & Ors., CWP No. 1536 of 1988 decided on 5/2/2003, followed by setting it aside by the Division Bench order in the LPA No. 337 of 2003, decided on 7.1.2009, in an intra-court appeal, which had affirmed the decision of the single judge, in connection with appeals preferred by the employees. In view of the conflicting views of the two division benches in the same matter, this was referred to the full bench of the High Court to resolve the dispute emerging out of the differences of opinion expressed in the above two judgements, in the case of Avtar Singh V/s State of Punjab &Ors. (CWP No. 14796 of 2003). The full bench of the Hon. High Court, while adjudicating the controversy had concluded, that such temporary employees were not entitled to the minimum of the regular pay-scale, merely for the reason, that the activities carried on by dailywagers and the regular employees were similar. However, they carved out two exceptions, and extended the minimum of the regular pay to such employees. They carved out the exceptions, such as selection process of the daily wager, ad-hoc or contractual appointees against the regular sanctioned posts and the process of selection based upon fairness and equity, the services having been availed continuously and perennial in nature with notional breaks.

The issue before the Hon. Supreme Court in the appeals was on the underlined ingredients, which govern the principle of “Equal Pay for Equal Work”. For the said purpose, the Hon. Court examined the issue in two stages. They first examined the situations where the principle of “Equal Pay for Equal Work” has been extended to the employees engaged on regular basis, and thereafter, how the same has been applied with reference to different categories of employees.

The Hon. Court took the enormous painsto review about 35 judgements delivered by the same court during the period between 1982 and 2014. More or less all these cases were on same and similar points with little bit of variations here and there. They relied on the judgement delivered by the 3-Judge Bench in the case of Randhir Singh V/s Union of India; (1982) 1 SCC 618, wherein the principle of “Equal Pay for Equal Work” had been interpreted. In the said case, it had been concluded that the principle of “Equal Pay for Equal Work”, which meant equal pay for everyone, irrespective of sex, was deducible from the Preamble and Articles 14,16 and 39 (d) of the Constitution. This principle was applicable to cases of unequal scales of pay, based on no classification, or irrational classification, though both sets of employees performed identical duties and responsibilities.

They referred their earlier judgement in the case of State Bank of India V/s MR Ganesh Babu; (2002) 4 SCC 556, wherein it has been well settled that equal pay must depend upon the nature of work done. It cannot be judged by the mere volume of the work; there may be qualitative difference as regards reliability and responsibility. Functions may be the same, but the responsibilities make a difference. One cannot deny that often the difference is a matter of degree, and that there is an element of value judgement by those, who are charged with the administration in fixing the scales of pay and other conditions of service. So long as such value judgement is bona-fide, reasonably on an intelligible criterion, which has a rational nexus with the object of differentiation, such differentiation will not amount to discrimination.

While referring to the judgement delivered by the 2-Judge Bench in the case of State of West Bengal V/s West Bengal Minimum Wages Inspectors Association; (2010) 5 SCC 225, they observed that the burden to prove disparity is on the employees claiming parity. Similar views have been expressed in the case of Steel Authority of India Limited V/s Dibyendu Bhattacharya; (2011) 11 SCC 122 in which it has been observed that granting parity in pay scales depends upon the comparative valuation of job and equation of posts. A person claiming parity must plead necessary averments and prove that all things are equal between the posts concerned. Such a complex issue cannot be adjudicated by evaluating the affidavits filed by the parties. The onus to establish the discrimination by the employer lies on the person claiming the parity of pay. The courts in exercise of their limited power of judicial review can only examine whether the decision of the state authorities is rational and just or pre-judicial to a particular set of employees. The court has to keep in mind that a mere difference in service conditions does not amount to discrimination. Unless there is complete and wholesome identity between the two posts, they should not be treated as equivalent, and the court should avoid the principle of “Equal Pay for Equal Work”. The Apex Court also referred to the 5-Judge Constitution Bench judgement delivered in the case of Secretary, State of Karnataka V/s Uma Devi; (2006) 4 SCC 1, and concluded that the Constitution Bench consciously distinguished the issue of pay parity, from the issue of absorption/regularisation in service. The concept of equality could not be made applicable to the issue of absorption/regularisation in service. And conversely, on the subject of parity, it was unambiguously held, that daily wage earners should be paid wages equal to the salary at the lowest grade (without any allowances). After having analysed 35 of their own judgements, the Hon. Supreme Court drew the following conclusions in the instant appeals – 

i) The “onus of proof” of parity of duties and responsibilities of the subject post with the reference post under the principle of “Equal Pay for Equal Work”, lies on the claimant;

ii) Persons discharging identical duties cannot be treated differently in the matter of their pay, because they belong to departments of government;

iii) The principle of “Equal Pay for Equal Work” applies to unequal scales for pay based on no classification or irrational classification;

iv) Persons holding the same ranks/ designations (in different department), but having dis-similar powers, duties and responsibilities, can be placed in different scales of pay and cannot claim the benefit of “Equal Pay for Equal Work”.
The principle would not be automatically invoked; 

v) Under the principle, it is necessary to keep in mind that the duties of the two posts should be of equal sensitivity, and also, qualitatively similar. Differentiation of pay scales for posts with difference in degree of responsibility, reliability and confidentiality, would fall within the realm of valid classification, and therefore, pay differentiation would be legitimate and permissible. The nature and volume of work should be the same;

vi) For placement in regular pay scale, the claimant has to be selected on the basis of a regular process of recruitment; 

vii) Persons performing the same or similar functions, duties and responsibilities, can also be placed in different pay scales, that is, “selection grade” in the same post. But this difference must emerge out of legitimate foundation, such as merit or seniority or some other relevant criteria;

viii) If the qualifications for recruitment for the subject post vis-à-vis the reference post are different, it may be difficult to conclude that the duties and responsibilities of the posts are qualitatively similar or comparable;

ix) The reference post with which is parity claimed, under the principle of “Equal Pay for Equal Work”, has to be in the same hierarchy in the service, as the subject post. Payscales of the posts may be different, if the hierarchy of posts in question and their channels of promotions are different. Even if the duties and the responsibilities are same, parity would not be permissible against a superior post, such as promotional post;

x) A comparison between the subject post and the reference post, under the principle of “Equal Pay for Equal Work” cannot be made, where the subject post and the reference posts are in different establishments, having a different management or even different geographical locations though owned by the same master;

xi) If the duties and responsibilities of one of the posts are onerous or exposed to higher nature of operational work/risk, the principle of “Equal Pay for Equal Work” would not be applicable;

xii) The priority given to different types of posts, under the prevailing policies of the government, can also be a relevant factor for placing different posts under different pay scales;

xiii) The parity cannot be claimed merely on the ground that at an earlier point of time, the subject post and the reference post were placed in the same pay scale. It has to be established that the employee discharged similar duties and responsibilities;

xiv) For parity in pay scales, equation in nature of duties is of paramount importance. If the dominant nature of duties of one post is of control and management, whereas the subject post has no such duties, the principle would not be applicable;

xv) There can be a valid classification in the matter of pay scales, between the employees even holding posts with same nomenclature i.e. between those discharging duties at the headquarters and others working at the institutional/suboffice level;

xvi) The principle would not be applicable, where a differential higher payscale is extended to persons discharging the same duties and holding the same designation with the objective of ameliorating stagnation, or on account of lack of promotional avenues; and

xvii)Where there is no comparison between one set of employees of one organisation, and another set of employees of different organisation, there can be no question of equation of pay scales, under the principle of “Equal Pay for Equal Work”, even if two organisations have common employer. Likewise, if the management and control of two organisations is with different entities, which are different in one and another, the principle would not apply.

Thus the Hon. Supreme Court has delivered comprehensive guidelines to understand the principle of “Equal Pay for Equal Work” and its application. However, in the instant case, in reference upon which, the Hon. Court has laid down the guidelines, it has observed that paying less wages as compared to others similarly situated, constitutes an act of exploitative enslavement, emerging out of a domineering position, and such action is oppressive, suppressive and cohesive as it compels involuntary subjugation. 

Since the case of the employees was in a different footing, and as it was not the case of the state that any of the temporary employees would not be entitled to pay parity on any of the principles as mentioned above, the Hon. Court concluded that the principle of “Equal Pay for Equal Work” would be applicable, and the employees would be entitled to draw wages at the minimum of the pay scale at the lowest grade, in the regular pay scale extended to regular employees holding the same post.

Head HRM – ER, Tata Steel, Jamshedpur


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