Govt to fix cut-off date to change pension conditions for employees: HC

Entitlement to post-retirement benefits is based on the terms of the services and it is open for the Central government to fix a cut-off date for the purposes of changing the conditions relating to payment of pension to its employees, the Delhi High Court said on Monday.

The observations came on a batch of petitions by some high court employees challenging a Central government office memorandum (OM) which said that the coverage under the Central Civil Services (Pension) Rules, 1972, i.e. the Old Pension Scheme was confined to only to those candidates who were recruited against vacancies arising on or before December 31, 2003 and the selection results were declared on or before April 1, 2004.

According to the government's new pension scheme, all other employees, which included the petitioners who received their appointment letters after the cut-off dates, would participate in the National Pension Scheme which is a contributory scheme.

The petitioners submitted that they had applied for recruitment pursuant to advertisements issued prior to the cut-off date and therefore the government's policy to exclude them was arbitrary.

Dismissing the petitions which sought coverage under the Old Pension Scheme, the court said that it was unable to accept that the OM was against the principles of law and that in the absence of a justifiable condition, a candidate, who joins his services after the cut-off date, would not be entitled to claim benefit of the prior scheme.

None of the employees, whose selection process was completed after 31.12.2003, has been extended the benefit of the Old Pension Scheme. Undisputedly, it is open for the Central government to fix a cut-off date for the purposes of changing the terms and conditions relating to pension. Clearly, there is no reason to hold that the Central government cannot fix the terms on which it hires employees, said a bench of Justices Vibhu Bakhru and Amit Mahajan.

In absence of any such (justifiable) condition, a candidate, who joins his services after the cut-off date, would not be entitled to claim benefit of the Old Pension Scheme. Merely because the recruitment process had commenced before 31.12.2003 but culminated after the said cut-off date, is not a ground for an employee to claim that the terms and conditions of his services should be the same as applicable on the date when the recruitment process was commenced and not the date on which he accepted the appointment, it stated.

The court further observed that since the petitioners did not claim that the New Pension Scheme was not invalid, the petitioners, who were appointed on the terms and conditions as applicable on the date of their appointment, cannot question the same except on the ground that the same is contrary to any provisions of law.

The court added that the date on which an employee accepts his employment is relevant for the purposes of determination of pension and when persons accepted an employment which did not include entitlement of pension under the Old Pension Scheme, there was no ground to fault the decision of the Central government to offer a different pension scheme.

The entitlement to the post-retirement benefits, including pension, is a matter pertaining to the terms and conditions of the services. This is a matter between the employer and the employee, the court said.

Since pension is part of the terms and conditions of the services, the date on which an employee accepts his employment is relevant and it would be necessary to fix a cut-off date for that purpose. Considering that the persons who have accepted the employment have done so by accepting the terms and conditions of their service, which does not include entitlement of pension under the Old Pension Scheme, this court finds no ground to fault the decision of the Central Government to offer a different pension scheme after the cut-off date, it said.