Employee has no right to voluntary retirement: SC
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Last Updated: Thursday, September 24, 2009, 23:27
  
New Delhi: An employee has no inherent right to "voluntary retirement" as the same is subject to the rules framed by the employer governing the scheme, the Supreme Court has ruled.

A bench of Justices Tarun Chatterjee and R M Lodha said if the scheme specifically stipulates that the voluntary retirement offer made by an employee is to be approved by the competent authority, then the employee cannot insist that he should be granted retirement even if it is not approved by the management.

The bench passed the ruling while dismissing the appeal by Padubidri Damodar Shenoy, Airport Manager of Indian Airlines, who challenged the state-owned carrier's decision not to accept his offer of voluntary retirement made in 2003.

Regulation 12 of the Service Regulations, (Indian Airlines) enables an employee to seek voluntary retirement on attaining the age of 55 years or on completion of 20 years of continuous service by giving three months notice.

However, the rule stipulated that the plea for voluntary retirement of an employee who has completed 55 years stands automatically accepted, whereas, under clause(B) in the case of those who have completed 20 years of service, but not attained 55 years, the same is subject to the approval of the competent authorities.

Shenoy had completed 20 years of service but did not complete 55 years and his offer of voluntary retirement was rejected by the management.

The employee challenged the rejection before the Bombay High Court which dismissed his plea, after which he moved the apex court.

Upholding the management's decision, the apex court noted that the rules under clause (B) was categorical in that it clearly stipulated that an offer of voluntary retirement made by an employee who had not attained 55 years but completed 20 years of service shall be subject to approval.

"The key words therein are that voluntary retirement under clause (b) shall be subject to approval", the bench pointed out.

It said the use of the word 'shall' in the proviso prima facie leads to an inference that the provision is imperative.

"There is nothing in the context to suggest that it is merely directory. It is followed by the words, 'subject to approval'. The effect of the use of words 'subject to' is to introduce a condition.

"The expression, 'shall be subject to approval' is indicative of its intendment that the voluntary retirement applied by employees covered by clause (b)is effective only upon approval by the competent authority," the apex court said.

The apex court also rejected Shenoy's argument that since no reply was communicated to his notice for voluntary retirement within three months of his notice, the approval was deemed to be automatic.

"There is nothing to indicate in Regulation 12 that if employer decides to withhold approval of voluntary retirement, such refusal of approval must be communicated to the petitioner during the period of notice," the bench said.

Bureau Report


First Published: Thursday, September 24, 2009, 23:27


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