Employee has no right to voluntary retirement: SC

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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