Judgment on Implementation of Revised Pay Scales for Public Sector Undertakings

In a recent legal case, a court delves into the nuances of implementing revised pay scales for Public Sector Undertakings (PSUs), emphasizing the necessity of approval from the Administrative and Finance Departments of the government. The judgment sheds light on the importance of meeting eligibility criteria, including financial stability and adherence to government guidelines, before such implementations. Discover more about the court’s legal analysis in this intriguing case.

Facts

Odisha State Financial Corporation appealed against a judgment of the Division Bench of the High Court.
The Division Bench directed the Corporation to pay arrear benefits from April 1, 2012, in line with the decision of the Corporation’s Board of Directors.
The Corporation challenged this direction in the instant appeal.

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Analysis

The revised scale of pay under ORSP Rules, 2008 could not have been implemented without approval from the Administrative Department and the Finance Department of the Government of Orissa.
The Resolution dated 8 May 2009 by the Government of Orissa regarding the revision of scale of pay of State Public Sector Undertakings was subject to fulfilling eligibility criteria as per ORSP Rules 2008.
The financial condition of the Corporation, OSFC, was not conducive for implementing the revised pay according to the PE Department/Finance Department guidelines.
The Division Bench of the High Court overlooked the fact that the recommendations by PSUs need approval from the concerned Administrative Department and the Finance Department before implementation.
The Corporation/Board of Directors recommendations to implement the ORSP Rules to the Corporation’s employees were not approved by the Administrative Department or Finance Department of the Government of Orissa.
The Public Sector Undertakings must meet several eligibility criteria, including being up to date on statutory audits, not defaulting in employee payments, and not depending on the Government for financial support for implementing revised pay scales.
The Corporation had defaulted in payment to SIDBI and did not meet the criteria stipulated by the Finance and PE departments of the Government.
The minutes of the meeting under the Chairmanship of the Principal Secretary of the Government of India, MSME Department, dated 10 August 2016, highlighted the Corporation’s default in payment to SIDBI and the required approvals for implementing revised pay scales for PSUs.
In conclusion, the recommendations by the Committee of the Corporation were not approved by the Administrative Department, leading to the writ petition filed by the employees’ Union before the Single Judge.
The recommendations for the ORSP Rules, 2008 were introduced without approval from the Administrative or Finance Departments.
The findings of the learned Single Judge and affirmed in appeal are deemed unsustainable and warrant setting aside.
Government Resolution stated a condition of eligibility based on previous balance sheets showing consecutive profit for two years, which the Corporation’s balance sheet did not meet due to financial losses in preceding years.