Simran Sidhu
Introduction
The Calcutta High Court’s ongoing matter of Sandip Kumar Mitra v. The State of West Bengal highlights the tensions between government employees and employees of state-owned corporations. Government employees are governed by central or state service rules, such as the West Bengal Service Rules (WBSR), whereas employees of corporations, like the West Bengal Transport Corporation (WBTC) are subject to regulations framed under the statutory framework of these corporations. While Government employees generally enjoy uniform protections, corporation employees are subject to regulations designed to give corporations flexibility in managing their workforce.
The conflict becomes more complex because corporations performing public functions fall under the ambit of ‘State’ under Article 12 of the Indian Constitution as state corporations are companies controlled by the government with the goal of providing public services. Yet, the rights and protections for corporation employees vary significantly from government employees. It becomes complex to decide which rules of disciplinary actions, promotions, and retirement benefits govern these different classes of employees, as service rules and corporation rules are entangled to an extent.
Matter in Issue
Dispute revolves around the Career Advancement Scheme (hereinafter referred to as CAS), which determines when employees can move to higher pay scales without formal promotion. CAS is offered to employees as an alternative to promotion. Its purpose is to prevent stagnation in service, recognising that the right to be considered for promotion is a fundamental right.
The controversy erupts as a result of the memorandums issued by the West Bengal’s government in past three decades. The 1990 memorandum conferred two CAS benefits over twenty years, but it only applied to the government employees. In 2000, a subsequent memorandum extended these benefits to employees of state corporation, including the WBTC employees. Later, in 2001, the scheme for government employees was revised to allow three CAS increments over twenty-five years, replacing the 1990 scheme. The legal issue is whether employees of state corporations are entitled to 3 CAS increments under the 2001?
Analysis
In Chandeshwar Singh v State of West Bengal the court ruled in favour of extending the 2001 scheme to WBTC employees i.e., state corporation employees. The court reasoned that the 2001 memorandum replaced the 1990 scheme and, since the 2000 memorandum was merely an extension of the 1990 scheme, it too became invalid. As a result, CAS policies prepared by WBTC, which followed the 2001 memorandum, were considered valid.
However, the reasoning of the court fails to take into account the statutory language of 2001 memorandum. Paragraph 5 of the memorandum contains a saving clause, which states that the 1990 rules would continue to apply, unless they contradict the 2001 memorandum. Saving clauses are generally used to preserve older laws in effect when new rules do not fully replace them. By disregarding this clause, the court treated the 1990 memorandum as fully repealed, instead of giving effect to both memoranda. Courts are expected to apply the doctrine of harmonious construction in such situations. This doctrine directs that laws and provisions should be interpreted in a way that allows each to have legal effect and avoids unnecessary nullification of other provisions. A proper approach would have brought together the 1990 and 2001 memoranda, applying 1990 rules where possible, instead of assuming they no longer applied.
The erred interpretation also affected the application of 2000 memorandum. The court reasoned that because it was an extension of the 1990 scheme, it too became nullified once the 1990 scheme was considered null. This is based on the principle that the stream cannot rise above its source. Even if one assumes that the 2000 memorandum had also been nullified, the extension of the 2001 scheme to the state corporation employees still lacks proper justification. The 2001 memorandum only uses the term ‘government employees,’ and not corporate employees. If the government had intended to cover corporation employees under the same framework as government employees, it would not have needed to issue the 2000 memorandum separately to extend CAS benefits to them. The omission in 2001 memorandum is therefore deliberate. Therefore, the court improperly extended the benefits under 2001 memorandum to the corporation employees. The courts cannot step in to fill such gaps by rewriting the language of a policy. Making laws or extending benefits where the legislature has chosen not to is beyond the judicial role. The principle of judicial restraint requires judges to interpret statutes and policies according to the intention of their drafters rather than creating new schemes through interpretation.
One argument put forth was that few people got the benefit of 3rd CAS and that others should also be given the benefit of the scheme. However, the bench didn’t respond to this particular argument. The argument is liable to be rejected as right to equality does not extend to ‘negative equality.’ In simple words, past administrative errors or unevenly given benefits cannot force the state to confer similar advantages unless authorised by law. This is based on the principle that the state is not bound by earlier errors or discretionary acts done beyond its statutory powers.
Therefore, extending benefits to employees of state corporations might be a step driven by good intentions, but it is not a sound approach.
Way Forward
The disputes over CAS for corporation employees highlight a deeper problem: corporations are meant to be autonomous, yet their service conditions are often drawn from the government memorandums. Treating state corporations exactly like government departments diminishes their autonomy, but treating them as wholly private would deprive employees of essential protections available to their counterparts in purely government services.
The legislature could consider setting statutory minimums, such as ensuring that corporation employees are not placed in a worse position than their counterparts in government service. These minimum assurances would serve as safeguards against discrimination, but at the same time, corporations would continue to have space to modify rules according to their operational needs.
In the absence of clear rules, judicial decisions risk turning into policymaking. While courts may set standards of fairness, it is the government that is responsible for framing service rules, since corporations can frame policies only within the limits set by government directives.
Simran Sindhu is student of B.A. LL.B. (Hons.) at the National Academy of Legal Studies and Research (NALSAR), Hyderabad.
NUALS Law Journal 