Supreme Court Upholds Employee’s Date of Birth in VRS Dispute: Shankar Lal vs Hindustan Copper Ltd (20 April 2022)

Introduction

Date of the Judgment: 20 April 2022
Citation: (2022) INSC 419
Judges: Dr. Dhananjaya Y. Chandrachud, J. and Aniruddha Bose, J. (authored the judgment).
Can an employer unilaterally alter an employee’s date of birth for the purpose of calculating retirement benefits, especially when the employee’s service book reflects a different date? The Supreme Court of India recently addressed this critical question in a case involving a dispute over Voluntary Retirement Scheme (VRS) benefits. The core issue revolved around whether the employer could change the employee’s date of birth based on an initial entry in a statutory form, despite the service book and other records reflecting a different date. This judgment clarifies the importance of maintaining consistent service records and the rights of employees in such disputes.

Case Background

The appellant, Shankar Lal, was an employee of Hindustan Copper Ltd. He applied for and was granted benefits under a Voluntary Retirement Scheme (VRS). The dispute arose when the employer, Hindustan Copper Ltd., calculated his benefits based on a date of birth of 21st September 1945, which was recorded in Form “B” at the time of his joining the organization in 1971. However, Shankar Lal claimed his actual date of birth was 21st September 1949, as recorded in his service book, which was opened in 1975. This discrepancy significantly affected his VRS benefits, as the benefits were calculated based on the remaining service tenure. The appellant contended that he only became aware of the change in his date of birth after being relieved from service. The employer maintained that the date of birth in Form “B” was correct and that the service book entry was an error.

Timeline:

Course of Proceedings

Shankar Lal initially filed a writ petition in the High Court of Judicature for Rajasthan at Jaipur, which was disposed of with a direction to make a fresh representation to the employer. The employer rejected this representation, leading to another writ petition that was dismissed by a Single Judge of the High Court. An appeal to the Division Bench of the High Court also failed, with the court primarily relying on the entry in Form “B”. The High Court held that the entries in the statutory Form ‘B’ register had a presumption of correctness and that the employee had not challenged them within the stipulated time. The Division Bench also noted that the employee had accepted the VRS benefits before raising the dispute. The employee then appealed to the Supreme Court.

Legal Framework

The case primarily revolves around the interpretation of the employer’s Standing Orders and the Mines Act, 1952. Clause 5 of the Standing Orders states that for mining workmen, the declaration of age in the ‘B’ Form Register as per the Mines Act/Rules may be relied upon, subject to confirmation by the Company’s Medical Officer. The Mines Act, 1952 requires the maintenance of Form “B” which records the age of the employees. The Department of Public Enterprises (DPE) guidelines, dated 9th February 2001, state that the date of birth declared by an employee and accepted by the appropriate authority should not be altered unless represented against with adequate proof/justification within 5 years of joining the service.

Arguments

Appellant’s Arguments:

• The appellant argued that his date of birth was 21st September 1949, as recorded in his service book, which was opened in 1975.
• He relied on a Life Insurance Corporation (LIC) policy from May 1980, which also showed his date of birth as 21st September 1949.
• Pay slips from August 1994 and August 2001, which carried the message “Happy Birthday ***20.09.1949***”, were also presented as evidence.
• The appellant also relied on the fact that the computation sheet of his estimated VRS benefits reflected his date of birth as 21st September 1949.
• The appellant contended that the employer unilaterally changed his date of birth to 21st September 1945 without any prior notice or hearing.
• He also argued that the committee constituted by the employer had recommended his date of birth as 21st September 1949.
• The appellant submitted that the entries in Form “B” were not made by him and that he was not aware of the same.

Respondent’s Arguments:

• The respondent argued that the appellant had declared his age as 26 years at the time of joining, which was reflected in Form “B”, making his date of birth 21st September 1945.
• The employer submitted that a medical practitioner had also assessed the appellant’s age to be around 25 years at the time of joining, which would make his year of birth closer to 1945.
• The employer contended that the entry of 21st September 1949 in the service book was a mistake, and the correct date of birth was 21st September 1945 as per Form “B”.
• The employer relied on Clause 5 of the Standing Order, which gives preference to the ‘B’ Form for determining the age of mining workmen.
• The employer also argued that the appellant had not raised any objection to his date of birth until after receiving his VRS benefits.
• The employer relied on the Department of Public Enterprises (DPE) guidelines, which state that the date of birth declared by an employee and accepted by the appropriate authority shall not be altered unless the same is represented against with adequate proof/justification within 5 years of joining the service.

Issues Framed by the Supreme Court

The Supreme Court did not explicitly frame specific issues but addressed the core question of whether the employer was justified in altering the employee’s date of birth for calculating VRS benefits based on the entry in Form “B”, despite the service book and other records reflecting a different date. The sub-issue was whether the employer could unilaterally alter the records without giving the employee a hearing.

Treatment of the Issue by the Court

The following table demonstrates as to how the Court decided the issues

Authorities

The Court considered the following authorities:

Judgment

How each submission made by the Parties was treated by the Court?

How each authority was viewed by the Court?

• The Court held that while Clause 5 of the Standing Orders allows reliance on Form “B”, it does not make it conclusive proof of age.
• The Court acknowledged that Form “B” is a statutory form under the Mines Act, 1952, but clarified that entries in it are not conclusive proof of age.
• The Court noted that the employer did not adhere to the DPE guidelines, which require any challenge to the date of birth to be made within five years of joining service.

What weighed in the mind of the Court?

The Court’s decision was heavily influenced by the following factors:

• Consistency of Records: The service book, LIC policy, and pay slips consistently reflected the appellant’s date of birth as 21st September 1949. This consistency weighed heavily against the employer’s claim that the service book entry was a mistake.
• Unilateral Action: The employer unilaterally altered the appellant’s date of birth without giving him a hearing, which violated principles of natural justice.
• Employer’s Conduct: The employer had acted on the basis of the service book entry for a long time and could not suddenly change the date of birth at the fag end of the employee’s career.
• Evidentiary Value of Form “B”: The Court clarified that while Form “B” has probative value, it is not conclusive proof of age.
• Committee Recommendation: The committee constituted by the employer had recommended the appellant’s date of birth as 21st September 1949, which was ignored by the employer.

Sentiment Analysis of Reasons Given by the Supreme Court:

Fact:Law Ratio

Logical Reasoning:

The Court found that the employer’s action was not in accordance with the law. The employer had unilaterally altered the date of birth without giving the employee a hearing. The Court also noted that the employer had acted on the basis of the service book entry for a long time and could not suddenly change the date of birth at the fag end of the employee’s career. The Court also emphasized that while Form “B” has probative value, it is not conclusive proof of age. The Court set aside the judgment of the Division Bench and directed the employer to extend the VRS benefits to the appellant treating his date of birth as 21st September 1949. The differential amount was to carry simple interest at the rate of seven percent (7%) per annum.

Key Takeaways

• Employers cannot unilaterally alter an employee’s date of birth for the purpose of calculating retirement benefits, especially when the service book and other records reflect a different date.
• Entries in statutory forms like Form “B” are not conclusive proof of age and must be considered along with other relevant documents.
• Employers must adhere to the principles of natural justice and provide a hearing to the employee before making any changes to their service records.
• The burden of proof lies on the employer to justify any alteration of the date of birth, especially when the service book reflects a different date.
• The judgment reinforces the importance of maintaining consistent service records and the rights of employees in such disputes.
• This case also highlights the importance of considering the recommendations of internal committees constituted to address such issues.

Directions

The Supreme Court directed the respondents to extend the benefits of VRS to the appellant treating his date of birth as 21st September 1949. The differential amount was to carry simple interest at the rate of seven percent (7%) per annum from 3rd October 2002, till the date of actual payment.

Development of Law

The ratio decidendi of this case is that employers cannot unilaterally alter an employee’s date of birth for the purpose of calculating retirement benefits, especially when the service book and other records reflect a different date. This judgment clarifies that while Form “B” has probative value, it is not conclusive proof of age. The Court has also emphasized that employers must adhere to the principles of natural justice and provide a hearing to the employee before making any changes to their service records. This judgment reinforces the importance of maintaining consistent service records and the rights of employees in such disputes. There is no change in the previous position of law, but the judgment clarifies the evidentiary value of Form “B” and the importance of following the principles of natural justice.

Conclusion

The Supreme Court’s judgment in Shankar Lal vs Hindustan Copper Ltd. & Ors. underscores the importance of maintaining consistent service records and adhering to principles of natural justice in employment matters. The Court held that the employer could not unilaterally alter the employee’s date of birth based on the entry in Form “B” when the service book and other records reflected a different date. This decision protects employees from arbitrary changes to their service records and ensures that their retirement benefits are calculated accurately. The Court’s emphasis on the evidentiary value of service records and the need for a hearing before any changes are made sets a precedent for future cases involving similar disputes.