Supreme Court Upholds Pay Parity for Ordnance Factory Employees: Union of India vs. D.G.O.F. Employees Association (2023)

Date of the Judgment: November 9, 2023
Citation: 2023 INSC 995
Judges: A.S. Bopanna, J., Pamidighantam Sri Narasimha, J.
Can employees in the headquarters of the Ordnance Factory Board (OFB) claim pay parity with those in the Central Secretariat Service (CSS) and similar organizations? The Supreme Court of India recently addressed this question, focusing on whether historical pay parity should be maintained. This case examines the nuances of pay scale determination and the principle of equal pay for equal work, particularly when dealing with different government departments. The judgment was delivered by a two-judge bench comprising Justice A.S. Bopanna and Justice Pamidighantam Sri Narasimha.

Case Background

The D.G.O.F. Employees Association, representing employees at the Ordnance Factory Board Headquarters, sought an upgrade in their pay scales to match those of Assistants and Personal Assistants in the Central Secretariat Service (CSS) and equivalent posts in the Armed Force Headquarters Civil Service (AFHCS) and other similar cadres. The Ministry of Defence rejected this demand on April 20, 2010, which was communicated to the association on June 7, 2010. Aggrieved, the association approached the Central Administrative Tribunal (CAT), which also denied their plea. Subsequently, the association filed a writ petition before the High Court of Delhi.

Timeline

Course of Proceedings

The Central Administrative Tribunal (CAT) initially rejected the employees’ plea for pay parity. The High Court of Delhi, however, overturned the CAT’s decision, ruling that the employees were entitled to the same pay scale as their counterparts in CSS/CSSS and other similar organizations. The High Court based its decision on the historical parity that existed between these employees and the recommendations of the Sixth Central Pay Commission (VIth CPC), specifically paragraph 3.1.9. The Union of India then appealed to the Supreme Court against this decision.

Legal Framework

The core of the dispute revolves around the interpretation of the Sixth Central Pay Commission (VIth CPC) recommendations, particularly paragraphs 3.1.9 and 3.1.14. Paragraph 3.1.9 recommends upgraded pay scales for Section Officers in all Secretariat Services, including CSS, and extends this to other Secretariat Offices with established parity with CSS/CSSS. It also specifies that this parity should extend to posts of Private Secretary/equivalent in these services. Paragraph 3.1.14, on the other hand, deals with pay scales in non-Secretariat organizations, recommending a merger of certain grades.

The High Court emphasized that paragraph 3.1.9 of the VIth CPC recommendations stated:

“Accordingly, the Commission recommends upgradation of the entry scale of Section Officers in all Secretariat Services (including CSS as well as non-participating ministries/departments/organizations) to Rs. 7500-12000 corresponding to the revised pay band PB 2 of Rs.8700-34800 along with grade pay of Rs.4800. Further, on par with the dispensation already available in CSS, the Section Officers in other Secretariat Offices, which have always had an established parity with CSS/CSSS, shall be extended the scale of Rs.8000-13500 in Group B corresponding to the revised pay band PB 2 of Rs.8700-34800 along with grade pay of Rs.4800 on completion of four years service in the lower grade. This will ensure full parity between all Secretariat Offices.”

The High Court also noted that the VIth CPC stated that:

“This scale shall be available only in such of those organizations/services which have had a historical parity with CSS/CSSS. Services like AFHQSS/AFHQSSS/RBSS and Ministerial/Secretarial posts in Ministries/Departments organizations like MEA, Ministry of Parliamentary Affairs, CVC, UPSC, etc. would therefore be covered.”

The High Court also referred to paragraph 3.1.14 of the VIth CPC recommendations which stated:

“In accordance with the principle established in the earlier paragraphs, parity between Field and Secretariat Offices is recommended. This will involve merger of few grades. In the Stenographers cadre, the posts of Stenographers Grade II and Grade I in the existing scales of Rs.4500-7000/Rs.5000-8000 and Rs.5500-9000 will, therefore, stand merged and be placed in the higher pay scale of Rs.6500-10500. In the case of ministerial post in non-Secretariat Offices, the posts of Head Clerks, Assistants, Office Superintendent and Administrative Officers Grade III in the respective pay scales of Rs.5000-8000, Rs.5500-9000 and Rs.6500-105000 will stand merged.”

Arguments

Appellant’s Arguments (Union of India):

• The appellants contended that judicial review in pay scale matters is limited unless there is arbitrariness or discrimination.
• They argued that paragraph 3.1.14 of the VIth CPC, which recommends replacement pay scales, should apply to the respondent’s employees, not paragraph 3.1.9.
• The appellants claimed that paragraph 3.1.9 does not extend extra benefits and does not specifically refer to employees of the OFB.
• They relied on the judgment in State of Punjab and others vs. Jagjit Singh and others (2017) 1 SCC 148, stating that there can be no comparison of pay scales between employees of different organizations even if they have a common employer.
• They also cited Union of India vs. Indian Navy Civilian Design Officers Association and Another (2023) SCC Online SC 173, arguing that courts should not evaluate jobs, which is a task for expert bodies like Pay Commissions.
• The appellants also relied on Union of India and Others vs. Manoj Kumar and Others Civil Appeal Nos.913-914 of 2021, wherein it was held that the Pay Commission’s recommendations should not be interfered with.

Respondent’s Arguments (D.G.O.F. Employees Association):

• The respondents argued that their members were historically treated as equals to CSS/CSSS employees and had enjoyed equal pay and benefits.
• They contended that paragraph 3.1.9 of the VIth CPC, which provides for parity, should apply to them.
• They relied on the judgment in Union of India vs. Dineshan K.K. (2008) 1 SCC 586, arguing that courts can intervene if employees are unjustly treated by arbitrary state action.
• They argued that the denial of parity was based on a misinterpretation of the Sixth CPC recommendations.
• The respondents highlighted that the historical parity between Assistants in OFB and CSS/CSSS was disrupted by an intervening upgrade of pay scales for Assistants in other organizations.
• They contended that the mention of specific departments in paragraph 3.1.9 was illustrative and not exhaustive, meant to encompass all organizations with historical parity.
• They also argued that OFB employees are part of a headquarters-based organization, as the Armed Forces Headquarters Service scheme was extended to the Directorate General Headquarters staff.

Submissions of Parties

Issues Framed by the Supreme Court

The Supreme Court did not explicitly frame issues in a separate section. However, the core issue before the Court was:

1. Whether the High Court was correct in concluding that paragraph 3.1.9 of the Sixth CPC applied to the employees of the Ordnance Factory Board Headquarters, entitling them to pay parity with employees of CSS/CSSS and other similar organizations.

Treatment of the Issue by the Court

Authorities

The Supreme Court considered the following authorities:

Judgment

How each authority was viewed by the Court?

The Court distinguished State of Punjab and others vs. Jagjit Singh and others [2017] 1 SCC 148, stating that it was not applicable as the present case did not involve a comparison between employees of different organizations. Similarly, Union of India vs. Indian Navy Civilian Design Officers Association and Another [2023] SCC Online SC 173 was distinguished as it was not a case of job evaluation but a matter of applying the correct pay scale. The Court relied on Union of India vs. Dineshan K.K. [2008] 1 SCC 586 to state that it can intervene if employees are unjustly treated by arbitrary state action. Also, the Court distinguished Union of India and Others vs. Manoj Kumar and Others Civil Appeal Nos.913-914 of 2021, stating that it dealt with the disparity between Secretariat and Field Officers, unlike the present case. The Court relied on All India Naval Clerks Association and Others vs. Union of India and Others in Civil Appeal arising out of Special Leave Petition (Civil) No.29204 of 2019 dated 27.07.2022 to state that the question of parity with regard to the pay scale to the Assistants in the lower formations in the Indian Navy with that of the Assistants in CSS was held as discriminatory and violative of Article 14 of the Constitution. The Court relied on Paragraph 3.1.9 of the Sixth Central Pay Commission (VIth CPC) to grant pay parity to the employees of the Ordnance Factory Board Headquarters and rejected the applicability of Paragraph 3.1.14 of the Sixth Central Pay Commission (VIth CPC), stating that it was meant for non-secretariat offices.

What weighed in the mind of the Court?

The Supreme Court’s decision was primarily influenced by the historical parity in pay scales between the employees of the Ordnance Factory Board Headquarters and their counterparts in the Central Secretariat Service (CSS) and other similar organizations. The Court emphasized that this parity had been maintained through successive Central Pay Commissions until the Sixth CPC recommendations. The Court also noted that the employees of the Ordnance Factory Board Headquarters were part of a headquarters-based organization, which made them eligible for the benefits under paragraph 3.1.9 of the Sixth CPC. The court rejected the argument that paragraph 3.1.14 should apply, as that provision was meant for non-secretariat offices. The Court’s reasoning was also influenced by the need to prevent discrimination and to ensure that similarly placed employees receive equal pay.

The Court’s reasoning was a combination of factual analysis (historical parity, nature of the organization) and legal interpretation (application of the Sixth CPC recommendations), with a slightly higher emphasis on the factual aspects.

Key Takeaways

• Employees of the Ordnance Factory Board Headquarters are entitled to the same pay scale as their counterparts in the Central Secretariat Service and other similar headquarters organizations.
• Historical parity in pay scales is a crucial factor in determining pay entitlements.
• The Sixth Central Pay Commission’s recommendations should be interpreted in a manner that prevents discrimination and ensures equal pay for similarly placed employees.
• The classification of an organization as headquarters-based or field-based is important in determining the applicability of specific pay provisions.

Directions

The Supreme Court dismissed the appeal filed by the Union of India, thereby upholding the High Court’s order. The employees of the Ordnance Factory Board Headquarters are entitled to the pay scales as granted by the High Court.

Development of Law

The ratio decidendi of this case is that employees of the Ordnance Factory Board Headquarters are entitled to the same pay scale as their counterparts in the Central Secretariat Service and other similar headquarters organizations, based on the historical parity in pay scales and the interpretation of paragraph 3.1.9 of the Sixth Central Pay Commission recommendations. This judgment reinforces the principle of equal pay for equal work and clarifies that historical parity should be maintained unless there is a valid reason to deviate from it. The Court’s decision also clarifies that the classification of an organization as headquarters-based or field-based is important in determining the applicability of specific pay provisions.

Conclusion

In conclusion, the Supreme Court dismissed the appeal by the Union of India, affirming the High Court’s decision to grant pay parity to the employees of the Ordnance Factory Board Headquarters. The Court emphasized the importance of historical parity and the need to prevent discrimination, ensuring that similarly placed employees receive equal pay. The judgment clarifies the interpretation of the Sixth Central Pay Commission’s recommendations and provides a precedent for future cases involving pay parity in government organizations.