Termination can’t be backdated to deprive employee benefits, rules Punjab and Haryana High Court

Tribune News Service

Chandigarh, August 23

The Punjab and Haryana High Court has ruled that an employer cannot backdate the termination of an employee and deny benefits earned during his service.

The ruling came in a 25-year-old case involving a roadways employee retrospectively terminated from December 31, 1994. The order was based on the ground that the employee's date of birth should have been recorded as December 1936, instead of July 1938.

Justice Namit Kumar emphasised that termination could take place with immediate effect from the date the order was passed or from a future date specified in it. But backdating a termination order to an earlier date, as was done in the case, was not permissible and could not be used as a means to strip employees of their accrued benefits.

“The termination cannot be applied retroactively to an earlier date (backdated) which means that the employee’s benefits earned during their service cannot be taken away by making the termination effective before it actually happened. In essence, the employees’ rights and benefits accrued during their service are to be protected and the employer cannot retroactively deprive them of those benefits by backdating the termination,” Justice Kumar asserted.

The Bench was hearing a petition filed way back in 1999 against PRTC and other respondents by Bahadur Singh. The ruling is significant as it ensures the protection of an employee's rights and makes certain that the employers adhere to lawful procedures when ending employment relationships, reinforcing the principle that a worker’s entitlements cannot be retrospectively nullified.

Justice Kumar allowed the petition to the extent of setting aside the order dated June 8, 1995, insofar as it was applied retrospectively. The petitioner’s date of retirement was directed to be treated as June 8, 1995 when the impugned order was passed. He was also directed to be granted all consequential benefits from January 1, 1995, to June 8, 1995. For the purpose of grating benefits, the Bench set a three-month deadline.

The wait the employee faced in getting justice is not exceptional. The high court currently has no less than 4,33,625 cases pending, including 1,61,321 criminal matters involving life and liberty. No less than 18,352 or 4.23 per cent of the total cases are pending for 20 to 30 years. The situation is unlikely to improve in the coming months following a shortage of 30 judges. The high court currently has 55 judges as against the sanctioned strength of 85. Three more judges are retiring this year.