Karnataka High Court Dismisses Grasim's Plea Against Increase In Employees' Retirement Age To 60 Yrs

The Karnataka High Court at Dharwad has dismissed an intra-court appeal filed by the Management of M/S Grasim Industries, challenging a single judge bench order which upheld the modification of Certified Standing Order passed by the Labour Commissioner, that enhanced the retirement age of employees in private sector from 58 to 60 years. A division bench of Justice Krishna S Dixit and Justice P Krishna Bhat while dismissing the appeal said, "The Appellant is directed to continue the workmen in its service till they attain the age of 60 years in terms of amendment to Clause 29 of the Certified Standing Orders w.e.f. 17.03.2018." Further it directed the company to reinstate with continuity of service and full back wages such workmen who retired on or after 17th September, the day on which the writ petition was dismissed, if on medical examination they are not found to be unfit for reemployment. Such of the retirees falling under the preceding clause but on medical examination are found to be unfit for reemployment shall be paid only 50% of the Back Wages for the period between the date of their retirement and the date on which they are called for medical examination, it ordered. "The Appellant shall pay 50% of the Back Wages to such of the employees who retired from service on attaining the age of 58 years on or after 17.03.2018, for the period between the date of their retirement and the date on which they attained 60 years or the date of death, whichever is earlier. Moreover, the claim of any other employees who are otherwise entitled to the benefit of amended Clause 29 of Certified Standing Order but do not fit into any of the clauses hereinabove may approach the 2nd Respondent – Deputy Labour Commissioner and work out their grievances. The amount payable by way of Back Wages shall be paid within a period of 60 days and that the delay shall carry interest at the rate of 2% per mensem," it added. Background: The State Government amended Entry No. 15–A of Schedule I and thereby enhanced the age of retirement to 60 years by modifying the Model Standing Orders (hereinafter 'MSO') vide the Karnataka Industrial Employment Standing Orders (Amendment) Rules 2017 (hereinafter '2017 Amendment Rules') that came to be gazetted on 28.03.2017. The Resp. – Union vide representation dated 06.04.2017 had applied to the 2nd Resp.–Deputy Labour Commissioner (hereinafter 'DLC') for the modification of CSO by introducing 60 years in the place of 58, as the age of retirement in tune with 2017 Amendment Rules. The 2nd Respondent (Deputy Labour Commissioner) vide order dated 17.03.2018 certified the modification to Clause 29 of the CSO and thereby enhanced the age of retirement to 60 years consistent with the said Amendment. Court Findings: The bench firstly noted, "Ours is a constitutionally ordained Welfare State. The Statute under which the lis at hands has arisen enacts a 'labour welfare policy' consistent with the provisions of Part – III & Part - IV of the Constitution." Then it took into account the aspect of increased life expectancy and said, "It is admitted by the appellant that Clause 29 of the CSO prescribed 58 years as the age of retirement way back in the year 1971 and it continued even post 2017 Amendment Rules. It is pertinent to note that, during the said period, the Industrial Employment (Standing Orders) Central Rules 1946 had also not prescribed any age of retirement. The age of superannuation in any employment is prescribed mainly keeping in view the contemporary life expectancy of the working classes and their agility levels in general. What was true of the bygone era becomes untrue of the present, because of the march of time." It noted that the government has kept in view the marked increase in expectancy of life of people to 69.16 years in 2017 as against 54.69 in 1981 when 58 years was fixed as the age of retirement. The bench also noted that a challenge to the 2017 amendment to the state rules was challenged in the high court, it was dismissed and appeals against the order were allowed to be withdrawn. The court also junked the contention of the company that it would cause additional financial burden. The bench said, "We are conscious of the fact that because of elongation of service on account of enhanced age of retirement, the employer may have to shell out some additional amounts which he may otherwise save by recruiting fresh candidates; however, this is one of the inevitables in the realm of service & industry. This assumption again is on the premise that the 'principle of progressive pay scales/wage rates' does obtained in the establishment." It added, "It is blood & sweat of labour that produce goods & services. That is how wealth of the nation is generated; of course the investment of capital by the employer being a constitutive factor of the industry also cannot be discounted. The arguable...

Karnataka High Court Dismisses Grasim's Plea Against Increase In Employees' Retirement Age To 60 Yrs

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