The Allahabad High Court has recently passed a crucial judgement in employee transfers based on seniority. The Court emphasised that while employee transfers within a company are permissible, they must be conducted without compromising the employees’ seniority or altering their original positions.
The case involves employees from Purvanchal Vidyut Vitaran Nigam, an electricity distribution company (DISCOM) based in Varanasi, who challenged their transfers to different zones. The employees argued that the transfer policy from 2019-2020 was outdated and no longer valid. They claimed that their transfers, which were based on this old policy and extended by a circular issued on 22 July, 2023, had no legal authority. They further argued that according to the UP Electricity Reforms Transfer Scheme, 2000, there should be specific rules governing employee transfers; otherwise, the existing UP State Electricity Board Rules should apply.
Additionally, the employees claimed that the recent transfer orders were unfair because they caused them to lose their seniority. They also argued that the transfers were arbitrary and not based on any real administrative need or public interest.
Upon reviewing the case, the court noted that numerous transfer orders were issued without clearly specifying the new posts for the employees. Employees were only informed of their specific roles once they reported to the new zonal offices. Referring to prior judgments, including Ashutosh Kumar Singh v. Uttar Pradesh Power Corporation, the Court upheld that transfer policies issued by company directors could stand without statutory rules, and such policies could be governed by executive instructions alone.
The Court also highlighted that employees should be transferred to equivalent posts, such as from one chief engineer’s office to another, maintaining the same level of designation across different offices. It urged the UP Power Corporation to promptly establish necessary regulations to ensure a DISCOM-based cadre strength and seniority framework for its employees, emphasising the need for these regulations to be developed without delay.
The Court further clarified that under clause 6(10) of the UP State Electricity Reforms Transfer Scheme, 2000, the transferee company, in this case, the respondent corporation, possessed the authority to create service regulations. Since the company had not framed new rules, the existing conditions set by the board of directors were applicable to all employees, negating the need for statutory enforcement of the transfer policy.
However, the Court granted the petitioners the liberty to appeal to the relevant authorities and observed that transferred employees should not be demoted below their existing cadre.
