According to the Supreme Court, State and public employers are obliged to revise wages for their employees periodically, considering the adverse effects of price hikes and increase in cost of living.
As per the bench consisting of justices Aniruddha Bose and S. Ravindra Bhat, if wages are revised periodically, public servants will not feel the need to earn from other sources and steer clear of trying to accept bribes, inducements or other incentives while performing their duties.
Inflation leads to a dip in real wages. According to the bench, periodic pay revision is in the overall interest of the public and is a good way to reduce the negative impact of price rise / inflation.
The Court said that the obligation of revising wages should, hence, be discharged by public and State employers.
Article 43 of the Indian Constitution states that it is the State’s obligation to ensure that all workers, regardless of whether they are industrial or not, should be given a living wage and should enjoy a decent standard of living. Therefore, it is essential to come up with ways to “neutralise” price hike through means such as dearness allowance (DA).
However, there is no fixed or method to decide on the extent of such pay revisions or when they should be carried out. The objective of periodic revisions in pay is to allow the income of workers to stay abreast with the rising cost of living, so that they do not suffer from inflation. This will also ensure that the faith in public employment is maintained and the workers remain loyal.
The Court went on to allow the appeal filed by the Maharashtra State Financial Corporation Ex-Employees Association and others against the state government’s denial of the benefit of revision of pay scales, as recommended by the Fifth Pay Commission, to the employees of the Maharashtra State Financial Corporation who had either retired or expired between 1 January, 2006 and 29 March, 2010.
The legal heirs/representatives of those who died during that period, shall receive arrears basis pay revision, accepted by the Corporation. The Corporation is asked to pay interest at the rate of eight per cent p.a. on these arrears from January 2010 till the date of this judgment. It has been directed that the amount be paid within eight weeks.