Central Government Employees: Salary, Dearness Allowance on contractual appointment after retirement–Check details

By: |
Updated: Aug 20, 2020 1:06 PM

The need was felt to regulate salary in cases of contract appointment of retired Central Government employees on an uniform basis.

 Central Government Employees, Salary, Dearness Allowance, contract, retired, rules, guidelines, training, appointmentPresently there are no uniform guidelines for the regulation of salary for such contractual appointees.

The different ministries and departments of the government appoint retired Central Government employees on a contract basis, including as Consultants, as and when required. However, presently there are no uniform guidelines for the regulation of salary for such contractual appointees.

The Department of Expenditure of the Ministry of Finance has issued a draft Office Memorandum (OM) prescribing guidelines for the regulation of pay of such contractual appointees. The O.M. refers to the regulation of remuneration in case of contract appointment of retired Central Government employees after it was felt that there is a need to have uniformity to regulate the salary of such contractual appointees.

The existing instructions of the Department of Personnel and Training, as contained in their Central Civil Services (Fixation of Salary of employed Pensioners) Orders, 1986, as amended from time to time, provide for the regulation of salary in case of re-employment.

However, the instructions of Department of Personnel & Training as contained in their OM No. 26012/6/2002- Estt (A) dated 9.12.2002 provides that re-employment beyond the age of superannuation of 60 years shall not be permissible.

Also, as per their OM No. 3(3)/ 2016-Estt (Pay II) dated 1.5.2017, the pay plus gross pension on re-employment is not to exceed Rs.2,25,000 i .e., Pay Level 17 as applicable to an office of the level of Secretary to the Government of India.

Department of Personnel & Training has also informed that the instructions on pay fixation in case of re-employment apply only to persons appointed on re-employment, other than those employed on a contract basis, except where the contract provides otherwise.

Accordingly, in cases of appointment of retired Central Government employees after the age of superannuation at 60 years on contact basis, the instructions on pay fixation on re-employment will not directly apply.

In view of this, there is a need to regulate salary in such cases of contract appointment of retired Central Government employees on a uniform basis. The matter has, therefore, been considered and it has been decided that regulation of salary in case of appointment of retired Central Government employees on a contract basis, including as consultants, shall be regulated as provided hereinafter.

(A) Cases where contract appointment is made on nomination basis

Such cases will cover the appointment of a retired Central Government employee on contract basis, including as Consultants, by way of nomination based on the credentials of the past service and not through open market advertisement.

At the outset, such appointments shall be not be made as a matter of practice and must be kept at a bare minimum. Such appointments may be made only in the justified exigencies of the official work where public interest is served by the appointment of the retired employee. While making such appointments, adequate functional necessity with clear grounds must be placed before the appointing authority.

Salary

A fixed monthly amount shall be admissible, arrived at by deducting the basic pension from the salary drawn at the time of retirement. It shall be termed as “salary”. The amount of salary so fixed shall remain unchanged for the term of the contract.

Example: An employee retired in the Pay Level 13 and the pay at the time of retirement was Rs. 1,55,900. Thus, the basic pension will be Rs. 77,950. f the employee is appointed on contract basis, including as Consultant, the “salary” shall be fixed at Rs.77, 950 ( 1,55,900-77950).

The basic pension to be deducted from the last salary drawn shall be the pension as fixed at the time of retirement and as such, if the employee has availed of the commutation of pension, the commuted portion of pension shall also be included in the portion of pension to be deducted. Thus, in the above example, if 40% of pension was commuted, the commuted portion shall be Rs. 31,180 ( 40% of 77,950) and the pension actually drawn shall be Rs. 46,770.

However, the amount of pension to be deduced from the last salary shall be Rs. 77,950.

No increment and Dearness Allowance shall be allowed during the term of the contract.

House Rent Allowance

No HRA shall ordinarily be admissible, except in those case where a special dispensation is allowed by the Appointments Committee of the Cabinet. Further, no HRA shall be admissible in case the appointee has a house either in self-name or the name of spouse at the place of appointment. Also, if the retired employee is retaining the Government accommodation after retirement as per the Rules of Directorate of Estate, the HRA shall be admissible only from the date of vacation of the Government accommodation.

Transport Allowance

An appropriate and fixed amount as Transport Allowance for the purpose of commuting between the residence and the place of work shall be allowed not exceeding the rate applicable to the appointee at the time of retirement. The amount so fixed shall remain unchanged during the term of appointment.

Leave of absence

Paid leave of absence may be allowed at the rate of 1.5 days for each completed month of service.

Term of Appointment

The term of appointment shall ordinarily be for an initial period not exceeding one year. It may be extendable up to an age two years more than the age of superannuation of the concerned employee. Beyond two years after the age of superannuation where adequate justification exists, the term may be extended based on a review of the task and the performance of the contract appointee, provided in no case shall it be extended beyond the age 5 years more than the age of superannuation.

(B) Cases where contract appointment is made on open market basis

In cases where the appointment of retired employees is made from open market under GFR 179 to 196, then the remuneration may be regulated as per the terms and conditions of the contract and in such cases, there will be no need to deduct pension. The terms of the appointment and the age up to which the appointment can be made shall also be as per the terms of the contract, provided the term of appointment shall not ordinarily go beyond 5 years after the age of superannuation of the appointee.

These orders shall apply to appointments made in the Central Government and shall be effective from the date of issue of the orders. The past cases shall not be reopened in the light of these orders until the normal term of those past cases.

Get live Stock Prices from BSE, NSE, US Market and latest NAV, portfolio of Mutual Funds, calculate your tax by Income Tax Calculator, know market’s Top Gainers, Top Losers & Best Equity Funds. Like us on Facebook and follow us on Twitter.

Financial Express is now on Telegram. Click here to join our channel and stay updated with the latest Biz news and updates.

Next Stories
1Small Savings Scheme interest rate: Govt retains rates for December quarter, eyes big mop-up
2Insurers receive Covid-19 claims of over Rs 4,880 crore
3Principal Asset Management’s Principal Large Cap Fund NFO open till October 12; check features