No Work, No Pay Rule: Here’s when the employer can deny payment – SC decision

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Updated: Nov 27, 2019 1:01 PM

No Pay, No Work Rule: Can an employee claim back wages upon reinstatement after absenting himself from work without authority?

No Work, No Pay RuleKnow what SC says about No Work, No Pay Rule. Representational image

No Pay, No Work Rule: Can an employee claim back wages upon reinstatement after absenting himself from work without authority? Or, Can he claim back wages upon reinstatement after the employer had restrained him from attending work? These questioned were answered by the Supreme Court in Chief Regional Manager, United India Insurance Company vs Siraj Uddin Khan judgement in July this year. The apex court held that the worker is not entitled to back wages upon reinstatement after he has absented himself from work without permission of the authority. However, in case the employer has restrained the worker, the principle of ‘No Work, No Pay’ would not apply when he is reinstated.

The case

Siraj Uddin Khan was appointed by United India Insurance Company on the post of assistant/typist. He was transferred on August 8, 2006 from Allahabad branch of the company to Jaunpur brach. He was relieved from Allahabad Branch on February 1, 2007 to join the Jaunpur Branch. However, Khan did not join the Jaunpur branch and remained unauthorisedly absent from duty for four months. The company conducted a disciplinary proceedings against Khan and ordered to reduce his basic pay by two steps in May 2009. However, Khan continued to remain absent from work until 2012, when the company terminated his services. Khan then challenged the company’s decision to remove him from bank in the Allahabad High Court, which set aside the order of the company on the ground of lapses in the disciplinary proceedings adopted by the company against Khan.

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The High Court also did not direct the company to pay back wages to Khan for the period of his absence from work. Following this, he filed a Writ Petition in the High Court, seeking direction to the company to pay him back wages from 2009 to 2012. The HC ordered the company to pay back wages to Khan along with interest at 18 per cent. The company challenged this order in the Supreme Court through an SLP.

What Supreme Court said

The apex court set aside the HC order. SC cited its judgement in Airports Authority of India and Others Vs. Shambhu Nath Das alias S.N. Das, (2008). In this case, the respondent had not joined after the end of his leave and claimed back wages. The apex court had ruled in this case that “there was no justification whatsoever to grant any back wages to the respondent on the general principle that nobody could be directed to claim wages for the period that he remained absent without leave or without justification.”

In another case, Shobha Ram Raturi Vs. Haryana Vidyut Prasaran Nigam Limited and Others, the apex court had held that the principle of ‘No work, No pay’ would not apply and the appellant was entitled to back wages as he was restrained from working by the employer.

The apex court said that in the present case, Khan was not kept away from work by any order of the company. The SC, hence, set aside the HC direction for providing back wages to Khan for the period after 14-05-2009 and 20-06-2012.

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