In a landmark decision, the Supreme Court has ruled that once a government employee’s contractual position is regularized, the entire duration of their service, including the period spent in a contractual role, must be counted for pension purposes.
A bench of Justices PS Narasimha and Joymalya Bagchi upheld the rights of employees who were initially hired on a contract basis but later made permanent, stating that these workers are entitled to pension benefits covering their entire service, not just their time as regular employees.
The Court rejected the argument that the Central Civil Services (Pension) Rules, 1972, excluded such employees from pension benefits based on Rule 2(g), which previously applied to contract workers. Instead, it emphasized Rule 17, which mandates that once an employee is regularized, their full service history—including contract tenure—must be considered when calculating pension.
Citing the case of State of Himachal Pradesh & Ors. v. Sheela Devi, the Court clarified that Rule 17 was specifically designed to address situations where contract employees are later regularized, ensuring their previous contractual service is factored into pension calculations.
“The clear language of Rule 17, along with its interpretation in Sheela Devi, establishes that once employees are regularized, their contractual service period must be counted for pension,” the Court ruled.
In its final order, the Court directed the Union of India to promptly facilitate the pension process for the affected employees, ensuring they are informed about their options under Rule 17 and the payments required for pension eligibility.
