Grant of Notional Increment for Retired Central Government Employees: Detailed Guidelines Issued

The Ministry of Personnel, Public Grievances & Pensions, Department of Personnel & Training (DoPT) has released an office memorandum on 14th October 2024. This memorandum details the grant of notional increments on 1st July or 1st January for Central Government employees who retired on 30th June or 31st December, respectively, for pensionary benefits. This decision follows various court rulings and employee demands for clarity on pension calculations.

Background

In 2006, the uniform 1st July date for annual increments was introduced under Rule 10 of the Central Civil Services (Revised Pay) Rules, 2006. In 2016, this rule was amended to allow two possible dates for annual increments: 1st January and 1st July.

In 2017, the Hon’ble High Court of Madras ruled in favor of Shri P. Ayyamperumal, granting him a notional increment to calculate pension benefits. Although this ruling applied only to Shri Ayyamperumal, it led to many similar petitions from other retirees, resulting in multiple cases in tribunals, high courts, and the Hon’ble Supreme Court.

Court Proceedings and Supreme Court Directions

The DoPT reviewed the issue with nodal authorities, considering Fundamental Rules (FRs) that govern increments. Key points include:

• FR 9(21)(a) defines “pay” as the sanctioned amount for a post.
• FR 17 states that employees receive pay and increments from the date of assuming duties.
• FR 24 allows withholding an increment if work or conduct is unsatisfactory.

The Hon’ble Supreme Court, in its order dated 11th April 2023, upheld the granting of notional increments for pension calculations to employees who retired with good conduct. Later, the Supreme Court Order dated 19th May 2023 dismissed an appeal by the Ministry of Railways, reinforcing the earlier decision.

Recent Developments

On 6th September 2024, the Supreme Court issued interim orders to address ongoing confusion:

• Effective Date: The 11th April 2023 judgement applies to third-party employees from 1st May 2023 onward. No enhanced pensions will be paid for the period before 30th April 2023.
• Successful Petitioners: Employees who filed successful petitions will receive an enhanced pension.
• Pending Appeals: The directive does not apply if the judgement is still under appeal.
• Intervention Applications: Retired employees with pending applications will receive enhanced pensions from the month of application.

These interim orders remain in effect until further directions. Employees who have already received enhanced pensions will not be affected.

Implementation Guidelines

The DoPT, along with the Department of Expenditure and Department of Legal Affairs, advised that notional increments on 1st July or 1st January may be granted for pension calculation purposes only, not for other pensionary benefits.

These instructions comply with the Interim Orders of the Supreme Court dated 6th September 2024 and are subject to the outcome of the Review Petition (Dy. No. 36418/2024), expected to be heard in November 2024.

Compliance and Key Takeaways

The DoPT has forwarded the memorandum to all relevant Ministries/Departments for necessary action. Copies were also sent to key offices, including the Supreme Court of India, Ministry of Finance, and National Council of JCM (Staff Side).

• Notional Increment Dates: Eligible employees retired on 30th June or 31st December will receive a notional increment on 1st July or 1st January.
• Pension Calculation Only: The increment is for pension calculation purposes only.
• Eligibility Criteria: Employees must have completed qualifying service with satisfactory conduct.

Conclusion

This office memorandum aims to address demands for notional increments for pension calculations for retired employees. While subject to judicial scrutiny, these directions provide immediate relief for eligible retirees. The outcome of the Review Petition could further impact entitlements.