Supreme Court modifies order, asks LIC to pay 50% of back wages to grade III, IV part-time workers

The Supreme Court modified its earlier order on Tuesday of giving full back wages to temporary LIC employees of grade III and IV, who were asked to be regularised and directed the insurance company to pay 50% of the back wages with consequential benefits considering the "immense financial burden". A bench of Justices V Gopala Gowda and C Nagappan asked Life Insurance Corporation (LIC) which has filed a review plea on the issue of compliance with the direction, to reply within eight weeks as the workers concerned have been litigating for the past 25 years in various forums.

"Keeping in mind the immense financial burden this would cause to LIC, we deem it fit to modify the relief only with regard to the back wages payable and, therefore, we award 50% of the back wages with consequential benefits. "The back wages must be calculated on the basis of the gross salary of the workmen, applicable as on the date as per the periodical revisions of pay scale," the bench said while disposing of the review petition filed by the insurance company.

The workers in the branches of LIC at various places in the country, have sought their absorption as regular and permanent service employees in their respective posts of the corporation. They were working as "temporary, 'badli' and part-time workers" and have claimed that they had been appointed by the corporation management on daily wage basis against leave and other vacancies of its employees in Class III and IV posts in various branch offices and divisions of the company.

The court said that the computation of back wages must be made from the date of entitlement of the workmen for their absorption, till the age of superannuation. It said that ordinarily, the aspect of financial burden cannot be a sufficient ground to warrant the court's interference in review petition. "While ordinarily, the aspect of financial hardship would not be a sufficient ground to warrant our interference in the instant case, but keeping in view the fact that LIC is a statutory corporation operating in the interest of the public at large, on the limited point of payment of full back wages to the temporary and badli workers who are entitled for regularisation, we may reconsider the same," the bench said.

The apex court said that LIC has not submitted anything on record to suggest that its judgement of last year suffers from any error in law and mere repetition of arguments is not sufficient to justify the exercise of review jurisdiction of the court. Attorney General Mukul Rohatgi, appearing for LIC, has said that the corporation till March 31, 2015 had 55,427 Class III employees and 5,190 Class IV employees. He had said that if LIC is directed to consider the absorption of the workmen, then the number of Class III employees will increase by 11.14% and Class IV employees by 56.65% and the same will affect the employee's ratio apart from increase in its financial burden.

Rohatgi had said that under the provisions of the LIC Act, the Centre does not allocate any fund for the insurance company, and the funds are generated from the payments made to it and that the Centre does not contribute towards the funding of LIC. He had said that under the LIC Act, 95% of the surplus of corporation is to be allocated to or reserved for its life insurance policy holders and the contention that the corporation has a huge surplus and is in a position to implement the order of this court, was misconceived.

The apex court had last year directed LIC to absorb the workmen concerned in the permanent posts and said it was liable to pay all consequential benefits, including monetary benefits.