The Supreme Court has held that daily-wage skilled workers of the Gujarat Government who were treated as permanent employees under a 1988 Government Resolution cannot be denied the benefit of an annual increment merely because they originally entered service as daily wagers.
The judgment was delivered by a Bench comprising Justice Sanjay Kumar and Justice Sanjeev Sachdeva on October 6, 2026. The Court also directed the authorities to calculate the applicable benefits and release the amounts within 30 days.
The dispute concerned employees of the Gujarat State Irrigation Department who had rendered more than 30 years of service and retired on June 30 of different years. They claimed the increment that became due on July 1 immediately after their retirement.
A Single Judge of the Gujarat High Court had accepted their claim, relying on the Supreme Court's earlier decision in Director (Administration and Human Resources), KPTCL v. C.P. Mundinamani. The Single Judge had also directed payment of consequential pension and retirement benefits.
The State challenged that decision before a Division Bench. The Division Bench took the view that the workers, being daily wagers, were not entitled to an increment applicable to regular employees and consequently set aside the earlier order.
The Supreme Court examined the Government Resolution dated October 17, 1988. Under the Resolution, daily-wage skilled workers who had completed 10 years or more of service as on October 1, 1988 were to be considered permanent. They were entitled to the relevant pay scale, allowances and retiral benefits, including pension and gratuity.
Since the State did not dispute that the appellants fell within this category, the Court held that their status as daily wagers could not, by itself, defeat their claim to the increment.
The Court observed:
"If that be so, as they were treated as permanent employees for the purpose of payscale and allowances, pension, retirement benefits, etc., the contention advanced before the Division Bench of the High Court that they were not entitled to grant of the increment only on the ground that they were daily wagers cannot be countenanced."
The Supreme Court held that the appellants were covered by the modified clause (d) of its order dated February 20, 2025. Since their writ petition had been filed in 2022, they were entitled to enhanced pension by taking the additional increment into account for the period prescribed under that clause.
The Court directed the authorities to examine the individual retirement dates, calculate the amounts payable and release the dues within 30 days.
It further ordered that if the authorities failed to comply within that period, interest at 6% per annum would be payable from the date of default until payment.
"As we do not propose to go into the individual fact situation applicable to each of the appellants/proforma respondents, we leave it to the authorities to examine each of their cases in the context of the date of the retirement of each of them; work out the amounts payable to them, in the light of modified clause (d) of the order dated 20.02.2025; and release the amounts due within 30 days from today, failing which interest thereon @ 6% p.a. shall be paid for the period thereafter till the date of payment."
The appeal was accordingly allowed, with the parties directed to bear their own costs.
