No Pay Cut Without a Chance to Argue: Supreme Court Sides with Ex-Navy Personnel Against Bank
The Supreme Court held that pay fixation of re-employed ex-servicemen is governed solely by government guidelines, which banks cannot override. It ruled that reducing pay without providing an opportunity of hearing violates principles of natural justice, rendering such an administrative action legally unsustainable.
Facts Of The Case:
After retiring from the Indian Navy, the appellants were re-employed by Punjab National Bank between 2015-2017 as Single Window Operators. Their initial pay was fixed at a higher amount, with four appellants receiving ₹40,710 and one receiving ₹34,160. However, following a 2018 clarification from the Indian Banks' Association (IBA) that capped the maximum basic pay for ex-servicemen at ₹31,540, the bank issued a circular and subsequently reduced the appella...