Source: Allahabad High Court 

Why in News? 

A bench of Justice Salil Kumar Rai held that an employee who has been fully exonerated from the charges and reinstated is entitled to full pay for the period he was out of service.      

• The Allahabad High Court held this in the case of Dinesh Prasad v. State of U.P. 

What is the Background of Dinesh Prasad v. The State of Uttar Pradesh Case? 

• The petitioner is a follower with the Uttar Pradesh Police. 
• Disciplinary proceedings were instituted against the petitioner under Rule 14 of the Uttar Pradesh Police Officers of the Subordinate Ranks (Punishment and Appeal) Rules 1991. 
• A chargesheet was issued against him alleging that there was unauthorized leave of 2 days. 
• In inquiry, petitioner was held guilty of all charges levelled against him and subsequently dismissed from service. 
• Petitioner filed an appeal against the termination order. The Appellate Authority exonerated the petitioner of charges levelled against and he was consequently reinstated in service. 
• A show cause notice was issued to him under Rule 73 of the Financial Handbook Volume II Part II to Part IV as to why his services for the period when he was out of service be not regularised without payment of salary on the principle of ‘no work no pay’. 
• The above was challenged before the High Court. 

What were the Court’s Observations? 

• The High Court held that an employee who has been fully exonerated of the charges against him and has been subsequently reinstated is entitled to full pay for the period he was out of service by virtue of Rule 54 of the Financial Hand Book Volume-II. 
• It was held that the only situation in which a pay to such employee can be denied is if he was in an employment for the period he was out of service, and was earning more or equivalent to the amount he is entitled to. 
• The Court observed that by virtue of Rule 54 (2) and 54 (3) of the Financial HandBook Volume II the petitioner is entitled to full pay and allowances for the period specified.  
• It is apparent that, on his reinstatement after the order of dismissal or removal is set aside, a government servant can not be denied his entire pay and allowances for the period he was out of service. 

What is the Principle of No Work, No Pay Service Rule? 

• The principle of No Work No Pay depicts that if the employee has not worked, he will not be paid. 
• This principle finds its genesis in several Indian legislations like the Industrial Disputes Act, 1947 (IDA) and the Payment of Wages Act, 1936 (PWA).  
• In the case of Rajendra Sharma v. State of Chhattisgarh (2021), the Chhattisgarh High Court held that this principle is based on “fundamental concept in law of contract of employment.” 
• The principle of ‘no work no pay’ has played a pivotal role in discouraging unauthorised absenteeism, disobedience, and non-performance of work by employees, and in minimising disruption to business operations. 
• It has evolved through judicial precedents and finds place in the service rules.  

What are the Important Case Laws on No Work No Pay Priniciple? 

• J.N. Shrivastava v. Union of India (2012) 
  • The principle of “no work no pay” is not applicable when the employee is ready and willing to work, but the employer prevents him from doing his duties (i.e. work). 
  • The said principle cannot be applied to a case in which an employee is kept away from duty or rendered ineligible by act or omission of the employer. 
• State of Himachal Pradesh v. Sita Devi (2020) 
  • The Himachal Pradesh High Court held that denial of maternity benefits to any woman, regardless of the status of her employment, would amount to a violation of the constitutional principles. 
  • Thus, Court held that maternity benefit is a part of fundamental right.  
• Chief Regional Manager, United India Insurance Company Limited v. Siraj Uddin Khan (2019) 
  • The Supreme Court in this case reiterated the the settled principle that nobody could be directed to claim wages for the period that he remained absent without leave or without justification.  
• Rashtriya Shramik Aghadi v. The State of Maharashtra (2020) 
  • The Aurangabad Bench of the Bombay High Court observed that during the time of the COVID-19 pandemic, the principle of “no work- no wages” cannot be made applicable by the employers. 
• Shobha Ram Raturi v. Haryana Vidyut Prasaran Nigam Limited (2016) 
  • The principle of ‘no work no pay’ could apply mostly in instances where employees have voluntarily and unauthorisedly absented themselves from work. 
  • Absence on account of statutory leaves or employer-sanctioned paid leaves are also a general exception to this principle.