Retrospective pay reduction without notice violates natural justice where civil consequences and financial loss follow.

Retrospective reduction of an employee's basic pay, after the pay had remained fixed for about two decades, was held unsustainable because it was made without prior notice or any opportunity to be heard. The action involved civil consequences and substantial financial loss, so the principles of natural justice and fair play required a show-cause opportunity before any downward refixation. The Tribunal's approval of the reduction was therefore erroneous, and the employee succeeded.

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Issues: Whether the reduction of the appellant's basic pay with retrospective effect, without prior notice or opportunity of hearing, was sustainable.

Analysis: The appellant's pay had been fixed and continued for about two decades before being refixed downward retrospectively. The order was passed without putting the appellant on notice or giving him any opportunity to show cause, even though the reduction entailed civil consequences and substantial financial loss. Such action offended the principles of natural justice and the requirement of fair play.

Conclusion: The retrospective reduction of pay was unsustainable and the Tribunal erred in upholding it. The appellant succeeded.

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