Rescission of absorption rights and pensionary service credit depend on express saving clauses and enabling rules

The commentary explains that the rescission framework terminated the pending right of unabsorbed retrenched employees to seek absorption under the 1991 Rules, while preserving only the protections already attached to employees who had been absorbed, including pay protection. It also states that prior service in the erstwhile undertaking cannot be counted for pensionary benefits unless an enabling rule expressly authorises that benefit. The note emphasises that saved rights under a rescission provision cannot be expanded judicially, and that pensionary counting of earlier service requires a clear statutory basis.

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Issues: (i) Whether the right of retrenched employees to be considered for absorption under the 1991 Rules survived after the Rescission Rules, 2003 and the 2009 Act. (ii) Whether the service rendered in the erstwhile undertaking could be counted for pensionary benefits in the absence of an enabling rule.

Issue (i): Whether the right of retrenched employees to be considered for absorption under the 1991 Rules survived after the Rescission Rules, 2003 and the 2009 Act.

Analysis: The rescission framework was examined together with the saving clauses. The legal effect of Rule 3 of the 2003 Rules was that the right to be considered for absorption, if not already fructified by the date of commencement, stood terminated, while the benefit of pay protection for employees already absorbed was preserved. Section 3 of the 2009 Act carried the same scheme forward by deeming rescission from 9 May 1991, saving only those who had been absorbed in the interregnum and maintaining the ancillary protection already granted.

Conclusion: The right of unabsorbed retrenched employees to seek absorption did not survive, but the protections available to already absorbed employees remained intact. This issue was substantially in favour of the respondent only to the extent of consequential benefits for already absorbed employees.

Issue (ii): Whether the service rendered in the erstwhile undertaking could be counted for pensionary benefits in the absence of an enabling rule.

Analysis: The claim for inclusion of prior service was tested against the governing absorption rules. No provision in the 1991 Rules was shown to permit counting of service rendered in the former undertaking for pension. In the absence of a specific statutory basis, the Court declined to create such a benefit judicially.

Conclusion: The claim for counting prior service for pensionary benefits was rejected and this issue was decided in favour of the appellant.

Final Conclusion: The appeal succeeded only on the pensionary claim and otherwise the directions protecting absorbed employees were maintained, resulting in a partial allowance of the special appeal.

Ratio Decidendi: Where a rescission provision expressly terminates unabsorbed employees' pending right to absorption while saving completed absorptions and pay protection, the Court cannot enlarge the saved rights; and a service benefit such as pensionary counting of prior service cannot be granted without an enabling rule.

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