Government approves Notional Increments for Retired Central Government Employees, Check Guidelines here [PDF]

The Ministry of Personnel, Public Grievances & Pensions, Department of Personnel & Training (DoPT), issued an office memorandum on October 14, 2024, outlining the grant of notional increments for Central Government employees who retired on June 30 or December 31. This provision allows for a notional increment on July 1 or January 1 for pensionary benefits. The decision follows various court rulings and demands from employees seeking clarity on pension calculations.

Background

The uniform date of July 1 for annual increments was introduced in 2006 under Rule 10 of the Central Civil Services (Revised Pay) Rules, 2006. This rule was amended in 2016, providing two possible increment dates: January 1 and July 1.

In 2017, the Hon’ble Madras High Court ruled in favor of Shri P. Ayyamperumal, granting him a notional increment for pension calculation purposes. Although this ruling applied specifically to Shri Ayyamperumal, it triggered numerous petitions from other retirees seeking similar benefits. These petitions led to a series of cases in various courts, culminating in a review by the Supreme Court.

Court Proceedings and Supreme Court Rulings

The DoPT, after consulting with nodal authorities, considered key points from the Fundamental Rules (FRs) governing increments:

• FR 9(21)(a) defines “pay” as the sanctioned amount for a specific post.
• FR 17 specifies that employees are entitled to pay and increments from the date they assume duties.
• FR 24 allows withholding increments if work or conduct is unsatisfactory.

On April 11, 2023, the Supreme Court upheld the decision to grant notional increments for pension calculations to employees who retired with satisfactory conduct. Subsequently, an appeal by the Ministry of Railways was dismissed on May 19, 2023, further reinforcing this decision.

Recent Developments

On September 6, 2024, the Supreme Court issued interim orders to clarify the situation regarding ongoing confusion:

• Effective Date: The April 11, 2023 judgment applies to employees from May 1, 2023, onwards, and no enhanced pension will be paid for the period before April 30, 2023.
• Successful Petitioners: Employees who won their petitions will receive enhanced pensions.
• Pending Appeals: The judgment does not apply to cases under appeal.
• Intervention Applications: Retired employees with pending applications will receive enhanced pensions from the date of their application.

These interim orders will remain in place until further directions, and employees who have already received enhanced pensions will not be affected.

Implementation Guidelines

The DoPT, in consultation with the Department of Expenditure and the Department of Legal Affairs, has stated that notional increments on July 1 or January 1 may be granted solely for the purpose of pension calculation. These increments will not apply to other pensionary benefits.

This directive follows the Supreme Court’s interim orders dated September 6, 2024, and is subject to the outcome of the Review Petition (Dy. No. 36418/2024), which is scheduled for hearing in November 2024.

Key Takeaways and Compliance

The DoPT has circulated this memorandum to all relevant Ministries and Departments, instructing them to take the necessary actions. Copies have also been forwarded to key offices, including the Supreme Court of India, the Ministry of Finance, and the National Council of JCM (Staff Side).

• Notional Increment Dates: Employees who retired on June 30 or December 31 will receive a notional increment on July 1 or January 1 for pension calculations.
• Pension Calculation Only: The increment applies solely to pension calculations and not other benefits.
• Eligibility: Employees must have completed the required service period with satisfactory conduct.

Conclusion

This office memorandum addresses long-standing demands for notional increments in pension calculations for retired Central Government employees. While the directives offer immediate relief, the final outcome depends on the Supreme Court’s review of the pending petition, which may further influence pension entitlements.

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