"No Work No Pay" cannot be applied when employees are prevented from working due to an illegal amendment in service rules

Punjab and Haryana High Court Strikes Down Forced Retirement Rule, Orders Salary Arrears. Employees to Receive Full Benefits After Court Declares Amendment Ultra Vires

News Report: In a landmark judgment delivered by the Punjab and Haryana High Court on September 16, 2025, the Court has ordered the State of Punjab to compensate employees who were prematurely retired under an amendment that was deemed unconstitutional. The judgment came in response to multiple writ petitions filed by Jagtar Singh and others against the State, challenging the amendment in the Punjab State Cooperative Agricultural Service Rules, 1997, which reduced the retirement age from 60 to 58 years.

Justice Harpreet Singh Brar presided over the proceedings and delivered the oral judgment, highlighting that the principle of "No Work No Pay" cannot be applied to employees who were willing to work but were prevented due to an illegal amendment. The Court decreed that these employees are entitled to arrears of salary, increments, and other benefits for the period they were wrongfully retired.

The amendment, initially passed in 2020, was declared ultra vires by the Division Bench of the High Court in a previous judgment dated August 9, 2024. Subsequently, the Court directed the State to implement the recommendations of the 6th Punjab Pay Commission, ensuring employees receive arrears of salary, enhanced gratuity, and leave encashment, along with two annual increments.

Despite the State's arguments citing legislative prerogatives, the Court found the amendment lacked legislative mandate as required under Section 85(3) of the Punjab State Cooperative Societies Act, 1961. Consequently, the Court has ordered the State to release all pending financial benefits within three months, with an interest rate of 6% per annum for delayed payments.

Legal experts consider this judgment pivotal in reinforcing employee rights against arbitrary legislative amendments. The judgment is expected to set a precedent for similar cases across India, affirming that employees cannot be penalized for forced unemployment due to unconstitutional amendments.

Bottom Line:

The principle of "No Work No Pay" cannot be applied when employees are prevented from working due to an illegal amendment in service rules, subsequently declared ultra-vires. Employees forcibly retired under such amendment are entitled to arrears of salary, increments, and other consequential benefits.

Statutory provision(s): Punjab State Cooperative Agricultural Service Rules, 1997, Punjab State Cooperative Societies Rules, 1963, Section 85(3) of the Punjab State Cooperative Societies Act, 1961.

Jagtar Singh v. State of Punjab, (Punjab And Haryana) : Law Finder Doc Id # 2782234