An employee of a private sector company, especially the one to whom the protection under the Industrial Disputes Act is not available, cannot claim parity of treatment in the matter of compensation vis-à-vis a government employee, held the Delhi High Court.

In ‘GE Capital Transportation Financial Services Ltd. vs Tarun Bhargava', the Respondent was earlier working with Shriram Fibres Finance Ltd as Business Officer at its Ludhiana office. The company changed hands and became GE Capital Transportation Financial Services Ltd, and the terms of employment with the new employer clearly provided for a month's notice from either side, both for resignation and termination, failing which a month's salary was payable by the side that did not serve such notice.

The Respondent however contended that as per the employment rules, the retirement age was 60 and any premature ejection out of employment called for a month's salary for each year of remaining service. When he was dismissed on account of delinquency in his work, his age was 34 and, accordingly, he claimed 26 months' salary as compensation.

The Delhi High Court, dismissing his claim, said his employment was contractual, whereunder either side was free to be rid of the other by simply paying a month's salary. Accordingly, the Court ordered payment of just a month's salary together with interest.

(The author is a New Delhi-based chartered accountant.)

(This article was published on May 11, 2012)
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