Cannot deny pension to those who resign: Cal HC

Kolkata: In the case of a trust-based pension scheme which provides a pension on completion of specific years of service, resignation cannot defeat eligibility, the Calcutta High Court held while dismissing the argument of a private company which denied pensions to employees just because they "resigned" and did not "retire"."A non-contributory pension fund, vide the trust deed, is maintained by the company as part of its corporate social responsibility (CSR), specifically grounded on ethical, philanthropic and economic concerns being brought into its operations, bearing a positive impact towards society at large. It should go beyond profit maximisation, focusing on sustainability and ethical practices. It is a well-established doctrine of employment and administrative law that even where a pension scheme is non-contributory (fully funded by the employer), once created, it cannot be administered arbitrarily or whimsically... Where the pension fund is set up as a trust, as it is in the instant case, the employer cannot treat the fund as its own property, or else that would amount to the employer's unjust enrichment, which is prohibited under the law. It is a binding obligation voluntarily created by the employer upon itself," the division bench held on Monday.
The single judge's observation that pension is "wage" under the definition of 2(iv) of the Payment of Wages Act 1936 was upheld by the division bench.Heinen & Hopman Engineering (I) Private Limited approached the Calcutta High Court's division bench of Justices Lanusungkum Jamir and Justice Rai Chattopadhyay against the single judge's order on April 11, 2025, which directed the company to release pension funds to employees who resigned before their superannuation.