‘Equal Pay For Equal Work’ cannot be invoked across Different Service Structures, says HC

Recently, in a ruling clarifying the limits of the constitutional principle of “equal pay for equal work,” the Madras High Court held that employees of government departments cannot claim parity in salary with workers employed in public sector undertakings (PSUs). The Court set aside a prior order that had directed the Tamil Nadu government to extend government pay scales to a lineman employed by Arasu Rubber Corporation Limited, observing that service conditions in PSUs and government departments are fundamentally different.

The Case arose after a lineman working with Arasu Rubber Corporation Limited, a state-owned enterprise of the Tamil Nadu government, sought salary parity with linemen employed in government departments. A Single Judge of the High Court had earlier directed the State to grant equal pay, relying on the doctrine of equal pay for equal work.

Challenging this direction, the State argued that employees of PSUs operate under separate service rules and financial structures distinct from those governing government departments. The State also pointed to multiple policy directives issued since 2010 requiring prior government approval before adopting pay scales equivalent to those of government employees for corporation staff.

The Division Bench of Justice S. M. Subramaniam and Justice C. Kumarappan accepted the State’s position, emphasizing that the doctrine of pay parity cannot be mechanically extended across different institutional frameworks. The Court explained that employees working in PSUs and those in government departments are governed by separate service regulations and administrative structures.

The Bench observed, “There cannot be any comparison in respect of employees working in public sector undertakings as well as government departments. Since service rules are different and distinct, the question of applying the principle of equal pay for equal work does not arise.” The Court also noted that financial considerations of government-funded corporations must be assessed independently.

Consequently, the earlier direction granting pay parity was set aside.

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