Can Limitation Act apply to salary arrears for contract employees?
I joined the service as a contract employee in 2017 against a government-sanctioned post and was regularized in 2020. However, a CWP case was filed in 2024 regarding initial contract benefits, promotion, seniority, and other consequential benefits. Can the three-year restriction under the Limitation Act be applied to our case concerning salary arrears? If so, what remedy is available? Additionally, if the restriction is applied, will we at least receive the basic pay of the pay commission as arrears for the contract salary?
The Factories Act and Shop Acts mandate that earned leaves cannot be arbitrarily cancelled - employers must allow workers to use their leaves or provide monetary compensation for unused ones. Legal recourse is available through the labor commissioner if these rights are denied, as multiple High Court rulings have confirmed that employees are entitled to leave encashment even during their notice period.
Accumulated leave is a worker's legal entitlement under the Factories Act and Shop Acts, requiring employers to either grant leave usage or pay compensation - they cannot simply cancel these leaves. You can seek relief by filing a case with the labor authorities since courts have consistently upheld that employees have a right to leave encashment, including during notice periods.
Under Article 137 of the Limitation Act, 1963, the three-year limitation period for service matters begins from when the right to claim first accrues, but courts have held that if the claim relates to a continuing wrong (like wrongful fixation of pay scale), limitation doesn't apply. Based on various Supreme Court judgments (including the landmark State of Madhya Pradesh v. Dharam Bir, 1998), if your claim is about wrongful pay fixation during contractual period affecting subsequent service benefits, you can claim arrears beyond three years. However, you should consult a labor lawyer as the specific remedy would depend on the exact terms of your regularization order and whether your contract period is treated as continuous service under relevant service rules.
Sir, this case requires brief discussion so it is advised to consult an expert lawyer specialised in labour matter who will assist you about the applicability of the Limitation Act on your case. For further legal assistance contact us on our helpline number.
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