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As per case facts, employees of Fertilizer Corporation of India (FCI) and Hindustan Fertilizer Corporation (HFC) challenged government memos that linked their pay scale revision to the financial health and
...revival packages of these sick Public Sector Undertakings. They argued this policy was discriminatory, violated fundamental rights, and was unfair given their service and the companies' public utility, especially when other PSUs received regular pay hikes regardless of profit/loss. They also highlighted a previous High Court order that seemed to acknowledge a settlement for pay revision. The question arose whether employees of continuously loss-making public sector companies, which were under BIFR's purview, had a legal right to demand pay scale revisions and government financial support, irrespective of the companies' economic viability, or if the employer's capacity to pay was a valid consideration. Finally, the Supreme Court dismissed the petitions. It ruled that employees of government companies are not civil servants and cannot legally compel the government to fund their pay revisions when the companies are financially unviable. The Court emphasized that economic viability is a critical factor in wage fixation and upheld the government's policy. Furthermore, it noted that most petitioners had opted for and accepted Voluntary Retirement Scheme benefits, which constituted a full and final settlement, extinguishing their claims for past pay revisions.
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