The Dharwad bench of the Karnataka High Court on July 5, 2022,1 dismissed an intra-court appeal challenging the validity of the Karnataka Government's order increasing the retirement age of workmen from 58 years to 60 years under the Karnataka Industrial Employment (Standing Orders) Rules, 1961 (“Karnataka Rules”) enacted under the Industrial Employment (Standing Orders) Act, 1946 (“IESO Act”).

2. Background

The IESO Act requires covered establishments to formally define the conditions of employment of the workmen such as work timings, shift working, payment of wages, disciplinary action for misconduct and fixing the age of retirement for the workmen. The Government of Karnataka, through an order dated March 27, 2017, increased the retirement age of workmen from 58 to 60 years under the Karnataka Rules by amending the model standing orders. Pursuant to the amendment, the General Secretary of Harihar Polyfibers Employees Union approached the deputy labour commissioner, Belgavi (“Deputy Labour Commissioner”) for modifying the retirement age under the organization's Certified Standing Orders (“CSO”) from 58 to 60 years. The Deputy Labour Commissioner accepted the request. Aggrieved by this, Grasim Industries Limited (“Grasim”) approached the Additional Labour Commissioner and further appealed before a single bench in the High Court of Karnataka. These attempts were unsuccessful, and Grasim filed an intra-court appeal before the Dharwad bench.

3. Findings of the Court

Grasim's main contention was that an increase in the retirement age of the workmen would result in an added financial burden, in addition to the fact that there already was a mutual settlement arrived between Grasim and the Employees' Union of Harihar Polyfibers. The workmen's health and safety concerns were also highlighted by Grasim. The High Court of Karnataka dismissed the appeal and made the following observations:

  1. India is a welfare state and labour disputes cannot be merely governed by a traditional bi-partite framework. Adjudicatory agencies will have to play the role of facilitative stakeholders.
  2. The general life expectancy has increased and there is a nexus between the life expectancy of employees and their age of superannuation. An increase in life expectancy is met with a corresponding increase in the general age of pensionable retirement.
  3. In a welfare state, a legislative regulation around such employer prerogatives is acceptable.
  4. The CSO fixed the age of retirement as 58 in the year 1971 and the premise on which such age was fixed has changed over the years.
  5. An employer cannot use economic reasons to suppress workers seeking a higher age of retirement.
  6. Grasim is not registered as having a ‘hazardous process'. Moreover, the potential hazards can be taken care of by advanced technology and safety measures.


The Karnataka High Court's observations in this case are being widely discussed and debated amongst industry stakeholders. While on one hand employees, trade unions and employees' associations are commemorating the decision of the High Court, employers in Karnataka are evaluating its implications at a financial as well as an operational level.

The primary grievance of industry members appears to be that their opinions and suggestions were not appropriately taken into account while increasing the retirement age from 58 to 60 years. It is interesting to note that the Karnataka Government had placed the draft amendment to the Karnataka Rules (with respect to the increase in the retirement age) in the public domain on December 7, 2009, for comments and suggestions from all stakeholders. However, at that point, the amendment was not brought into effect. Further, it is being widely argued that the right to decide the age of retirement of its employees is fundamental for anyone to meaningfully exercise their freedom to carry out any occupation, trade, or profession. By fixing the retirement age of workmen without having meaningful discussions and consultations with the concerned stakeholders, the State Government has violated the fundamental rights of the organizations and their shareholders as guaranteed under Article 19 (1) (g) of the Indian Constitution. While the judgment certainly reaffirms the principles of social welfare over absolute freedom of contract, the fact that it imposes an additional financial burden on employers and that it could potentially reduce employment opportunities for the younger generation cannot be ignored. Also, the reality that different industries have requirements and different employment conditions cannot be overlooked.


1. M/S Grasim Industries Limited vs. The General Secretary Harihar Polyfibers, Employees Union, and Ors; WA 100250 of 2021.

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