Summary
On a challenge confined to interest for pandemic-related deferment of salaries and pensions, the Supreme Court reduced the High Court’s rate from twelve percent to six percent simple interest. Salary and pension remained rightful entitlements, and delayed payment warranted interest, but the award should not punish the State. The direction covered the specified employee categories and all State pensioners on their deferred amounts for the period of delay, payable within thirty days.
Issues
- What interest should be payable for delayed salaries and pensions where the State had already paid the deferred principal amounts.
Held
- The appeal concerned only interest: the outstanding salary and pension amounts had already been paid in two tranches pursuant to interim directions. (¶¶ 10, 11)
- Salaries compensate services rendered and pensions recognize past service; both are rightful entitlements governed by law. Delay warrants interest at an appropriate rate, while interest should not serve as a penalty against the State. (¶ 14)
- Taking account of the circumstances and prevailing bank interest, the Court substituted six percent simple interest for twelve percent. The direction was confined to categories three to six of the Government Order and expressly extended to all State pensioners on the deferred portion for the delay period. (¶ 15)
- The interest was to be paid within thirty days of the order. (¶ 15)
Result
Appeal disposed of by substituting six percent simple interest for the High Court’s twelve percent award, on the stated coverage and payment directions, without costs.