Himachal Pradesh government has failed to get relief from the Supreme Court in a key case concerning government employees. The court has dismissed the state’s review petition against the verdict on the Himachal Pradesh Recruitment and Conditions of Service of Government Employees Act, 2024, which dealt with the service benefits of contract employees. The development has raised hopes of relief for around 1.5 lakh employees.
What the dispute is about
The case concerns employees who served on a contract basis in government departments for several years before being made regular. They have demanded that their contract service be counted toward service benefits and seniority from the original date of their appointment.
Himachal Pradesh has recruited on a contract basis since 2003. Employees initially had to wait up to eight years to be regularised. Successive governments later shortened this period from eight years to seven, then five, three and finally two years. During this time, contract employees began demanding financial benefits and seniority from their first date of appointment, and many approached the courts and secured relief in individual cases.
The 2024 law and the court challenge
In 2024, the state government passed the Himachal Pradesh Recruitment and Conditions of Service of Government Employees Act. The law kept the service conditions of contract and regular employees separate and excluded the contract period from the benefits available to regular employees. Employees challenged the law in the High Court, arguing that it affected their service benefits for work done during the contract period.
On April 25, 2026, the Himachal Pradesh High Court ruled on a batch of 445 petitions, including the case of Devender Kumar versus the State of Himachal Pradesh. It declared the Act unconstitutional and struck it down. The court also directed the government to take the necessary action within a stipulated time on the employees’ claims regarding service benefits and seniority.
Supreme Court route
The state challenged the High Court verdict in the Supreme Court. The Special Leave Petition (SLP) was dismissed on July 29, 2026, and a four-month timeline for payment of the financial benefits was reported at that time. The government then filed a review petition, which has now also been dismissed.
According to Himachal High Court advocate Surender Verma, the options available to the government for obtaining relief in this matter are now limited, and compliance with the courts’ directions will be the key issue going forward.
Possible financial impact
Available estimates suggest that paying the financial benefits for the contract period could cost the state around ₹8,000 crore, based on cases involving about 1.5 lakh employees. Separately, arrears of pay scales for employees and pensioners, along with other pending financial benefits, are also estimated at roughly ₹8,000 crore. Taken together, the government could face a liability of around ₹16,000 crore.
What employees are waiting for
With the review petition dismissed, employees are now looking to the government’s next step. They want their contract-period service to be counted when calculating benefits, which could affect seniority and other service-related benefits as well as pay and arrears. How the state implements the court orders, and when eligible employees receive their dues, will be the key points to watch.
