Arbitrariness in Employment Decisions

1. Meaning of arbitrariness in employment decisions

Arbitrariness in employment decisions means taking an employment-related decision without a reasonable, rational, fair and non-discriminatory basis.

In India, the doctrine is particularly important in public employment because Articles 14 and 16 of the Constitution require State action to be fair, reasonable and non-arbitrary. The Supreme Court has repeatedly recognised that arbitrariness is inconsistent with equality.

Employment decisions that may be challenged as arbitrary include:

• recruitment and selection;
• appointment;
• promotion;
• transfer;
• pay and benefits;
• performance assessment;
• disciplinary action;
• suspension;
• termination;
• renewal of contractual employment;
• denial of increments;
• retirement-related decisions; and
• allocation of employment benefits.

The doctrine is strongest where the employer is the State or an instrumentality of the State, but certain principles of fairness and contractual/public-law review can also apply to public authorities acting in contractual employment matters.

2. Constitutional foundation

Article 14

Article 14 guarantees equality before law and equal protection of laws.

The modern interpretation of Article 14 is not limited to situations where two employees are treated differently. It also prohibits arbitrary State action.

The Supreme Court's jurisprudence developed the proposition that:

Equality and arbitrariness are fundamentally opposed.

This principle was prominently established in E.P. Royappa v. State of Tamil Nadu and subsequently developed in cases such as Ajay Hasia.

Article 16

Article 16 specifically concerns equality of opportunity in matters of public employment.

Therefore, arbitrary conduct involving:

• recruitment,
• promotion,
• appointment,
• transfer,
• termination,
• conditions of service,

may implicate both Articles 14 and 16.

The Supreme Court has recognised that Articles 14 and 16 can be invoked where public-employer action terminating employment is arbitrary.

3. What makes an employment decision arbitrary?

An employment decision may be considered arbitrary when it is:

1. Without rational basis

The decision has no reasonable connection with the legitimate objective being pursued.

2. Based on irrelevant considerations

The employer relies upon factors that should not influence the decision.

3. Discriminatory

Similarly situated employees are treated differently without a legitimate justification.

4. Mala fide

The decision is motivated by improper purposes, personal hostility or ulterior motives.

5. Unreasonable

The decision is so disproportionate or unreasonable that it cannot reasonably be justified.

6. Inconsistent

An authority applies one standard to one employee and a completely different standard to another similarly situated employee without justification.

7. Contrary to prescribed rules

A mandatory service rule or established procedure is ignored.

8. Without adequate consideration

Relevant evidence or circumstances are completely ignored.

4. Important case laws

Case 1: E.P. Royappa v. State of Tamil Nadu, (1974) 4 SCC 3

This is the foundational case on the relationship between equality and arbitrariness.

The Supreme Court moved away from a narrow understanding of Article 14 based purely upon classification.

Principle

The Court held that arbitrariness is antithetical to equality.

In other words:

If State action is arbitrary, it may itself violate Article 14 even without proving traditional discrimination.

Employment relevance

The case is particularly important because it involved a senior public servant and issues concerning his appointment/transfer.

It established that public employment decisions must satisfy standards of fairness and non-arbitrariness.

The Supreme Court continues to cite Royappa as the source of the constitutional principle that equality is opposed to arbitrariness.

5. Maneka Gandhi v. Union of India, (1978) 1 SCC 248

Although this was not an ordinary employment case, it fundamentally transformed Article 14 jurisprudence.

Principle

The Court emphasised that State procedure affecting rights must be:

• fair;
• just;
• reasonable; and
• non-arbitrary.

Article 14 was therefore connected with broader principles of fairness and reasonableness.

Employment relevance

An employment decision by a governmental authority cannot be justified merely by saying:

"We followed the formal procedure."

The procedure and decision must also satisfy constitutional standards of fairness.

This principle is particularly important in:

• disciplinary proceedings;
• termination;
• suspension;
• service benefits;
• administrative employment decisions.

6. Ajay Hasia v. Khalid Mujib Sehravardi, (1981) 1 SCC 722

This Constitution Bench decision further developed the doctrine of non-arbitrariness.

Principle

The Court held that arbitrary State action necessarily involves a denial of equality.

The doctrine was extended beyond conventional discrimination.

Employment relevance

Where an authority makes an employment decision based upon:

• personal preference;
• irrelevant considerations;
• irrational criteria;
• inconsistent standards;

the affected employee can potentially invoke Article 14.

The Supreme Court continues to identify Ajay Hasia as an important authority for the proposition that arbitrary State action violates equality.

7. D.T.C. v. D.T.C. Mazdoor Congress, 1991 Supp (1) SCC 600

This is one of the most important employment cases concerning arbitrary termination.

The Delhi Transport Corporation had service regulations permitting termination of certain employees through a notice mechanism.

Issue

Could an employer possessing very wide termination power exercise that power without adequate standards or safeguards?

Supreme Court's approach

The Court strongly disapproved of an unguided and arbitrary power of termination.

A power allowing an employer to terminate employment without sufficient standards could be inconsistent with Articles 14 and 21 when exercised by a State instrumentality.

Importance

The case demonstrates that:

A contractual or regulatory power is not necessarily valid merely because it exists on paper.

If a public employer possesses an excessively broad power and exercises it arbitrarily, constitutional scrutiny may arise.

This case is repeatedly recognised among the leading authorities concerning arbitrary termination in public employment.

8. Central Inland Water Transport Corporation Ltd. v. Brojo Nath Ganguly, (1986) 3 SCC 156

This is another landmark employment decision.

The case concerned a service rule permitting termination of employment by giving notice.

Principle

The Supreme Court examined the unfair and unreasonable nature of employment terms, particularly where there was unequal bargaining power.

The Court recognised that an employment relationship is not always a relationship between equal bargaining parties.

Relevance to arbitrariness

A public-sector employer cannot necessarily rely upon a harsh contractual clause to justify arbitrary treatment.

The case is particularly relevant to:

• termination clauses;
• unequal bargaining power;
• oppressive employment conditions;
• public-sector employment contracts.

The decision has been repeatedly recognised as part of the line of authority invalidating arbitrary termination by public employers.

9. Shrilekha Vidyarthi v. State of U.P., (1991) 1 SCC 212

This is extremely important because it extended Article 14's non-arbitrariness principle into the contractual sphere of State action.

Facts in brief

The State Government issued an order affecting the appointments of government counsel throughout the State.

The argument was essentially that the relationship was contractual and therefore Article 14 should not apply.

Supreme Court's decision

The Court rejected the idea that Article 14 completely disappears merely because the State is acting in a contractual context.

Principle

State action in contractual matters must still satisfy:

• fairness;
• reasonableness;
• non-arbitrariness;
• rule of law.

The Court expressly rejected the exclusion of Article 14 from State contractual action.

Employment relevance

A public authority cannot simply say:

"This is a contractual employment matter, so constitutional fairness does not apply."

The nature of the action and the identity of the employer remain important.

10. State of Punjab v. Amar Singh, (1998) 2 SCC 208

This case is particularly relevant to termination of public employees.

The Supreme Court discussed the application of Articles 14 and 16 to employment termination and recognised that arbitrary termination by a public employer can be invalidated.

Principle

Public-employment decisions must satisfy:

• reasonableness;
• fairness;
• equality;
• absence of irrelevant considerations.

The Court also referred to the principle that Articles 14 and 16 are not limited only to initial appointment; they can extend to matters such as:

• salary;
• increments;
• promotion;
• pension;
• leave;
• termination; and
• other conditions of service. 

Importance

This demonstrates the wide scope of the anti-arbitrariness doctrine in employment.

11. A.L. Kalra v. Project & Equipment Corporation of India Ltd., (1984) 3 SCC 316

This case is important because it clarified that arbitrariness is not necessarily dependent upon discrimination.

Principle

Article 14 attacks arbitrary administrative or executive action because arbitrary action itself is inconsistent with equality.

Employment relevance

An employee does not always need to identify another employee who was treated differently.

For example:

An employee may challenge a decision because it was irrational, unreasonable or unsupported by the applicable rules even if no comparator employee exists.

The Supreme Court has cited A.L. Kalra while explaining that arbitrariness is a distinct doctrine from discrimination.

12. Manager, Government Branch Press v. D.B. Belliappa, (1979) 1 SCC 477

This case concerns unequal treatment in the termination of temporary employees.

Principle

The State cannot arbitrarily terminate one employee while retaining another similarly situated employee without a reasonable basis.

Employment significance

Suppose:

• Employee A and Employee B are similarly situated;
• both have similar service records;
• both are temporary employees;
• the employer terminates A but retains B;
• no rational reason explains the distinction.

Such action can raise an Article 14 challenge.

The case has been cited in later jurisprudence concerning arbitrary termination and differential treatment of employees.

13. Ranjit Singh v. Union of India, 2026

A recent Supreme Court decision illustrates that the anti-arbitrariness doctrine remains relevant to long-term contractual public employment.

The Court considered employees who had been continuously engaged against sanctioned posts for many years and observed that ending such engagement after prolonged service could be vitiated by arbitrariness and offend equality principles in the circumstances of that case.

Importance

This shows that the question is not simply:

"Was the employee technically contractual?"

The court may examine the real circumstances of employment, including:

• duration of service;
• nature of duties;
• sanctioned posts;
• repeated extensions;
• legitimate expectations;
• manner of termination.

14. Arbitrariness in recruitment

Arbitrariness can arise even before an individual becomes an employee.

Examples include:

• changing selection criteria after applications are received;
• favouring a particular candidate;
• ignoring published eligibility criteria;
• applying different standards to different candidates;
• conducting interviews without rational criteria;
• manipulating selection procedures.

Article 16 is especially important because public recruitment must provide equality of opportunity.

15. Arbitrariness in promotion

Promotion decisions may be challenged where:

• applicable promotion criteria are ignored;
• seniority rules are selectively applied;
• similarly situated employees receive different treatment;
• confidential/performance reports are manipulated;
• irrelevant considerations influence promotion;
• an employee is denied promotion for reasons unrelated to the applicable criteria.

However, an employee does not have an automatic fundamental right to promotion merely because they are senior. What is constitutionally protected is fair and non-arbitrary consideration according to applicable rules.

16. Arbitrariness in transfer

Transfer is generally considered an incident of service.

Therefore, courts ordinarily exercise restraint in transfer matters.

But a transfer may become legally vulnerable where it is shown to be:

• mala fide;
• contrary to statutory rules;
• punitive in substance;
• discriminatory;
• issued by an incompetent authority;
• motivated by an improper purpose.

Thus, the existence of administrative discretion does not mean unlimited discretion.

17. Arbitrariness in disciplinary action

A disciplinary authority cannot act merely according to personal preference.

Problems may arise when:

• charges are selectively framed;
• similarly situated employees receive radically different treatment without justification;
• evidence is ignored;
• punishment is imposed for irrelevant reasons;
• the employee is denied a reasonable opportunity to defend;
• the authority acts with predetermined bias.

However, courts generally do not substitute their own view for the employer's factual assessment unless there is a serious legal or procedural defect.

18. Arbitrariness in termination

Termination is one of the most significant areas.

A termination decision may attract judicial scrutiny where it is:

• mala fide;
• discriminatory;
• based on irrelevant considerations;
• contrary to mandatory rules;
• unsupported by evidence;
• punitive without following required procedure;
• irrational;
• constitutionally arbitrary.

For public employers, even a temporary or contractual employee may in appropriate circumstances invoke Articles 14 and 16 against arbitrary State action. The Supreme Court has expressly recognised this principle.

19. Arbitrariness versus discrimination

These concepts overlap but are not identical.

Discrimination

The employee generally demonstrates:

"I was treated differently from another similarly situated person."

Arbitrariness

The employee may demonstrate:

"The decision itself has no reasonable, rational or lawful basis."

Therefore:

Every arbitrary decision may involve inequality, but proving arbitrariness does not always require identifying a comparator.

This distinction is supported by the Supreme Court's discussion of A.L. Kalra.

20. Arbitrariness versus mala fide action

They are related but distinct.

Arbitrariness

The decision is unreasonable or lacks a rational basis.

Mala fide

The decision is made for an improper purpose or with bad faith.

For example:

A transfer made because the authority personally dislikes an employee may involve mala fides.

Whereas:

A promotion policy that gives unlimited discretion to an authority without rational standards may be arbitrary even without proving personal hostility.

21. Arbitrariness and private employers

This distinction is extremely important.

Article 14 directly governs State action, not every private employer.

Therefore, an ordinary private employer's employment decision is not automatically unconstitutional merely because an employee considers it unfair.

In private employment, the employee may instead rely upon:

• employment contract;
• labour legislation;
• standing orders;
• company policies;
• industrial-dispute mechanisms;
• anti-discrimination legislation where applicable;
• principles governing wrongful termination;
• other applicable statutory protections.

Where an employer is a State instrumentality or public authority, constitutional review is much more directly available.

22. Judicial review of arbitrary employment decisions

Courts generally examine whether:

1. the authority had jurisdiction;
2. the correct legal rules were applied;
3. the decision was based on relevant considerations;
4. irrelevant considerations were excluded;
5. natural justice was followed where applicable;
6. there was evidence supporting the decision;
7. the decision was mala fide;
8. the action was discriminatory or arbitrary;
9. the punishment was grossly disproportionate in an appropriate case.

The court generally does not function as an ordinary HR department or substitute its own preferred employment decision merely because another decision might have been possible.

23. Burden of establishing arbitrariness

An employee challenging a decision should ideally provide concrete material.

For example:

Weak allegation

"My termination was arbitrary."

Stronger challenge

"The employer retained three employees with shorter service and identical contractual status but terminated me without identifying any performance or organisational reason. The stated reason is inconsistent with the employer's treatment of the other employees."

The second approach gives the court a factual basis upon which arbitrariness can be assessed.

24. Evidence useful in an arbitrariness challenge

An employee may rely upon:

• appointment letter;
• service rules;
• HR policies;
• promotion rules;
• termination letter;
• performance reports;
• attendance records;
• emails;
• official correspondence;
• comparative treatment of similarly situated employees;
• disciplinary records;
• transfer orders;
• minutes of meetings;
• recruitment advertisements;
• selection criteria;
• relevant government orders.

25. Remedies for arbitrary employment decisions

Depending upon the circumstances and forum, possible remedies can include:

1. Quashing of the impugned order

The court may set aside an unlawful decision.

2. Reconsideration

The authority may be directed to reconsider the matter according to law.

3. Fresh inquiry

Where the original process was fundamentally defective.

4. Reinstatement

In appropriate cases involving unlawful termination.

5. Back wages

Depending upon applicable law and circumstances.

6. Restoration of benefits

Such as seniority, pensionary benefits or other service benefits.

7. Compensation

Where appropriate and legally justified.

26. Important principles from the case laws

27. Conclusion

Arbitrariness in employment decisions is fundamentally a question of fairness, rationality and lawful exercise of power.

In public employment, Articles 14 and 16 impose a constitutional obligation upon the State and its instrumentalities to make employment decisions that are fair, reasonable, rational, relevant and non-discriminatory. The doctrine is not restricted to recruitment; it extends to promotion, transfer, disciplinary action, benefits and termination. The Supreme Court's jurisprudence from E.P. Royappa through Ajay Hasia, Maneka Gandhi, D.T.C. Mazdoor Congress, Brojo Nath Ganguly, Shrilekha Vidyarthi, A.L. Kalra, Belliappa and State of Punjab v. Amar Singh establishes this principle.

The most important distinction is that unfavourable does not automatically mean arbitrary. An employer may take a decision that adversely affects an employee if the decision is based on a legitimate objective, relevant material, applicable rules and a fair procedure. The legal problem arises when the decision is whimsical, irrational, discriminatory, mala fide, unsupported by relevant considerations, or inconsistent with the governing rules.

For private employment, Article 14 does not automatically apply merely because an employer acts unfairly; the employee must identify the relevant contractual, statutory or labour-law protection. For public employment, however, the constitutional prohibition against arbitrary State action provides a powerful basis for judicial review.