Preferential Treatment of Certain Employees

1. Meaning

Preferential treatment of certain employees means giving one employee or a particular group of employees an advantage, benefit, relaxation, promotion, pay increase, desirable posting, leave, training opportunity, or other employment benefit that is not similarly available to employees who are similarly situated.

Such treatment can be lawful or unlawful depending on why the preference is given, whether there is a valid classification, whether the service rules permit it, and whether the decision is arbitrary or discriminatory.

In public employment, Articles 14 and 16 of the Constitution of India are particularly important. Article 14 guarantees equality before law and equal protection of laws, while Article 16 guarantees equality of opportunity in matters of public employment. The Supreme Court has repeatedly treated Article 16(1) as an aspect of Article 14.

2. When preferential treatment may become unlawful

Preferential treatment is problematic when:

• similarly situated employees are treated differently without a rational basis;
• an employee receives promotion or relaxation because of personal favouritism;
• service rules are selectively applied;
• one employee is exempted from a requirement while another similarly situated employee is not;
• promotion opportunities are deliberately denied to particular employees;
• salary, increments or other service benefits are distributed arbitrarily;
• the decision is based on irrelevant or extraneous considerations;
• there is discrimination prohibited by law.

The Supreme Court has stated that equality requires State action affecting public employment to be based on valid and relevant principles applicable to similarly situated persons, rather than arbitrary considerations.

3. Legitimate preference versus favouritism

Not every difference in treatment is illegal.

For example, a distinction may be legally permissible where employees belong to different legally recognised categories or where legislation provides affirmative action or other special treatment. Article 16 itself permits certain forms of constitutionally recognised affirmative action. The Supreme Court has explained that classification can be permissible where it has a legitimate relationship with the purpose of the law or policy.

By contrast, giving a benefit to one employee merely because management personally prefers that employee, while denying the same benefit to a similarly situated employee without a legitimate reason, may amount to arbitrary or discriminatory treatment.

4. Important Case Laws

1. Ajit Singh v. State of Punjab, (1999) 7 SCC 209

The Supreme Court examined equality of opportunity in promotion under Articles 14 and 16.

The Court recognised that an eligible employee has a fundamental right to be considered for promotion. The right to consideration does not mean an automatic right to promotion, but similarly situated employees cannot simply be excluded from consideration through arbitrary treatment.

Principle: Preferential treatment that prevents an eligible employee from receiving equal consideration for promotion can violate Articles 14 and 16.

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

This landmark Supreme Court decision established the close relationship between equality and arbitrariness.

The Court explained that arbitrary State action is inconsistent with equality. In public employment, therefore, employment decisions cannot be based merely on personal preference, favouritism or irrelevant considerations.

Principle: Arbitrary preferential treatment can violate the constitutional guarantee of equality.

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

The Supreme Court significantly expanded the understanding of Article 14 and held that State action must satisfy requirements of fairness and non-arbitrariness.

Although the case was not specifically an employment-promotion dispute, its principle has become fundamental to administrative and service law.

Principle: Where an employment authority exercises discretionary power, that discretion cannot be exercised arbitrarily or unfairly.

4. Union of India v. N. Chandrasekharan, (1998) 3 SCC 694

The Supreme Court dealt with equality in service matters and emphasised that employees similarly situated should receive treatment according to the applicable rules.

The broader service-law principle is that an employer, particularly a public employer, cannot selectively apply service conditions in a manner that creates unjustified discrimination.

Principle: Service benefits and employment conditions should be administered consistently according to the governing rules.

5. Ajit Singh (II) v. State of Punjab, (1999) 7 SCC 209

The Supreme Court again examined Articles 14 and 16 in the context of promotion and reservation.

The Court stressed the importance of equal opportunity in promotion and distinguished between a legitimate constitutional classification and arbitrary individual preference.

Principle: Special treatment must have a lawful constitutional or statutory foundation; personal preference for particular employees cannot substitute for legally recognised criteria.

6. National Institute of Mental Health & Neuro Sciences v. K. Kalyana Raman, (1992) Supp (2) SCC 481

The Supreme Court considered principles governing selection and promotion and stressed that selection decisions must be made according to relevant criteria rather than irrelevant considerations.

Principle: Employment authorities must apply objective and relevant criteria rather than favouring particular individuals.

7. Kalicharan Pal v. Union of India (2024)

The Supreme Court reiterated that Article 16(1) provides an eligible employee a fundamental right to be considered for promotion. However, being considered does not automatically create a vested right to promotion.

Principle: An employer cannot selectively exclude an otherwise eligible employee from the promotional process, although the employer may select another candidate through a lawful process.

8. Sushil Kumar Tripathi v. Registrar, Cooperative Societies, Madhya Pradesh (2026)

In a recent Supreme Court decision, the Court considered an employee who was denied a relaxation in educational qualification even though similarly situated employees had received the same relaxation.

The Court held that denying the benefit to the appellant while extending it to similarly situated employees attracted Articles 14 and 16. The Court also emphasised that the relevant rules permitted relaxation and that the competent authority had exercised that power.

Principle: Where similarly situated employees receive a permissible service benefit or relaxation, denying that benefit to another similarly situated employee without adequate justification may constitute discriminatory treatment.

5. Preferential treatment in different employment situations

6. Private-sector employment

Articles 14 and 16 primarily regulate State/public employment. A private employer is not generally subject to Article 16 in the same manner as the State.

However, preferential treatment in private employment can still raise issues under applicable employment contracts, standing orders, labour legislation, anti-discrimination provisions, equal-pay requirements, workplace policies, and other applicable laws.

For example, favouring an employee because of a protected characteristic may have consequences under the applicable employment-discrimination framework.

7. Employer's responsibility

An employer should maintain:

1. clearly defined promotion criteria;
2. objective performance evaluation;
3. written reasons for significant employment decisions;
4. consistent application of HR policies;
5. proper documentation of exceptions and relaxations;
6. transparent salary and incentive criteria;
7. grievance mechanisms;
8. safeguards against conflicts of interest and favouritism.

This is particularly important where employees are similarly situated.

8. Key legal distinction

The central question is not simply whether two employees received different treatment.

The important questions are:

Are they similarly situated? → Is there a legitimate reason for different treatment? → Is that reason authorised by law/rules/policy? → Is the classification rationally connected with the objective? → Has the rule been applied consistently?

If a public employer gives a benefit to one employee while denying the same benefit to a similarly situated employee without a lawful or rational basis, the action may violate the equality principles under Articles 14 and 16. Recent Supreme Court authority illustrates this particularly clearly in the context of promotion and qualification relaxation.

Conclusion: Preferential treatment is not automatically unlawful. Legitimate differential treatment based on law, qualification, experience, reservation, performance criteria or other rational grounds may be permissible. However, personal favouritism, selective application of rules and arbitrary exclusion of similarly situated employees can constitute unlawful discrimination, particularly in public employment.