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On September 21, 1998, at around 05:15 PM, Mr Kumar and another employee from the same bank branch, Mr. Chopra, assaulted Mr Bansal, a bank officer posted at the branch, inside the senior manager’s cabin. Other bank officials had to intervene to separate Bansal from Kumar and Chopra.
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Subsequently, on October 12, 1998, Mr Kumar, who was a clerk at the public sector bank’s Gurmandi branch, Jalandhar, received a charge memo from the disciplinary authority . The bank’s disciplinary authority accused him of gross misconduct within the premises of the bank branch.
The authority concluded that Kumar had committed an act of gross misconduct as defined in Clause 19.5(c) of the Bipartite Settlement dated October 19, 1996, as amended.
As a result, they punished him by dismissing from service with immediate effect. The appellate authority then ordered that Kumar be removed from the bank’s services immediately. However, he would continue to receive his terminal benefits for the time he worked there. They also clarified that removal from service would not be a disqualification for Kumar’s future employment.
Following this, the case went to labour court and then the high court and eventually reached the Supreme Court. Kumar won the case in Supreme Court and got back his pension.
Kumar was charged with committing an act of gross misconduct as defined in Clause 19.5(c) of the Bipartite Settlement which was proved by the Enquiry Officer and accepted by the disciplinary authority.
The Supreme Court said that this was in accordance with the Bipartite Settlement that was arrived at between the Indian Banks’ Association and the Banks’ Workmen Union on October 19, 1996.
This settlement was arrived at under Section 2(p) and Section 18(1) of the Industrial Disputes Act read with Rule 58 of the Industrial Disputes (Central) Rules, 1957. This settlement therefore has a statutory backing and is binding on the parties.
On April 10, 2002, another settlement was reached between the Indian Banks’ Association, representing the management on the one hand, and the workmen represented by the All India Bank Employees’ Association, National Confederation of Bank employees and Indian National Bank Employees’ Federation on the other hand.
Following this, Clause 6(b) was inserted in the Bipartite Settlement providing for one of the penalties which may be imposed on a delinquent employee found guilty of gross misconduct. Clause 6(b) reads as follows:
6. An employee found guilty of gross misconduct may: (a) * * * * * (b) be removed from service with superannuation benefits i.e. pension and/or provident fund and gratuity as would be due otherwise under the rules or regulations prevailing at the relevant time and without disqualification from future employment; or…
The Supreme Court said that thus, as per the aforesaid clause (6(b)), an employee who is found guilty of gross misconduct may be removed from service but would be provided with superannuation benefits which would otherwise be due to him. Further, the penalty of removal from service would be without disqualification from future employment.
Usually PSU bank employees become eligible for pension after completing 10 years of service.
What does this mean for bank employees?
Suman Kamani, Partner, ALMT Legal, said to ET Wealth Online that the verdict of the Supreme Court in this judgment in simple terms means that if a bank employee is removed for misconduct after more than 10 years of service, he can still get his pension and other retirement benefits, as long as the rules and agreements allow it.
Kamani says that in the present case, the Hon’ble Apex Court upheld the order passed by the learned Single Judge and the Division Bench of the Hon’ble High Court directing the Bank to give Kumar his pension and retirement money because he qualified under the Bipartite Settlement – a statutory agreement binding on banks and workmen.
Further, his punishment was changed by the Appellate Authority from dismissal to removal from service “with terminal benefits” for the period of service he had rendered, and thus, he was entitled to those benefits.
The Supreme Court clarified that the bipartite settlement and pension regulations must be read harmoniously, and pension rights cannot be denied by relying solely on internal regulations when a final order of an authority grants terminal benefits.
Tushar Nair, Advocate, Delhi High Court, said the Supreme Court has authoritatively reinforced the principle that collectively bargained labour rights cannot be rendered otiose (idle) through restrictive interpretations of prevalent service regulations.
According to Nair, the Supreme Court applied the binding precedent in Bank of Baroda v. S.K. Kool, and held that Clause 6(b) of the Bipartite Settlement, which permits removal of an employee from service with superannuation benefits must be harmoniously construed with Regulation 22(1) of the Pension Regulations which severs the employees from any terminal entitlements in view their removal or termination from service.
Nair says the Supreme Court has clarified that where a bank employee has completed minimum qualifying service, removal under Clause 6(b) of the Settlement entitles them to “superannuation benefits as would be due otherwise”. Anything contrary would reduce the settlement to a “fraud” on the employee who has otherwise qualified for pensionary benefits, rendering the protective clause meaningless.
Anushtha Rathod, Associate, ALMT Legal, says that the significance of this judgement for bank employees is that, this decision provides a momentous safeguard to the rights of bank employees ensuring that their pension rights are protected, reducing uncertainty regarding superannuation benefits following disciplinary removal from service.
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