Bank of India Vs T.S. Kelawala ^LLL0 Ors^LLL.pptx

Case Summary

1. Bank of India Vs. T.S. Kelawala & Ors. Civil Appeal No.2581 of 1986 Decided on the 4 th of May 1990

2. Facts: Two separate appeals involving a common question of law – Whether an employer has a right to deduct wages unilaterally and without holding an enquiry for the period the employees go on strike or resort to go slow. Appellant – Nationalised Bank Respondents 1 & 2 – Employees of the bank Respondents 3 & 4 – Unions representing Employees of the Bank

3. Demands for wage revision made by employees to the Bank administration were pending. All India Bank Employees’ Association called for a countrywide strike in support of the pending demand. On the 23rd of September, the Bank issued a circular stating that wages for those employees participating in the strike would be deducted for the days they went on strike. The strike was called to be held on the 29 th of December1977 for a period for four hours after which the employees would resume work.

4. On the 27 th of December 1977 the bank issues a circular which stated participation in the strike resulted in a breach of contract on part of the employees and they would not be entitled to draw the salary for the full day of 29 th of December, thus they need not report to duty after the four hours of the strike. This was done as the four hours proposed for the strike were the crucial working hours during which most of the work for the day was generated. Thus, if employees did not work for those four hours they would not have any work for the rest of the day. Despite such a circular, employees went ahead with the strike from the beginning of working hours on the 29 th of December 1977 and resumed work thereafter.

5. The Bank did not prevent the employees from resuming work on that day. On the 16 th of January 1978, the Bank issued a circular directing it’s managers and agents to deduct a full day’s salary of those employees who had participated in the strike. Respondents filed a writ petition demanding that the abovementioned circular be quashed. Employees reading the circular like

6. High Court’s Decision: Allowed the petition and quashed the circular. Regulations, awards or settlements did not allow the bank to make such deductions. Bank could not in good conscience stifle the legitimate weapon of strikes given by law to workers by way of the impugned circular. Decision was appealed by the Bank by a Letters Patent Appeal which was dismissed, thus an appeal was made by the bank to the SC. *l e Bank telling employees they can’t get paid if they don’t work *le employees backed by the HC

7. Supreme Court Decision: Court observed that – “ where the contract, Standing Orders or the service rules/regulations are silent on the subject, the management has the power to deduct wages for absence from duty when the absence is a concerted action on the part of the employees and the absence is not disputed .“ Whether such deductions will be pro rata or for a longer period would depend on the facts of the case such as work to be done in the said period, whether the work was in fact done and whether it was accepted and acquiesced in, etc. It is not enough that the employees attend the place of work.

8. The SC also observed that – “ ..whether the strike is legal or illegal, the workers are liable to lose wages for the period of strike. The liability to lose wages does not either make the strike illegal as a weapon or deprive the workers of it. When workers resort to it, they do so knowing full well its consequences .” Legal strikes may not invite disciplinary proceedings, while an illegal strike may do so, but in both cases the workers will be liable to losing their wages for the period of the strike. SC also stated that disciplinary actions or inquiries were not feasible in admitted cases of mass conduct and that service conditions cannot be expected to provide for all situations. Where they are silent the management should be deemed to have the power to deal with them in consistence with the law.

9. The court did however state that in cases where some employees genuinely desired to discharge duties and were not part of the mass conduct but could not do so due to failure by the management to give the necessary protection or assistance then the management will not be justified in deduction the wage of such employees and an inquiry will be required in such a case. Thus, the decision of the HC was overturned and the appeal by the Bank was allowed.

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