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Cites 5 docs
Tata Chemicals Ltd vs Its Workmen on 23 March, 1978
Reserve Bank Of India & Ors vs C.N. Sahasranaman & Ors on 30 April, 1986
The Industrial Disputes Act, 1947
Section 18 in The Industrial Disputes Act, 1947
Article 226 in The Constitution Of India 1949

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Bombay High Court
All India Central Bank Officers ... vs Central Bank Of India And Another on 8 March, 1995
Equivalent citations: (1995) 97 BOMLR 314, (1997) IIILLJ 555 Bom
Bench: V Bhairavia

JUDGMENT

1. By this petition, the petitioners have prayed for a writ of mandamus or any other appropriate writ, order or direction under Article 226 of the Constitution of India, striking down the fitment formula for officers set out in the settlement dated November 27, 1991 signed between the respondent-Bank and All India Central Bank Employees Federation. Petitioner Nos. 2 to 7 are the members of Petitioner No. 1 Federation having its office at Bombay. The respondent-Bank has two types of employees; award (clerical) staff and officer staff. The wages of the award staff are settled at the industry level with the All India Bank Employees Association (which is hereinafter called as 'AIBEA') which represents only award staff. The wages of officer staff are settled at the industry level with All India Bank Officers Confederation (which is hereinafter called as 'AIBOC') which represents only officers staff and to which the petitioner-Federation is affiliated. It is submitted that when a clerk is promoted to the next higher category as officer, he is fitted at the appropriate stage in the officer grade and for this purpose a fitment formula is introduced. It is further submitted that till the year 1986 the fitment formula in respect of the newly promoted officer was routinely laid down at bank to bank level which means that there was a different formula for different banks. Accordingly, the last fitment formula in the respondent-Bank was finalised on or about June 24, 1986 and made effective retrospectively from July 1, 1983. It is further submitted that on or about April 10, 1989 the 5th Bipartite settlement was arrived at between the AIBEA and the Indian Bank Association (which is hereinafter referred to as 'IBA') representing the employers. It is also submitted that this settlement was confined only to award staff which includes only clerical staff in the entire banking industry. The said 5th Bipartite settlement was made effective from November 1, 1987.

2. Similarly, on June 11, 1989, a settlement was arrived at between the aforesaid AIBOC and the said IBA in respect of the wages of the officers staff. That settlement was also given retrospective effect from November 1, 1987. This settlement inter alia specifically provided for fitment of those employees promoted from clerical grade to the officer grade during the period from November 1, 1987 to June 30, 1989. It is submitted that in the year 1989, IBA itself internally advised all banks that fitment of the promotees during the period from November 1, 1987 to June 30, 1989 should be made according to the settlement with the said AIBOC. IBA further advised that in regard to the fitment of subsequent promotees, the fitment formula was to be finalised. Therefore, the respondent-Bank issued a circular dated September 28, 1989 that all officers promoted after April 10, 1989 should not be fitted into the then existing fitment formula i.e. the existing formula finalised in the year 1986. It also reveals that the respondent-Bank advised that all officers of the bank should ensure that officers promoted after April 10, 1989 would continue to get the salary which they had last drawn in their clerical category even though they were promoted and posted as officers. It was also prescribed that since the said officers would get the salary of clerks pending finalisatian of fitment formula, the said officers were to be given an ad-hoc payment of Rs. 500/- per month as and by way of compensation for higher responsibilities. This amount was later raised to Rs. 650/- per month. This ad-hoc payment system was made applicable by the Bank for the officers promoted after April 10, 1989 instead of June 30, 1989, vide circular dated September 28, 1989. Pending the final decision of IBA, there was an existing fitment formula embodied in the settlement on June 11, 1989 between the IBA and AIBOC on an all India basis and for the banking industry as a whole. This settlement ought to have been applied to promotees after April 10, 1989 till another set of binding service conditions were laid down.

3. It is submitted that the petitioners' concerned members have patiently borne the aforesaid prejudice caused to them hoping that the Bank would finalise a fair fitment formula in consonance with the fitment formula embodied in the settlement of June 11, 1989 with AIBOC and that the respondent-Bank would grant them Wages and emoluments in accordance with Central Bank Officers' (Service) Regulations which govern the terms and conditions of service of the officers of the respondent-Bank. Since the officers promoted after April 10, 1989 were not given fitment in the officers scale and consequently the salary under the statutory service Regulations, the petitioner-Federation protested to the respondent-Bank and thereafter there was a discussion with the respondent-Bank on July 23/24, 1990 wherein it was inter alia pointed out by the respondent-Bank that the fitment formula had not yet been decided. Further, in the said discussion, it was settled with the petitioner-Federation that the fitment would be done as per the existing formula settled on June 11, 1989 between IBA and AIBOC even for the Officers promoted after April 10, 1989, provided the concerned officers gave individual undertakings that such fitments would be subject to the final decision in this regard.

4. It is submitted that since the IBA could not reach any understanding with AIBOC on the issue of fitment of promotees subsequent to June 30, 1989 and that IBA thereafter issued unilateral guidelines to the banks including the respondent-Bank by its circular letter dated August 8, 1990 in regard to the fitment of Promotees subsequent to June 30, 1989. As these guidelines sought to alter the fitment made in many banks retrospectively, disputes arose and most of the Banks including the respondent-Bank did not take steps initially to implement these guidelines. By letter dated September 27, 1991, the petitioner-Federation requested the respondent-Bank to act accordingly. It is submitted that thereafter IBA issued circular to all banks dated October 25, 1991 pointing out that by the circular dated August 8, 1990 giving certain guidelines regarding fitment on promotion of clerks to officers; that the aforesaid guidelines provided for a separate fitment formula for those promoted after July 15, 1989 as also an existing formula to be extended for those promoted prior to that date but after November 1, 1987. It has been contended in the said circular that the award staff unions with whom Bank leve settlements had historically been signed were by and large agreeable to the fitment formula devised by the personnel committee of IBA. It has also been contended that the aforesaid unions have now demanded that after the 5th Bipartite settlement, there should be one fitment formula. Thus, the said circular therefore, proceeded to stipulate that the banks should adopt either the fitment formula already circulated earlier to them by circular dated August 8, 1990 or adopt the modified fitment formula given in Annexure 'A' to the present circular. It was also stipulated that since, if the modified fitment formula were adopted, it was possible that some of the employees promoted between November 1, 1987 and June 30, 1989 and who had earlier been given fitment as per the aforesaid existing fitment formula may draw a lower basic pay than what they drew immediately prior to the adoption of the modified formula, banks ought not to insist on recoveries of these differences. It is submitted that these guideline were issued by IBA without consultation with AIBOC though the guidelines laid down in the settlement with AIBOC on June 11, 1989 were bilateral. It is further submitted that the fitment formula signed by the award staff union not being the representative body of officers, is also made applicable to the petitioner-Federation and its members by circular dated October 25, 1991.

5. It has been further submitted that at a meeting held on June 6/8, 1988 the respondent-bank had agreed with the petitioner-Federation that the workmen union cannot discuss officers' matters. However, the respondent-bank has recorded an agreement in its meeting on November 27, 1991 with AIBEF i.e. award staff union. It is further submitted that the fitment formula signed between the award staff union and the respondent-bank is not acceptable to the petitioner-Federation as it is prejudicial to their interest. Therefore it is submitted that it is not binding on the petitioner-Federation as the petitioner-Federation was not a party to that agreement.

6. Heard Mr. Cama, learned Counsel for the petitioners, and Mr. Rele. Learned Counsel for Respondent No. 1. It has been submitted by Mr. Cama that the fitment formula is not binding on the petitioner-Federation as the petitioner-Federation was not a party to the settlement and the award staff have no right to sign the fitment formula on behalf of the officers. It has been submitted that on implementation of the impugned fitment formula, the petitioner-Federation and its members will suffer grave financial loss. In support of his arguments, Mr. Cama has given data-wise statements and pointed out that it will be detrimental to the fitment formula scheme itself. In support of his arguments, Mr. Cama has relied on the following authorities :

1. M/s. Tata Chemicals Ltd. v. The Workmen employed under M/s. Tata Chemicals Ltd. (1978-II-LLJ-22) (SC)

2. 84 L.I.C. Page 691.

3. (1965-II-LLJ-175) (SC)

4.(1973-II-LLJ-104) (A.P.)

5. Reserve Bank of India v. C. N. Sahasranaman (1986-I-LLJ-316) (SC)

6. .

7. On the other hand Mr. Rele, learned Counsel for the Respondent No. 1-Bank submitted that it is a consistent practice of All India Banks Federation and Union to adopt uniform practice and with a view to maintain the continuity on an all India basis, this formula has been adopted and there was no prejudice against this formula up till now. Mr. Rele has further submitted that there is no financial loss to the members of the petitioner-Federation. The learned Counsel also relied on the observations of the Supreme Court in M/s. Tata Chemicals Ltd. v. Workmen employed under M/s. Tata Chemicals Ltd., (Supra) wherein it has been observed thus :-

"Industrial Disputes Act, 1947 Section 18 - Settlement outside conciliation proceeding between employer and majority Union-Acceptance of benefits flowing from the settlement even by workmen who were not signatories to it - Does not operate as estoppel against minority Union raising same demands - Theory of implied agreement by acquiescence not attracted."

In the instant case, the question is whether the fitrnent formula agreed to by the respondent-Bank is binding on the

petitioner-Federation.

8. Having regard to the facts of this case and the arguments advanced by the learned Counsel, in my view, the fitment formula signed by the award staff union, the petitioner-Federation cannot be forced to accept it. The view taken by the Supreme Court in M/s. Tata Chemicals Ltd. v. The Workmen employed under M/s. Tata Chemicals Ltd., (Supra) and Reserve Bank of India and Others v. C. N. Sahasranaman and Others (Supra) is equally applicable in the instant case. The fitment formula agreed by the award staff and signed on behalf of the award staff would not be applicable as the petitioner-Federation was not a party to that fitment formula agreement and therefore, it would not be binding on the members of the petitioner-Federation. There are admittedly two cadres and two unions representing the respective cadres. The petitioner-Federation is an Independent federation union of Bank officers cadre completely independent from the award staff union. The service conditions of the officers' cadre and award staff cadre cannot he equated and therefore, the petitioner-Federation has a right to arrive at an acceptable fitment formula to their benefit, and the fitment formula agreed by the award staff is not binding on the members of the petitioner-Federation. So far as the terms of the circular with regard to their application to the fitment formula are concerned, the same are not binding on the union. Hence, the said circular dated December 27, 1991 is struck down.

In the result, this petition is allowed. Rule is made absolute in the abovesaid terms. No order as to costs.