Supreme Court Upholds Bank’s Decision on Voluntary Retirement of Employee: U.P. Singh vs. Punjab National Bank (2023)

Date of the Judgment: December 14, 2023
Citation: 2023 INSC 1077
Judges: Hima Kohli, J., Rajesh Bindal, J.
Can an employee, who is absent from duty for a prolonged period and fails to comply with transfer orders, claim reinstatement? The Supreme Court of India addressed this question in a recent case involving an employee of Punjab National Bank who was deemed to have voluntarily retired due to his prolonged absence. The court upheld the decision of the bank and the High Court, emphasizing that an employee cannot unilaterally decide not to comply with transfer orders and then claim reinstatement. The judgment was delivered by a two-judge bench comprising Justice Hima Kohli and Justice Rajesh Bindal, with Justice Rajesh Bindal authoring the opinion.

Case Background

The appellant, U.P. Singh, was employed as a Clerk-cum-Cashier at Punjab National Bank. He was initially posted at Barabanki, then transferred to Zaidpur, and subsequently to Shahjanhanpur in August 1978. On June 14, 1982, he was suspended due to disorderly behavior. Following an inquiry, he was found guilty and punished with the stoppage of two graded increments with cumulative effect, as per an order dated September 28, 1983. In the same order, he was directed to report for duty at the Branch Office, Bhagwantnagar, Unnao. However, the employee failed to join duty at the new location. Citing Clause XVI of the Bipartite Agreement, the bank deemed him to have voluntarily retired from service on December 5, 1984. Aggrieved by this decision, the employee raised a dispute before the Assistant Labour Commissioner six years later, which was then referred to the Tribunal for adjudication.

Timeline

Course of Proceedings

The Central Government Industrial Tribunal-cum-Labour Court initially ruled in favor of the workman, setting aside the order of voluntary retirement and directing reinstatement with full back wages. However, the learned Single Judge of the High Court of Delhi reversed this award, a decision which was later upheld by the Division Bench in an intra-court appeal. The Supreme Court then heard the appeal against the Division Bench’s order.

Legal Framework

The case primarily revolves around Clause XVI of the Bipartite Agreement between the Indian Banks’ Association and Workmen Unions, specifically the Fourth Bipartite Agreement dated September 17, 1984. This clause deals with voluntary cessation of employment by employees. The relevant portion of Clause XVI is as follows:

“Clause XVI – Voluntary Cessation of Employment by the Employees Where an employee has not submitted any application for leave and absents himself from work for period of 90 days or more consecutive days without or beyond any leave to his credit or absents himself for 90 or more consecutive days beyond the period of leave originally sanctioned or subsequently extended or where there is satisfactory evidence that he has taken up employment in India or the management is satisfied that he has no present intention of joining duties, the management may at any time thereafter give a notice to the employee last known address calling upon the employee to report for duty within 30 days of the notice stating inter alia, the grounds for the management coming to the conclusion that the employee has no intention of joining duties and furnishing necessary evidence, wherever available. Unless the employee reports for duty within 30 days or unless he gives an explanation for his absence satisfying the management that he has not taken up another employment for avocation and that he has no intention of not joining duties, the employee will be deemed to have voluntarily retired from the Bank’s service on the expiry of the said notice. In the event of employee submitting a satisfactory reply, he shall be permitted to report for duty thereafter within 30 days from the date of the expiry of the aforesaid notice without prejudice to the banks right to take any action under law or rules of service.”

Arguments

Arguments of the Workman (Appellant):

• The Disciplinary Authority could not order his transfer in the same order as the punishment, as the authority to order transfers lies with a different authority.
• He was not given joining time to report to the new place of posting.
• He made several representations to revoke his suspension and enable him to join the new posting but his grievances were not addressed.
• He was not paid subsistence allowance during his suspension.
• He could not be continued on suspension after the punishment order as the order stated that he would be reinstated only on joining at the new place.
• The Branch Office, Bhagwantnagar, Unnao, was 350 kilometers away.
• He was not paid allowances, including subsistence allowance.
• He could not have been transferred while under suspension.

Arguments of the Bank (Respondent):

• The workman had a history of misbehaving with senior officers and not complying with orders.
• He was given a light punishment of stoppage of two graded increments, while the initial notice was for dismissal.
• To avoid further issues, he was transferred to a different branch.
• The workman did not comply with the transfer order and continued raising disputes.
• He further misconducted himself by sitting on a hunger strike.
• There was no error in the High Court’s orders setting aside the Tribunal’s award.

Issues Framed by the Supreme Court

The Supreme Court did not explicitly frame issues in a separate section. However, the core issue that the court addressed was:

1. Whether the High Court was correct in setting aside the award of the Tribunal, which had ordered reinstatement of the workman?

Treatment of the Issue by the Court

Authorities

The judgment does not explicitly mention any cases or books relied upon by the court. However, it extensively discusses Clause XVI of the Bipartite Agreement, which is the primary legal provision considered by the court.

Judgment

How each authority was viewed by the Court?

• Clause XVI of the Bipartite Agreement: The Court relied on Clause XVI of the Bipartite Agreement to conclude that the bank was justified in deeming the workman voluntarily retired. The clause explicitly states that if an employee is absent for 90 days or more without leave and fails to respond to a notice to join duty, the employee can be deemed to have voluntarily retired.

What weighed in the mind of the Court?

The Supreme Court’s decision was primarily influenced by the following:

• The workman’s deliberate non-compliance with the transfer order.
• The workman’s prolonged absence from duty without proper authorization.
• The workman’s failure to avail of remedies against the transfer order.
• The existence of Clause XVI of the Bipartite Agreement, which allowed the bank to deem the workman voluntarily retired.
• The workman’s conduct of corresponding with the bank while not reporting for duty, indicating a lack of intention to rejoin.
• The fact that the workman had enrolled as an advocate and was in active legal practice, showing his intent to pursue a different career.

The court rejected the workman’s argument that he could not be deemed to have voluntarily retired while under suspension, clarifying that the employer-employee relationship continues during suspension. The court emphasized that the workman’s conduct clearly indicated his intention to not rejoin duty.

The court quoted from the judgment:

“A person aggrieved by the order of transfer cannot sit at home and decide on his own that the order is illegal or erroneous and he will not comply with the same. If the workman had any grievance, he could have availed of his remedy available against the same; otherwise, he was duty-bound to comply with the same.”

“His over-smartness is evident further from the contents of his letter where he claimed that as a consequence of non-payment of subsistence allowance, he had to pass his life on open road and his address for communication had been lost, thus making sure that he could take a plea that none of the communications from the Bank were received by him.”

“The aforesaid conduct of the workman itself was sufficient to non-suit him as has rightly been done. His argument that being on suspension, he could not have been treated to have been voluntarily retired as per the deeming provision, is merely to be noticed and rejected, as during his suspension also, the relationship of master and servant does not come to an end.”

Key Takeaways

• Employees cannot unilaterally decide not to comply with transfer orders.
• Prolonged absence from duty without proper authorization can lead to deemed voluntary retirement.
• Employees must avail of available remedies if they have grievances against orders.
• The employer-employee relationship continues during suspension.
• Banks can rely on bipartite agreements to deem employees voluntarily retired under certain conditions.

Directions

No specific directions were issued by the Supreme Court in this case.

Development of Law

The judgment reinforces the principle that employees must comply with lawful orders of their employers and cannot unilaterally decide to disobey them. It also clarifies that the employer-employee relationship continues during suspension and that employers can rely on bipartite agreements to deem employees voluntarily retired under specific circumstances. The ratio decidendi of the case is that an employee who fails to comply with a transfer order and remains absent from duty without proper authorization can be deemed to have voluntarily retired, especially when the relevant bipartite agreement allows for such a measure.

Conclusion

The Supreme Court dismissed the appeal, upholding the High Court’s decision that the bank was justified in deeming the employee to have voluntarily retired. The court emphasized that the employee’s actions of not complying with the transfer order and remaining absent from duty, coupled with his intention to pursue a legal career, justified the bank’s decision. This judgment underscores the importance of employees complying with lawful orders and the consequences of prolonged unauthorized absence from duty.

Category

Parent Category: Service Law

Child Categories:

• Voluntary Retirement
• Transfer of Employees
• Disciplinary Proceedings
• Clause XVI, Bipartite Agreement
• Suspension of Employees

Parent Category: Bipartite Agreement

Child Categories:

• Clause XVI, Bipartite Agreement

FAQ

Q: Can an employee refuse a transfer order from their employer?
A: No, an employee cannot unilaterally refuse a transfer order. They must comply with the order and avail of available remedies if they have grievances.

Q: What happens if an employee is absent from duty for a long time?
A: If an employee is absent from duty for a prolonged period without proper authorization, they may be deemed to have voluntarily retired, especially if a bipartite agreement allows for such action.

Q: Does the employer-employee relationship end during suspension?
A: No, the employer-employee relationship continues during suspension. All rules and regulations governing the post continue to apply.

Q: What is a bipartite agreement?
A: A bipartite agreement is an agreement between an employer and a union representing the employees, which sets out the terms and conditions of employment.

Q: What is Clause XVI of the Bipartite Agreement?
A: Clause XVI of the Bipartite Agreement deals with voluntary cessation of employment by employees. It states that if an employee is absent for 90 days or more without leave and fails to respond to a notice to join duty, the employee can be deemed to have voluntarily retired.