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Bank Employees Union v. Rajarshi Shahu Govt. Servants Co-operative Bank Ltd., Kolhapur

Civil Appeal · 2021 INSC 322Decided 6 Jul 2021
Civil Appeal No. 2328 of 2021
Justice Rohinton Fali Nariman · Justice K.M. Joseph · Justice B.R. Gavai

Background

A bank and its employees' union had twice agreed, through formal settlements in 2004 and 2010, to raise the employees' retirement age from 55 to 58: an agreement later confirmed by an Industrial Court award. When the union applied to the Labour Commissioner to formally amend the bank's "standing order" to reflect this agreed change, the bank challenged the union's right to even make such an application, arguing only an individual "employee" (not a union) could apply under the relevant law. This technical objection succeeded before the Industrial Court and the Bombay High Court.

Decision Breakdown

The Supreme Court held that implementing the settlement was a shared duty of both the bank and its employees, and the bank itself could and should have applied to formalize the agreed change: yet it never did, and instead used a technical objection to resist its own settlement. The Court found it would be unjust to let the bank escape an agreement it voluntarily entered into and ratified twice. It set aside the Industrial Court and High Court orders on this narrow procedural ground (without disturbing the High Court's other legal findings), restored the increased retirement age, and directed the bank to extend all consequential benefits to employees within six months.

Lesson Learnt

An employer cannot use a technical procedural objection about who was entitled to file an application to avoid honouring a settlement it freely and repeatedly agreed to.

Official source (sci.gov.in)View Judgment (PDF)

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