11 TH Bipartite ALL INDIA NATIONALIZED BANKS OFFICERS FEDERATION'presentation To CLC CLC

ALL INDIA NATIONALISED
BANKS OFFICERS FEDERATION’S
PRESENTATION
ON
WAGE REVISION ISSUES
TO
CHIEF LABOUR COMMISSIONER
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ALL INDIA NATIONALISED
AINBOBANKS OFFICERS’ FEDERATION
(Registered under Trade Unions Act 1926)
(Regn No: 25127/West Bengal)
C/o Canara Bank Officers’ Association, 216, Royapettah High Road, Royapettah, Chennai 14
Tele: 044- 28112454, 28113151 Email-id: ainbof@gmail.com .
STRIKE - AINBOF DEMANDS and JUSTIFICATIONS
Consequent to nationalisation of Banks, Government of India constituted Pillai

Committee to rationalize the Salary of the officers in the nationalized banks as there
was no uniformity in the salary and salary structure of Bank officers in the banks which
were nationalised. As per the Committee’s recommendations the basic pay of Scale I
officer was fixed at Rs.700/- which was the Basic Pay drawn by a Grade A Officer of
Government of India and the basic pay of Scale I officer was brought on par with
Grade A Officers.
In the subsequent bipartite settlements the parity as above was gradually reduced and
at the time of going for 11th Bipartite Negotiations the pay structure stood as below
Starting For For Difference in

Basic Pay Scale I Officer Grade “A” Officer Basic Pay
As on 01.11.2017 Rs.23700/- Rs.56100/- Rs.32400/-
IBA had, while concluding the Tenth Bipartite Settlement on 23.02.2015, introduced a
new formula at the fag end of the negotiations by restricring the load factor to 2%.
Thus after merging Dearness Allowance with old Basic Pay the increase in the new
Basic so arrived was limited to just 2%. They introduced “Special Pay” with
corresponding DA, but the same was not reckoned for Pension benefits. Thus lakhs of
people who have retired after 01.11.2012 and those who are retiring, were made to
suffer by a single act as their hard earned pension benefit got eroded.
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The Wage Revision for the Public Sector Banks was happening based on the
Profitability and Paying Capacity. As we all know, Banking Industry is cyclical in nature
and its performance is aligned with the economic growth of the country, policies of the
Government, Reserve Bank of India’s Prudential and Provisioning norms. Public
Sector Banks being the instrument to carry out the Government Schemes and pro-
public polices of the government tend to be social objective oriented than profitability
oriented.
However, this importance aspect was ignored on every occasion of Wage Revision
talks and the Bank employees were made to pay the price for that under the pretext of
Paying Capacity and profitability.
Though the Bank employees are generating sufficient profits by way of Operating
Profits which is a true measure their efficiency the same was not taken into account by
IBA every time which led to the anomaly of their salary going down in comparison with
all other sectors.
It is pertinent to mention here that till 2015, the Public Sector Banks were paying hefty
dividends with some of the banks exceeding 100%, for which Government of India
was the major beneficiary because of its majority shareholding. In December 2015
Reserve Bank of India introduced Asset Quality Review and many of the banks were
made to show loass in March 2016 which continued in the year 2017 also.
Thus before submitting Charter of Demands to the IBA, all the four officer
organisations held consultations and looked at various options to ensure better wage
revision for the Bank Officers. At that time, they came upon the Need Based Minimum
Wages formula based on the recommendations of the International Labour
Organisation and as adopted in 1957 by the Indian Labour Congress which prescribed
that the wages of a single worker should cover all the needs of a worker's family.
The same formula was also adopted by all the pay commissions in one way or other
while fixing the salary. Incidentally 7th Central Pay Commission also had used the
Aykroyd Formula which reflects the basic average cost of living in the country and
takes into consideration the changes in prices, of the commodities that constitute a
common man's basket.
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Considering the delay in negotiations and finalising the Settlements in the past, the
Department of Financial Services, Ministry of Finance, Government of India advised,
all the Banks as well as the Indian Banks’ Association, as early as in January 2016, to
initiate the process of wage revision and conclude it prior to the effective date
i.e.01.11.2017,
Accordingly AIBOC and the other three officer organisations drafted their Joint
Charter of Demands (A01) and the same was submitted to IBA during June 2017
and the demand was Need based Wages. .
The negotiations were happening not based on the Charter of Demands but on the
earlier system of percentage based formula which is not a scientific or logical method
to calculate the salary of the officers.
Meanwhile, Ministry of Labour and Employment introduced a bill in the Lok Sabha
titled “Code on Wages Bill - 2017 (A02)”. The crux of the bill was not only
amalgamating four labour laws but ensuring fair wages to employees of both
organised and unorganised sectors including those working in railways, mines, oil
field, major ports, air transport service, telecommunication, banking and insurance
company.
The bill was subsequently referred to Standing Committee of Labour and the
Parliamentary Committee held consultations with various stake holders including
Trade unions like CITU, AITUC, CITU & HMS and also State Governments for
improvements in the Bill.
In between Department of Financial Services, Ministry of Finance, Government of

India had issued an Office Memorandum 19/4/2017 - Welfare dated 06.12.2017
(A03) establishing equivalence of posts in PSUs, Banks, Insurance institutions with
posts in Central Government for establishing Creamy Layer Criteria. As per the above,
JMG Scale I of the PSBs / PFIs / PSICs will be treated as equivalent to Group A in the
Government of India.
IBA Commenced the Wage revision negotiations with UFBU on 02-05-2017 and the
Joint Charter of Demands were submitted in the meeting held on 05.06.2017 itself.
Strangely, the initial offer was made by IBA on 05.05.2018 a good one year after
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commencing the wage negotiations that is now standing at 15% but claimed by IBA as
19% in its General Notice to the public.
The parties to the bipartite negotiations deviated from the Joint Charter of Demands
submitted by the officer organisations and aggrieved by the above few writ petitions
were also filed by some individuals in the Madurai bench of High Court of Madras
seeking remedy.
Mr.S.Dhanasekar’s WP 19947/2018 (19.09.2018) (A04) prayed for Equal Pay

considering that Government of India vide its Office Memorandum 19/4/2017 - Welfare
dated 06.12.2017 has equated JMG Scale I officer to that of Grade A Officer in Central
Government while revising the income ceiling for calculating the OBC creamy layer.
Mr.Santhanapandian A., on behalf of All India Canara Bank OBC Employees Welfare
Association also filed a similar writ vide WP 21195 / 2018 (09.10.2018) (A05) seeking
equivalence of pay for all OBC employees in Banks, as benefits are likely to be
curtailed for OBC category due to this office memorandum while Salary is not given on
par with Central Government Officers. .
Mr.R.Saravanan, a non OBC officer also filed a WP 22161 / 2018 (30.10.2018) (A06)
seeking equivalence of pay for all officers and revision of pension for the retirees on
the lines of Central Government norms. They prayer to the High Court was to direct
the First Respondent viz.IBA to implement the minimum starting pay of Group“ A “
officers in Govt. Service as the minimum starting pay for all J.M.G- Scale 1 Officers in
banks by taking into account the Union Cabinet Decision notified vide their letter
No.19/4/2017 – Welfare, Government Of India, Ministry of Finance, Department of
Financial Services dated 6-12-2017 and the consequential revision of pension in
accordance with the 7th C.P.C. formula.
All India Bank Officers’ Confederation (AIBOC), one of the parties to the bipartite
negotiations filed an affidavit (A12) in the Madurai bench of High Court of Madras on
12.02.2019 supporting the Writ Petition filed by Mr.S.Dhanasekar. But went on to
negotiate on percentage terms instead of the Minimum Wages Formula demanded as
per the Charter of Demands.
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Canara Bank Officers’ Association (CBOA) an affiliate of AIBOC and AINBOF also
filed a Counter Affidavit (A13) in the Madurai bench of High Court of Madras
supporting the genuineness in the demands of the petitioner Mr.R.Saravanan.
Government of India passed the Code on Wages Act -2019 (A07) in both the houses
of the Parliament and the Act was notified in the Gazette with presidential assent on
08th August 2019.
Indian Banks Association had sent a legal circular dt.30.09.2019 (A14) to all banks
stating that it is a mere voluntary association of banks, it has not authority over banks,
it does not issue directions to banks and is a mere facilitator of common purpose of its
members and even it does not make any decision in such matters.
Mr.Pounraj, a retired Senior Manager filed a Writ Petition No.21535 / 2019 (A08)
before the Madurai bench of Madras High Court seeking direction to the DFS, Ministry
of Finance, to ensure that the 11th bi-partite negotiations by IBA scheduled on
15.10.2019 to take into consideration the Code on Wages - 2019 Act and 7th Pay
commission. His prayer was to direct the Department of Financial Service, Ministry of
Finance, to consider the Code on Wages-2019 Act in the proposed salary revision
negotiations and implement the minimum wages prevailing at the Government of
India, Ministry of Finance for the lowest grade entry level as on 01-01-2016 and as per
the 7th Central Pay Commission formula and for fixing the Bank Officer’s salary after
giving the weightage for the intervening period to take effect from 01-11-2017 and with
the proportionately higher pay for officers over and above that minimum wage also in
light of the Office Memorandm No.19/4/2017 Welfare, Ministry of Finance, Department
of Financial Services, New Delhi dated 06.12.2017.
The Honorable Court has ordered and issued notice that ―”Any result made is subject
to the outcome of the Writ petition No.21535/19” thus rendering that the judgement in
this writ holds key to the wage revision negotiations.
IBA had filed a Counter Affidavit on 27.11.2019 (A09) in the three writs stating that
they are not a legal entity and they cannot make any decisions on their own. It was
also claimed by IBA that they are merely facilitators in the Wage Revision exercise
clearly forgetting that they are the signatories to the past ten settlements and every
time they have signed on behalf of the IBA only.
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Mr.L.Alex, retired Manager of a Public Sector Bank, has filed a Writ Petition 2670 /
2020 (A10) in High Court of Madras praying to the Court to issue directions to Ministry
of Finance to confer legal status to IBA and forbear them from conducting any
negotiations or arriving at any settlement with the Unions till such time legal status is
conferred on IBA. This writ is also accepted and notice issued to the concerned so as
to avoid future legal complications thay may arise.
However, IBA continued to conduct the negotiations with United Forum of Bank
Unions even after admitting in court that it is a facilitator only and has got no legal
authority. Due to no further improvement in the wage negotiations talks, UFBU called
for strike agitational programs including strike.
AINBOF also had given Strike Notice on 13.01.2020 (A11) for two day strike on 31st
January and 1st February of 2020, three day strike from 11.03.2020 to 13.03.2020
and indefinite strike from 01.04.2020.
OPPOSING
Mergers & Amalgamations in banking sector as it is a prelude for privatization.
DEMANDING
Expeditious Wage Revision as per Minimum Wages formula adopted in CPC,

equivalent to wages paid to Grade-A officers of Central Government.
Merger of Special Pay Component with the Basic Pay
Introduction of Running Scale of Pay
Introduction of 5 day week in full
Uniform definition of Business Hours, Lunch hours etc in branches, Reduction

of cash transaction hours and Defined working hours for officers
Settlement of issues pertaining to retirees-Updation of Pension as per RBI
formula/Revision of Family Pension without any ceiling, quantum and
percentage; Medical Insurance on par with serving employees.
Exemption from Income Tax on retirement benefits without ceiling
Scrapping of NPS and reintroduction of Defined Pension Payment Scheme
Allocation of Staff Welfare fund based on Operating Profits
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1. Mergers & Amalgamations in banking sector
On 30th August 2019 the announcement on merger / consolidation of Public Sector

Banks was made. In the name of consolidation, number of Banks is being reduced.
We sincerely feel that just adding two balance sheets will not make a resultant
balance sheet stronger.
Empirical evidence suggests that, bank mergers have never been a true success. On
the contrary, Mergers and Acquisitions created huge organizations, too-big-to-manage
and have a detrimental effect on the economy as a whole.
In the name of branch rationalization, branches are bound to be closed, as is evident

from the recent announcement of the merged Bank of Baroda to close down
numerous branches of the erstwhile Vijaya Bank. The same was the case when
Associate Banks were merged with State Bank of India.
By proposing right sizing of human resources, Voluntary Retirement will be introduced

which is nothing but instigated termination of services and loss of employment to
millions who are directly or indirectly connected with the Public Sector Banks.
In addition, such a situation will create tremendous pressure on the officers and staff
who are continuing in service as they have to manage the work-load of the personnel
who retired voluntarily, also. These will have cascading effect on customer services
and deprive banking facilities to the common and needy populace.
Mergers and Acquisitions will result in the monopoly of the banking environment in the
country. Every monstrous component of monopolistic environment surfaces and
affects customers – like depriving banking next door due to closure of branches, rise
in charges and fees, fewer banks, fewer products, less competition and ultimately,
deterioration in customer service. The mergers would result in driving the loyal
customers of public sector banks into the fold of new generation private sector banks
and NBFCs, which would be inimical to the interest of the common man as they will
have to shell out more for basic banking services.
The core problem faced by the Indian banking industry is the enormous pile up of
NPAs that have accumulated on account of faulty lending practices, absence of any
effective strategy to recover the amounts from corporate houses and large borrowers
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and the volatile IRAC norms which are deliberately being changed frequently by the
regulators to ensure that PSBs do not earn net profit at all.
The much-publicized Insolvency and Bankruptcy Code (IBC) process has not
succeeded in recovering NPAs. On the other hand, it has resulted in substantial
haircuts, leading to losses for banks and undue benefits to Wilful Corporate
Defaulters. The absence of strong penal measures against the corporate wilful
defaulters and fraudsters lets them exploit inherent system weaknesses to their
advantage.
In this backdrop, the announced merger/amalgamation of public sector banks cannot

resolve or clean up the balance sheets; rather the NPAs of the merged entities would
simply add it up. The improvement in certain ratios, if any, would amount to mere
financial engineering and a mis-adventure, without resolving the actual problems.
The experience of merger of the SBI Associates with the SBI has already led to
humongous losses and NPA accumulation subsequent to merger. The results of the
combined entity formed out of merger of Bank of Baroda, Vijaya Bank and Dena Bank
for the first year of operation are yet to come.
Besides, the organizational disruption arising out of mergers would relegate every
other activity to the backstage. Banks involved have to invest their precious time to do
fire-fighting for next few years, in order to integrate personnel, processes and
procedures adversely affecting other banking activities. Mergers will result in different
classes of officers & staff within same organization.
The industrial relations within the bank are bound to affect not only the officers &
employees, but ultimately the very functioning of bank. The announcement of mergers
will in no way contribute to the ambitious $ 5 trillion economy of the government as
Public Sector Banks are expected to drive the growth engine.
In fact it would definitely derail the progress towards the target of $ 5 trillion economy
because of the reduction in the number of branches of the Public Sector Banks.
Hence, taking into consideration the overall welfare of the people of our country and
towards building a healthy economic environment, AINBOF urged that mergers,
amalgamation, consolidation and any such proposals be scrapped.
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2. Expeditious Wage revision as per Minimum Wages formula adopted in
CPC, equivalent to wages paid to Grade-A officers of Central Government
Public Sector Banks are the financial face of the Government. All the schemes
launched by the Central Government, especially the new Social Security schemes like
PMJDY, PMSBY, APY and Financial Inclusion schemes are being implemented in true
letter and spirit by the nationalised banks only.
Yet, our legitimate rights of wage revision once in five years are neglected and ignored
in the pretext of Profitability and Paying Capacity. More than a million employees
across the country and their families are waiting from November 1, 2017 in
anticipation of a decent wage revision.
The Bank Officer’s job was lucrative during 1970s and preferred by job seekers over
the Administrative Services and other Central Government Jobs. Post Nationalisation,
in the name of rationalization, Pillai Committee - 1979 recommendations was
implemented and the salary of the Bank Officers was brought down to be on par with
the salary of the Grade A Officers in Central Government.
However in the last few decades, the salary of the bank officer has gone down
drastically when compared with the salary of the Grade A officers thus defeating the
very purpose of the Pillai Committee which was constituted for the purpose of bringing
parity between the salary structure of the bank officers and the Grade A officers of the
Central Government. This has hurt the banks in many ways mainly attracting and
retaining the talented youth in the last decade.
A careful perusal of the fixation of basic pay of the bank officer and Central
Government officer will reveal the glaring injustice meted out to the bank officers.
Minimum
Basic Pay Minimum
(BP) of Basic Pay
Period of
Central Period of Bipartite (BP) of Bank Comparison of Basic
CPC
Govt. Settlements Officers Pay
Officers Rs.
Rs.
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Both are same.
III CPC
PCR 01.10.1979 700 Bank officers BP is
(1973 to 700
4th BPS 01.02.1984 1175 67.85% higher than
1985)
officers of Central. Govt.
Bank officers’ BP is
4.54% lower than
5th BPS 01.11.1987 2100
officers of Central
IV CPC
Govt.
(1986 to 2200
1995) Bank officers’ BP is
officers of Central Govt.
8.75% lower than
7th BPS 01.11.1997 7100
officers of Central
V CPC Govt.
(1996 to 8000
2005) Bank officers’ BP is 25%
8th BPS 01.11.2002 10000 higher than officers of
Central Govt.
30.95% lower than
9th BPS 01.11.2007 14500
officers of Central
VI CPC 21000
Govt.
(2006 to (15600+
2015) 5400) Bank officers’ BP is
officers of Central Govt.
VII CPC
(2016 56100 11th BPS 01.11.2017 61000 Demanded.
onwards)
Taking the above into account the Officers’ Organizations had demanded salary
revision based on the Minimum Wages principle which was accepted by the Central
Government and implemented for Central Government employees in the 7th Central
Pay Commission.
Minimum Wages Principle was accepted by the Indian Labour Conference in 1957
and it demands that an employee should be provided need based minimum wages to
cover all the needs of the family. It takes into account employee’s family requirement
for food, clothing, housing, minimum recreation and social obligations so that the
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employee be given salary matching to his status and cadre in the organization thus
enabling him to lead a healthy and a dignified standard of living.
The same principle has also been adopted by the Central Government in the recently
enacted Code on Wages Act 2019 wherein the national minimum wages remain to be
notified. However, minimum wages have been notified in the NCT region of Delhi in
October 2019.
Hon’ble Supreme Court also, in a in civil appeal by the Workmen represented by

Secretary Vs. The Management of Reptakos Brett & Co. Ltd., held in 1991 that
Minimum Wages should be based on the average price of food items and clothing
component and other prescribed percentage of components like housing, light and
fuel, children education, medical treatment, minimum recreation and social obligations.
With so many precedents available in our country and the Officers organizations
having demanded Wage Revision based on the Minimum Wages Principle for the
Bank Officers, IBA is still offering wage revision based on the quantum increase over
the existing wage bill.
The offer is also marginal only. Even after a lapse of nearly 30 months no headway is
made in the wage revision negotiations and in the last round of talks the offer by IBA
was mere 15% with a caveat of increase in basic pay restricted to 2% only.
3. Merger of Special Pay Component with the Basic Pay
At the time of signing the previous Joint Note in the year 2015, a new component in
the Pay Structure viz., Special Pay was introduced. This special allowance is not
being reckoned for the purpose of pension calculations. This has caused huge
reduction in the Pension amount for those bank employees who have retired since
2012.
Pension benefit was obtained by the Bank Employees after lot of struggles in the
1990s. However, the basic pension of a retiree remains fixed till his death. This has
led to situations where a retired General Manager is drawing a pension lesser than
that of the substaff retiring at a later date. Even after three decades, the bank retirees
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are still waiting for updation of pension i.e. revision of basic pension whenever wage
revision happens.
The above introduction of special pay has further affected the retirees as their Basic
pension is reduced. It has been held by various courts of law that Pension is not a
charity and is a deferred payment of salary.
AINBOF demands that the concept of Special Pay is to be revisited and has to be
compulsorily merged with the Basic Pay so that the Officers are not deprived of the
Pension resulting out of the said component.
4. Introduction of Running Scale of Pay
The Central Pay Commission has also vouched for the irrelevance of the stagnation
and strongly felt that the pay increase should not be stopped merely on account of
non-availability of promotions and there should be an assured increase and it is
envisaged through Minimum Assured Career Progression spanning for 40 years
spread across 11 cadres.
Besides, on stagnation, the 7thPay Commission notes, “The new pay structure has
been laid out by and large broadly as an open ended, layered matrix….. It has been
kept in view that a person should not stagnate but should have fair opportunity to
progress by dint of merit and secure better emoluments so that frustration does not set
in”.
The Government officers are getting their increments uninterruptedly whereas in

case of the bank officers the increments are linked to promotions which would
otherwise reach stagnation in case of non promotion.
The promotions and career progression are not in the hands of the young officers,
who have joined the banking industry in large numbers making up 70% of the officers
community nowadays.
The promotions purely depend on the Individual Bank’s performance and presence of
the branches which also would vary bank to bank. Hence AINBOF demands that
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Running Scale of Pay without linking to promotion should be introduced in the Bank
pay structure.
5. Immediate introduction of 5-day week in full
The four officers’ organizations have submitted a substantiated and logical reasoning
for introduction of 5 Day week Banking. Across the globe five-day week is a norm.
Even in our country, most of the progressive, forward-looking corporates,

organizations, Government and quasi-Government Organizations have been
functioning 5 days a week, which enables the officers and employees to have
balanced work life so that they are motivated and can contribute significantly.
With the focus on digital banking, Alternate channels, Internet Banking, POS facilities,
on-line payment systems have led to the augmentation of digital transactions.
As such, declaring remaining Saturdays as holidays will have no impact on the

banking system but will have constructive effect only as the officers would be in a
positive frame of mind and render their best efforts on the other working days which is
why AINBOF placed this demand.
6. Uniform definition of Business Hours, Lunch hours etc in branches,

Reduction of cash transaction hours and Defined working hours for
officers
Now, banks are conducting cash transactions till one hour prior to close of office
hours. Thus, the branches are left with only one hour to aggregate, verify and
complete the process of cash counting, re-counting and lodging into the vault.
This has a telling effect on closure of the branches for the day, elongating the working
hours of officers, constraining them to overstay in the branches. Now a very
substantial numbers of bank branches are single officer branches.
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Till the closure of cash, officers will be constrained to handle cash related transactions
and are confined to the desk, depriving of much required attention to other areas like
lending, business development and compliance related work.
With the Government push for digitalization, ATMs have been deployed in every part
of the country with high density, digital banking like internet banking, mobile banking is
occupying pivotal place in transactional banking. Further, with the propagation of
digital and electronic banking in a big way to reduce the importance and volume of
physical cash transactions, it would be in fitness of things to reduce the cash
transaction hours to 4 hours.
This will also have the following advantages:
a. Dependency on cash in the society will be reduced
b. Citizenry will adopt better and faster digital, electronic mode of banking
c. Will bring down the cost of operations of banks, paving way for reduced service
charges
d. Will bring down the cost of printing currency and its management by Reserve
Bank of India
e. Provide much needed time to operating functionaries to complete the day’s work
well on time.
f. Enable officers to engage themselves in compliances and business

development activities.
Apart from the above, each Bank has its own time of functioning and the customers
are confused with the bank timings. While the banks are supposed to work on specific
days and have common holidays, it is but logical for the public to expect that they work
on common timings too. Few banks do not even provide specific lunch timing to their
staff. To avoid confusion among the public, it is required that all banks adopt uniform
business hours including fixed and defined lunch break for the Officers.
While the office hours of banks are well defined, officers have been subjected to
unregulated working hours. Each officer in the industry is made to work unreasonably
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beyond office hours. It is an accepted international norm that one cannot work
efficiently, applying mental faculty, beyond 8 hours.
But officers are forced to work for 10-12 hours a day, exposing not only the officers to
health risks, but also multiplying the consequential operational risks to the banks.
Longer working hours have negative impact on the level of performance, quality of
decision, culture of the organization and the industry, in addition to enslaving him to
work, discarding familial and social obligations.
IBA / Government has not shown any demonstrative inclination on the issue and
hence our demand is that it should be clearly prescribed by defining Business Hours,
Lunch hours etc in branches, Reduction of cash transaction hours and working hours
for officers. Hence AINBOF demands to define the above uniformly for all Public
Sector Banks.
7. Settlement of issues pertaining to retirees - Updation of Pension as per RBI

formula/Revision of Family Pension without any ceiling, quantum and
percentage; Medical Insurance at par with serving employees
Updation of pension / Revision of Family Pension without any ceiling
Retirees of the banking Industry are in a dire situation. Their basic pay of pension is
frozen on the date of superannuation, and is never revised in subsequent Bipartite
settlements/ Joint Notes.
This has led to situations where a retired General Manager is drawing a pension
lesser than that of the substaff retiring at a later date. Even after three decades, the
bank retirees are still waiting for updation of pension i.e. revision of basic pension
whenever wage revision happens.
This is one of the worst kinds of discrimination prevailing amongst different groups of
retirees in the matter of payment of Pension. Further, the newly introduced Special
Allowance during the Tenth Bipartite Settlement does not reckon the above for
Pension calculations further reducing their pension benefits.
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Family Pension to the spouse of the deceased employee is too meagre depriving
them to lead even a minimum level of dignified life. Although Bank Pension
Regulations are framed on the lines of RBI/ Central Government Pension Scheme, no
steps have been taken to remove the discrimination in respect of updation of pension/
family pension and place it at par with RBI/Central Government employees.
Medical Insurance Scheme at par with SBI employees
Steep increase in medical insurance premium: A meaningful medical insurance

scheme needs to be introduced to take care of the ones who have contributed the
major part of their life to the Organisation. Regarding Medical facilities for the retirees
our objections have been that:
 The policies for serving employees and Retirees have not commenced from a
common date as was suggested.
 Retirees have not given multiple options to choose from i.e. coverage of Rs 1
lakh, Rs 2 Lakh, Rs 3 lakh and Rs 4 lakh to broaden the coverage of the policy.
This flexibility needs to be extended for the super top up policy also.
 The premium imposed for medical treatment in respect of officer retirees is

absolutely unfair, illogical and unacceptable. It appears that this pricing has
been fixed in such a manner so as to drive away the retirees from the purview
of the scheme. This issue requires immediate intervention and suitable
initiatives to be taken for logical reduction of premium.
 Our suggestion for lesser premium rate for single beneficiary like family
pensioners, etc. has been ignored.
 IBA should send communiqué to all Banks to subsidize/bear the Insurance

premium of Retirees as is done for EDs/MDs of Banks as most retirees are
likely to face extreme difficulty in arranging funds for the renewal.
 IBA may advise member banks to give interest free loans to retirees
recoverable in easy installments for payment of premium.
The spirit of the Department of Financial Services’ communication to IBA and Banks to
design a suitable insurance scheme to both retired and service should be interpreted
<< 17 >>
that it is a direction to extend such benefits to staff till their life time. As such viewing
retired officers / employees as a separate lot and collecting more premium from the
retirees amounts to exploitation.
Instead this should be considered as an extended benefit to the retired employees /

officers who have put in their heart and soul for the development of the Bank. It would
be more prudent, logical, legal to view the entire bank employees as one lot and
calculate the premium by carrying out an actuarial analysis instead of treating the
serving and retired as different group.
Also, with more than two third of the our bank’s workforce in the age group of below
35 years, which was not so at the time of introduction of the subject scheme, the
premium is bound to come down and there will be parity in the premium charged for
serving employees and the retired employees.
Our other suggestions were that a comprehensive affordable health care policy
covering the interest of bank men (both Serving & retirees) should be negotiated upon.
It is also suggested that instead of annual renewal, the policy should co-terminate with
the validity of wage settlement period with further provision of renewal on payment of
pro rata premium post termination of policy date and delay in finalization of future
wage accord. IBA should also approach the Ministry of Finance to exempt GST on
Banks’ health care policy being a part of staff welfare measure not strictly falling within
the definition of business transaction. IBA has not addressed the issues raised by us
and unilaterally implemented the revised scheme.
8. Exemption from Income Tax on retirement benefits without ceiling
At present the contribution towards the Provident Fund is exempt from Income Tax at
the hands of the retiring officer. Similarly Gratuity is exempt from Income Tax to a
maximum amount of Rs. 20 lakh. Encashment of the Privilege Leave is exempt from
Income Tax to a maximum amount of three lakh rupees only.
It may be observed that these amounts have accrued from the deferred amount of
salary payable to such officers. It may also be noted that all these amounts in a way
<< 18 >>
contribute to the “Internal Borrowings” to the exchequer since these amounts are
available to the Government in such a way.
Hence all the retirement benefits received at the time of retirement of an Officer should
be exempted from the purview of Income Tax. It is but natural that such a person will
continue to pay Income Tax on the income earned out of such benefits in the
consequent years.
9. Scrapping of NPS and reintroduction of Defined Pension Payment Scheme
Pension under National Payment System (NPS) is not defined and hence uncertain. In
existing Pension scheme in Banking Industry, Pension is pre-determined. But in NPS,
while contribution is determined, the return is not defined. It depends on the capacity
of the fund to generate return causing frustration amongst those who were recruited
subsequent to April 2010.
In NPS, an employee has to indicate his risk appetite at the time of joining in the fund
viz. Low risk, Medium Risk and High Risk. But as no switching is allowed, and the
performance of the fund may vary depending upon risk pattern indicated at the time of
joining, the market behaviour will determine the Pension to be received by an
employee. Further, the contribution is made @10 % of Basic Pay + DA of the
concerned employee leading to a huge accumulation of fund.
But the rate of return on any established fund sometime shows negative return over a
time horizon leading to apprehension that at the time of retirement the corpus fund
may not be sufficient to generate a pension benefit befitting the living standard at that
particular time.
Pensionary benefits are vital for leading a dignified life post-retirement and should not
be left to the vagaries of capital market. Removal of uncertainty is pre condition for
ensuring whole hearted alignment with job and for this superannuation benefit should
be defined. There has been no initiative on the part of IBA and Government to review
NPS.
10. Allocation of Staff Welfare fund based on Operating Profits
<< 19 >>
The officers of all Banks contribute their blood and sweat to bring in new business to
their respective banks and to achieve their corporate objectives. All the efforts put in
by them yield the profits for their banks.
As per the present guidelines prevailing, various provisions are being set aside out of
the operating profit earned and the net profit is arrived. Based on this net profit, each
Bank comes out with different Staff Welfare Schemes for the benefit of their staff.
It is to be noted that the officers as well as the award staff give their best to their
organization and they are responsible for the operating profit earned by their bank.
Out of the policies framed by the Government and our controllers provisioning is made
for which the officers and staff are not at all responsible. Hence, it would be logical to
meet out the expenses of the Staff Welfare Schemes from the operating profit of the
banks.
Annexures
A01 – Charter of Demands

A02 – Code on Wages Bill 2017
A03 – Equivalence of Pay – DFS Office Memorandum
A04 – Writ Petition 19947 2018
A07 – Code on Wages Act 2019
A09 – IBA Affidavit dt.27.11.2019
A11 – Strike Notice by AINBOF
A12 – AIBOC Affidavit
A13 – CBOA Counter Affidavit
A14 – IBA Legal Circular on its status
<< 20 >>
A01
Charter of Demands
<< 21 >>
Charter of Demands
submitted by
ALL INDIA BANK OFFICERS' CONFEDERATION [AIBOC]
ALL INDIA BANK OFFICERS' ASSOCIATION [AIBOA]
INDIAN NATIONAL BANK OFFICERS' CONGRESS [INBOC]
NATIONAL ORGANISATION OF BANK OFFICERS [NOBO]
To
Indian Bank Association Mumbai
on 5th JUNE 2017
The Basic principle of our wage revision should be

based on the Constitution of India which begins as,
“WE, THE PEOPLE OF INDIA, having solemnly
resolved to constitute India into a SOVEREIGN
SOCIALIST SECULAR DEMOCRATIC REPUBLIC
and to secure to all its citizens: JUSTICE, SOCIAL,
ECONOMIC AND POLITICAL; LIBERTY of
thought, expression, belief, faith and worship;
EQUALITY of status and of opportunity; and to
promote among them all FRATERNITY assuring the
dignity of the individual and the unity and integrity
of the Nation; IN OUR CONSTITUENT ASSEMBLY
this twenty-sixth day of November, 1949, do
HEREBY ADOPT, ENACT AND GIVE TO
OURSELVES THIS CONSTITUTION.”
<< 22 >>
2
<< 23 >>
Charter of Demands
Submitted by
To
Indian Bank Association, Mumbai
on 5th June 2017
<< 24 >>
INDEX
CHAPTERS Page No.
Residual Issues 1
Introduction to Charter of Demands 5
Part I Salary Revision and Allowances 23
Part II Perquisites, allowances, welfare facilities viz., leave rules, 35

the encashment, the LFC/LTC, Medical facilities etc.,
Part III The issues concerning Lady Officers. 39
Part IV Superannuation Pension, Provident Fund, Gratuity Etc., 43

including all the benefits that are to be extended to retirees
in the Banking Industry.
Part V Non monetary issues, comparable position in the 51

Government and its extension etc., issues such as the
working hours, 5 days week etc.
Part VI: General Bilateral Relationship. 55
Annexure 1. Disciplinary and Vigilance Proceedings 59
2. Note on Five Day Week 69
3. Regulated working hours 76
4. Note on LFC 78
5. Note on outsourcing 80
6. Judgement on accumulation of leave 82
44
<< 25 >>
ALL INDIA BANK OFFICERS' CONFEDERATION
ALL INDIA BANK OFFICERS' ASSOCIATION
INDIAN NATIONAL BANK OFFICERS' CONGRESS
NATIONAL ORGANISATION OF BANK OFFICERS
The Chairman 04.06.2017
Indian Banks' Association
Mumbai.
Dear Sir,
Charter of Demands
In Continuation to the gist of charter of demands submitted to IBA, we are
submitting herewith the detailed charter for your consideration.
We would like the Indian Bank Association to take into account the following:
1. Wage negotiation has to be up to scale VII as in practice based on the Pillai
Committee recommendations which introduced 7 scales.
2. The residual issues must be settled in the beginning itself before we go into the
Charter. The record note signed during the last settlement should be the basis
for this.
3. The expectation of the increasing number of youth who are joining the banks
and their aspirations should be fulfilled. They are tech savvy, they analyse the
markets trends in salary and allowances, compare with Govt Salary, RBI
Salary, LIC salary and Private Sector. So there is a need to provide better
salary and allowances to attract talents to meet the challenges and to
contribute to the growth of the nation.
4. Work life balances have to improve with the improvement in technology. So
five day week and regulated working hours are to be considered as top priority.
5. A strict time frame should be prepared and dates of next meetings should be
declared in every meeting.
6. Except one Bank there are no officer / employee Director in any of the Public
Sector Banks. This is Total violation of the law of the land. This has been an
issue in many of our agitations. The IBA should take serious efforts to clear
appointment of officer / employee directors in all the banks. Crucial decisions
including HR issues are finalised in the Banks Boards. The concept of
participatory management should be honoured.
We look forward to a Historic Settlement which will pave way for the
development of the Banking Industry and the Nation.
Your faithfully
(D.T. FRANCO) (S. NAGARAJAN) (K.K. NAIR) (Dr. S. U. DESHPANDE)

GENERAL SECRETARY GENERAL SECRETARY GENERAL SECRETARY GENERAL SECRETARY
AIBOC AIBOA INBOC NOBO
<< 26 >>
BROAD SUMMARY OF CHARTER OF DEMANDS
1. Wage revision should take into account risk, responsibility, accountability
and transferability of officers. Revised Basic Pay at par with Central
Government Officers on the same principles of 7th Pay Commission.
2. Revision of improvement in pay scales by merger of DA upto 31.10.2017.
3. Special Allowance, with DA as on 31.10.2017, to be merged with the
existing Basic Pay.
4. Revised DA formula with provision for automatic merger and improvement
in Compensation against price rise.
5. An allowance equal to amount of last drawn Increment should be granted
every year after reaching maximum in the scale.
6. Date of sanction of annual increments should be on 1st January and 1st
July every year.
7. The present embargo in regard to the sanction of stagnation increment,
automatic movement and PQP in respect of those officers who have opted
out of promotion should be removed.
8. Upward revision of HRA commensurate with market rent.
9. Substantial increase of CCA for all centres.
10. Post Allowance should be introduced.
11. Closing allowance to be enhanced and paid once in 3 months, for every
quarter.
12. Improvement in transportation of charges at the time of transfer and two
months' salary to compensate incidental expenses on transfer.
13. Payment of lumpsum amount on transfer to meet the education expenses of
children on account of transfer.
14. Review and rationalization of halting/boarding/travelling expenses/Hill area
allowance etc.
15. Introduction of incentive for rural and other sensitive/difficult areas.
16. Improvement in special area allowance and special compensatory
allowance for N.E , Jammu, Himachal and terrorist infected areas.
17. Introduction of Commercial Banking allowance as prevailing in the Reserve
Bank of India.
18. Improvement in Leave Fare Concession and monetization of LFC – The
entitlement of mode of travel should be made as air travel to all the officers,
<< 27 >>
and executive class for senior executives and restoration of LFC abroad
within domestic entitlement.
19. Special Provision for Women Employees with regards to placement and
postings, provision of crèche facility/flexi timings/work from home, child
care leave with salary as applicable in Central Government etc.
20. Introduction of 5 days Banking.
21. Working hours for officers should be defined and regulated, in terms of ILO
Norms.
22. Definition of Family should include the parents, father-in-law and mother-
in-law, brothers and sisters, divorced or deserted to be treated as members
of family for the purpose of LFC, HTC and Medical facilities. The income
criteria for dependents to be increased.
23. The Provident Fund should be at the rate of 12% of the total salary and
allowances.
24. The Gratuity should be paid at the rate of one month salary and allowance
without any ceiling.
25. Roll back to the existing pension scheme to all those who are in NPS.
26. Record note of 25.5.2015 should be implemented in Toto. Revision in
Pension, Family Pension at 30% of last drawn pay and the Principle of One
Rank One Pension
27. Encashment of entire leave at credit should be permitted on resignation.
28. Improvement in all leave facilities/introduction of the concept of leave Bank
etc.
29. Roll back of Mediclaim Insurance for serving officers and retirees, removal
of anomalies etc.
30. Review of loans and advances to staff. The Road Tax on vehicles should be
paid by the Banks on inter-state transfers.
31. Review of Disciplinary Rules Procedure. Risk allowance should be
introduced to provide cover to all the lending risks to all sanctioning
authorities at all grades.
32. Present ceiling of 3% of net profit for welfare to be increased to 3% of gross
profit without any ceiling for staff welfare activities.
33. Categorization of Branches to be done uniformly for all Banks by IBA &
RBI.
34. Massive recruitment of Officers, assistants and subordinate staff required.
<< 28 >>
8
<< 29 >>
Charter of Demands
submitted by

Before we go into the new Charter of Demands we have to first settle the issues
which are pending which were part of the record note signed along with the 7th
Joint Note.
Residual Issues viz: Record note of 25.05.2017, accountability, DA
regulation
SUPERANNUATION BENEFITS:
The improvements made in the Pension scheme in the areas like updation and
upgradation of the Pension, the rationalization of Dearness Allowance, Family
Pension etc., needs to be implemented in the banking industry as our pension
scheme amply speaks of being in the lines of central govt. pension scheme.
Constitutional Provisions and Judicial Position Article 366(17) of the
Constitution defines pension as: “Pension means a pension, whether
contributory or not, of any kind whatsoever payable to or in respect of any
person, and includes retired pay so payable, a gratuity so payable and any
sum or sums so payable by way of the return, with or without interest thereon
or any other addition thereto, of subscriptions to a Provident Fund.”
Pension has been the subject matter of a number of landmark judgements by
the Supreme Court of India in which its nature, obligations of the government
thereon and the recognition of distinctiveness in categories of pensions and
pensioners has been settled. In its judgment in D.S. Nakara and others Vs
Union of India [AIR 1983 SC 130] the Supreme Court held that a pension
scheme consistent with available resources must provide that a pensioner
would be able to live free from want, with decency, independence and self
respect and standard equivalent at pre-retirement level. It held that pension is
not an ex-gratia payment but payment for past services rendered. At the same
time in Indian Ex-Services League & Others Vs Union of India & Others [(1991)
2 SSC 104] the Supreme Court held that the decision in the Nakara case has to
be read as one of a limited application and its ambit cannot be enlarged to
<< 30 >>
cover all claims made by the pension retirees or a demand for an identical
amount of pension to every retiree from the same rank irrespective of the date
of retirement, even though the reckonable emoluments for computation of their
pension be different. In the judgement in Vasant Gangaramsachandan Vs
State of Maharashtra & Others [(1996) 10 SSC 148] Supreme Court reiterated
that pension is not a bounty of the State. It is earned by the employee for service
rendered to fall back upon after retirement. It is attached to the office and it
cannot be arbitrarily denied. In the case of petitioners who were retired Railway
employees, covered by or who opted for the Railway Contribution Fund Pension
Scheme, the Supreme Court in Krishna Kumar Vs Union of India and Others
[(1990) 4 SSC 207] averred that it was never held that both the pension retirees
and PF retirees formed a homogenous class and that any further classification
Report of the Seventh CPC 382 Index among them (viz., pension retirees and PF
retirees) would be violative of Article 14. Under the Pension Scheme, the
government's obligation does not begin until the employee retires but it begins on
his/her retirement and then continues till the death of the employee. Thus, on the
retirement of an employee, government's legal obligation under the PF account
ends while under the Pension Scheme it begins. The rules governing the PF and
itscontribution are entirely different from the rules governing pension. An
imaginary definition of obligation to include all the government retirees in a class
was not decided and could not form the basis for any classification for this case.
The 7 Pay Commission sought the views of the government in this regard. The
th
Department of Pension and Pensioners Welfare stated that the VI CPC had
recommended calculation of Pension Report of the Seventh CPC recommended
pension @ 50 percent of last pay or the average emoluments (for last 10 months)
whichever is more beneficial. The Commission also recommended delinking of
pension from qualifying service of 33 years. Effectively the dispensation on
pension has already been liberalised by the VI CPC. Further the recommendations
of this Commission in relation to pay of both the civilian and defence forces
personnel will lead to a significant increase in the pay drawn and therefore in the
'last pay drawn'/'reckonable emoluments.' Therefore the Commission does not
recommend any further increase in the rate of pension and family pension from
the existing levels. Quantum of Minimum Pension should Equal the Minimum
Wage. In representations/depositions before the Commission it has been stated
that the existing minimum pension fixed at Rs.3,500 is low and it has been argued
that minimum pension be fixed equal to minimum pay for sustenance.
The Commission sought the views of the government in this regard. The
Department of Pension and Pensioners Welfare stated that as per the orders
issued after V CPC, the minimum pension in the government was Rs. 1,275. The
normal revised consolidated pension of a pre-2006 pensioner is 2.26 of the pre-
revised basic pension. The revised minimum pension of Rs. 3,500 is much more
than 2.26 time of the pre-revised pension of Rs. 1,275. Further the
recommendations of this Commission in relation to pay of personnel will lead to a
significant increase in the minimum pay from the existing Rs.7,000 per month to
Rs.18,000 per month. This, based on the computation of pension, will raise
minimum pension from the existing Rs.3,500 to Rs.9,000. The minimum pension
10
<< 31 >>
based on the recommendations of this Commission will increase by 2.57 times
over the existing level.
In Civil APPEAL 1123 OF 2015 THE HONOURABLE Supreme Court has clearly
stated that pension is not a bounty, it should be 50% of the pay and there can be no
question of capacity to pay.
Hence we demand revision in pension, family pension and the principle of one
rank one pension. Please note that today many officers salary is less than the
pension of their parents who are Central Govt Pensioners.
GENERAL:
The voluntary retirement provided in the Officers Service Rules should be
incorporated in the Pension rules and they should also be made eligible for
Pension without any discrimination.
Pension scheme should be extended to all those who have been denied earlier on
the basis of the misinterpretation of the understandings reached with IBA
inparticular those who retired under voluntary retirement scheme as per the
service regulations / resigned after completing 20 years.
Full Pension Eligibility Period to be made 20 years.:: The full pension eligibility
period in Central Government and RBI / NABARD are now revised to 20 years.
However in Banks , full pension eligibility period continues to be 33 years. Hence
the relevant clauses in Pension Regulations to be amended to make full pension
eligibility period to be 20 years.
Pension should be revised for retirees in all Banks including SBI alongwith wage
revision as done for retirees from central government.
The officers who joined the bank between 01.11.1993 and 26.01.1996 have to be
covered under the pension regulations.
Provision of additional service as per the Pension Regulations to the extent of 5
years should be extended to each and every retirees in the banking industry.
Those having relaxation of age at the time of recruitment on account of disability
etc., also to be extended additional period of 5 years to his / her service qualifying
for pension.
Also, for Ex-servicemen their past services rendered in the Armed Force should
be added to his / her service for qualifying for pension.
Counting of Military Service Period of Short Service Commissioned Officer
joining the Bank :
Short Service Commissioned Officer are not drawing any pension for their
services rendered in Military. They are paid gratuity at the time of release from
Military. Such Officers when they join Central Government and Organisations like
RBI/ NABARD are given the option to remit the gratuity received by them to the
Employer Bank / Organisation at the time of joining so that the period of service
rendered in Military is counted towards eligibility of pension in Bank.
11
<< 32 >>
However this provision is not available to Short Service Commissioned Officers
joining Public Sector Banks.
Hence we demand that Short Service Commissioned Officers joining PSB may be
allowed to remit the gratuity received by them at the time of release from Military
so that their period of service in Military is counted towards eligibility period for
pension in PSBS. For existing Short Service Commissioned Officers who are
already in the service of the PSBs, may be given a one time option to return the
gratuity received at the time of release with simple interest @ 6 % from the date of
receipt of gratuity till date payment to the Bank for availing inclusion of Military
Service Period toward pension eligibility.
DA NEUTRALIZATION :
The Dearness Allowance should be 100% as applicable to the serving officers
which is being provided to the Central Govt retirees for pre 2002 pensioners.
FAMILY PENSION:
The Family Pension should be on par with the Government and be at 30% of last
drawn pay by the deceased officer across the board to every one. The regular
family pension will be payable till death. Up to the age of 67 years or 10 years after
death full pension should be paid.
Full Pension: If an officer dies in service at present the double of family pension is
payable for 7 years from death or upto 65 years of age the officer would have
attained which ever is earlier.
This was done when the retirement age was 58. As the retirement age is 60 now,
the age limit is to be increased to 67.
REVISION OF PENSION FOR THOSE WHO RETIRED AFTER 01.11.2012
The Special Allowance should be included in the pension eligibility for those who
retired after 01.11.2012.
Disciplinary and Appeal Rules
Considerable progress was made during the last wage revision negotiations. An
accountability policy was almost finalized. Similarly discussions took place on
other matters related to disciplinary and appeal rules. There is an increase in
cyber crime which has to be dealt with in the D & A rules clearly. Unfortunately
nothing was finalized at the last moment. We should finalise the accountability
policy and discipline and appeal rules before we proceed to the new Charter of
Demands.
12
<< 33 >>
Introduction to
Charter of Demands
PREMISE:
The Charter of Demands represents the hopes and aspirations of entire officers'
fraternity working in the Banking Industry all over the country., owing allegiance
to the All India Bank Officers' Confederation (AIBOC) All India Bank Officers'
Association (AIBOA), Indian National Bank Officers' Congress (INBOC) and
National Organisation of Bank Officers (NOBO). It is prepared on a scientific basis
taking into account salary scales for the Govt officials, private sector and present
trend in the country. The basic principles derived out of the trade unions' long
cherished policies blended with the aspirations and expectations of current
workforce in the industry which is dynamic in its metamorphosis are furnished
as below:
1. There cannot be any link to paying capacity of the banks because the gross
profit of the Banks and the business are increasing year by year due to the
contribution of the officers and employees. Net profit is down due to
mounting NPA for which the causative factors are the grim global scenario
from 2008, ever changing accounting procedure and standards,
Government and Controllers' policies and principles, Country's
priorities and preferences and certainly the officers and employees are not
responsible. Besides, the objective of wage revision must be to attract real
talents to the Industry and thus it should be constructed on factors like
RISK, RESPONSIBILITY, ACCOUNTABILITY AND TRANSFERABILITY.
2. The Pillai committee recommendations were the basic premise and
precursor to the Historical Bipartite settlements, our endeavour must be to
recall and restore the parities we enjoyed within the banking system and
also with the civil service officers
3. The practice of industry level settlement is the popular preference of the
Industry as the banking industry has many commonalities
commencing from business handling to practices adopted and it would be
matching to accepted basic principle among the WORKING CLASS that
EQUAL WORK EQUAL PAY which otherwise would lead to the
unacceptable, impracticable and divisive principle of INCENTIVE AND
PROFIT LINK. It is needless to say that any attempt to deviate from this
established principle will be an attempt to go against the interest of the
workforce in the Banking Industry who are the backbone of the Indian
economy which kept the India's prime & pride at the peak even while the
global economy was sliding down. Parity among banks is paramount for
which the industry level settlements have helped a lot.
13
<< 34 >>
4. Though the country has got similar economic environment which
commands uniform banking practices, some banks are attempting to
adopt different business standards through categorisation of branches
which denies the uniform working conditions in the branches of various
banks which again is an attempt to derail the BIPARTITE arrangement in
the industry to bring uniformity among the officers in the industry
irrespective of the status of the individual banks. Thus we may have to
bring in uniformity in the categorisation of the bank branches, keeping the
business uniformity in the Industry, which was available in the Industry till
2000.
5. The number of women officers and employees is increasing and it is
imperative that we must follow the accepted global norms in providing
conducive & comfortable atmosphere in work place in resonance with the
robust principles of gender equality.
6. It would be our endeavour to ensure uniformity in perks and facilities to the
bank officers in the Industry irrespective of business and presence.
7. The basic essence of pension as listed in the pensions regulations 1995,
section 35 (it is for employees retired between 1.1.86 & 31.10.87) and the
various court's judgements must be effected in letter and spirit as the
pension is not the gratis and it is the basic right of an officer who dedicated
his life and career for the Institution and the pension updation and
improvement in family pension must be settled.
8. Though the Indian youths entry and employment in to the Banking sector is
through common process, their placement and promotion is primarily
rested on the premise of respective Bank's presence and business which
ultimately decides the pay and perks. As the promotion and placement is
not in the hands of the large Indian youths joined in the banking industry
with huge educational qualifications and expectations, we must ensure the
running scale up to the end which would at least keep the officers morale
up.
9. The recently introduced hospitalization scheme is proved as a departure
from the agreed clauses in the joint note and ultimately a pain to both the
Banks and beneficiaries and thus we will have to rollback the present
scheme and get back to the bank level settlement of medical
reimbursement with 100% coverage for family and improved facilities.
10. We cannot deviate from the time tested practice of wage negotiation upto
Scale VII.
14
<< 35 >>
15
<< 36 >>
PREAMBLE:
The Indian Banking system is robust and has stood the test of strength. When the
country became independent the entire Banking was with the private sector and
Imperial bank of India was taking care of the government business. In 1955
Imperial Bank of India was made State Bank of India through an act of
Parliament. To improve the reach of banking to the larger masses the
Governmentnationalized 14 banks in 1969 and second batch of nationalisation
that took place in 1980. Today 70% of the banking business is carried out by the
public sector banks. Private Sector, RRBs and Cooperatives contributes the rest.
There is going to be further demands on the Bankers as the incremental deposits,
mobilized during demonetization have to be matched with adequate loans, the
targeted Mudra loans, Stand up India loans etc. The manpower has to increase
manifold and we require the best talents for the Banking Sector. Machines and
technology should support employees and not replace them in a country which
has huge unemployment.
The Indian Banking system not only grew from strength to strength but stood as
rock in the middle of the financial tsunami and continued its onward march in
rendering the economic justice to millions and millions of the people living below
the poverty line. The greatest tribute to the Indian Banking system is its resilience
and the courage to take on the Basel norms voluntarily and to meet all its
requirements to show the world that the Indian growth story is not a myth and it
has come to stay. The success of Financial inclusion including the latest effort
through the Jandhan A/cs of more than 28 crore people has opened avenue for
large scale expansion of Banking activities. The Bankers have handled the
demonetization with so much of stress and strain. The Prime Minister himself has
acknowledged that. Hence the Bankers have to be given their due share.
The efficiency of the banks have reached International standards. There is neither
complaint nor an attempt to denigrate the Indian Banks on the issue of the
ambience in comparison with the foreign and new generation private sector banks
due to the effective measures adopted by the Managements of the banks. The
banks are tech-savvy and are in a position to acquire and adapt any latest version
of the technology to match their counterparts all over the world.
Our Honourable Prime Minister stated on the performance of JANDHAN YOJANA
by the BANKS on January 24, 2015
“Dear Friends,
It gives me great pleasure to have seen the exceptional work done by you all in
ensuring the success of the Pradhan Mantri Jan Dhan Yojana. The target set for
opening bank accounts for all households has been surpassed well ahead of the
target date of 26 January, 2015. By opening 11.5 crore new accounts in a very
short span, we have achieved a coverage of 99.74% of all households in the
country. I congratulate you for your extraordinary efforts.
16
<< 37 >>
You will recall that when we started this Mission, many had doubts about our
ability to achieve this task in a limited time span of fivemonths. However, you
have proved skeptics wrong and achieved what appeared impossible. This feat
alone should motivate you, as well as others to work to make our dreams a
reality.”
Again, our Honourabe PM stated on the performance of Bank officers on the
Demonetisation at Panaji
“I publicly thank all the bank employees. The amount of work which bank
employees normally have to put in over a year, they have worked more than that in
the last one week alone,”
Modiji also reached out to retired bank officials, who according to reports on
social media, he said, had offered their services to the banks they were formerly
employed in to help deal with the workload necessitated by the demonetisation
process.
How did this transformation happen? This is mainly due to the fact that the entire
banking work force, committed to the success of the Indian Banking industry, has
given blood and sweat of their youth in ensuring the success of the banks all over
the country. They also unmindful of their personal inconvenience and discomfort
to the members of their family, have carried the banking facilities to the nook and
corner of the country ensuring Banks to be highly competitive with that of their
counter parts both inside as well as outside the country. The officers'
organisations have always supported technology introduction and upgradation.
Officer Oriented Industry
Thanks to enormous introduction of electronic gadgets in day to day banking
extensively from 2000 after SVRS, the very functions and practices in the
branches and banks have undergone a sea change, as many of the operations are
expected to be done by the customers themselves through such gadgets.But this
digitalisation has increased the role and responsibilities of the supervisors, the
officers in the banking industry and in the result,the Banking Industry has
become Officer oriented Industry where the officers have to take crucial decisions
quickly.The ratio of officers is increasing steadily. In 1991 it was 25% but today it
is almost60% in many banks. The officers have the risk of accountability. They are
the ones who have to take care of social banking. They are the ones who make
Jandhan Yojana, Mudra Loan Schemes, Stand Up India, Atal Pension Yojana and
other schemes succeed.
Digitalization
The Digital India Scheme has been largely successful in the Banking Industry due
to the officers and officers organisations. With digitization, the role and
responsibility of officers has increased tremendously and is subjected to further
acceleration leading to a less cash economy wherein the banking sector alone can
play the major role which would become the sole province of Officers community.
17
<< 38 >>
Expansion of Bank Branch Network:-
The penetration of Bank branches is low comparing to the developed and
developing countries. There is larger space available for both the Public and
Private Sector Banks to co-exist. The next few years the Banking sector is
expected to expand a lot to cater to the customers covered under the financial
inclusion and also to fulfill the ambition of the Govt to provide more credit to the
common man.
The Country is the fastest growing economy and has a demographic advantage. If
this advantage has to become a reality, the Banking Sector has to play a key role.
Hence there is a need to rope in intellectuals with good academic background as
officers by offering decent compensation, taking into account their skill, risk,
responsibility, transferability and accountability. Banking sector must be the final
destination for any jobseekers and comfort in workplace must keep up the morale
of the officers to remain in the industry for ever.
Performance of the Banking Sector in the recent past:-
The performance of the Banking Sector after the last wage revision has improved
a lot. Number of accounts have grown, deposits have grown, advances have
grown, income has grown and gross profit has grown. However the NPA has been
increasing because of our lending to infrastructure on Govt instructions, slow
down in the economy and default by big borrowers.
The Parliamentary Standing committee on finance has done a detailed analysis on
NPA and has suggested various measures and alternatives which the Government
must implement. Once that is done the NPAs will reduce and the profits will grow
up. (Report submitted in Feb. 2016)
The Committee would also like the RBI to conduct an objective evaluation
of the efficacy of different instruments / schemes implemented by banks to
deal with their NPAs / Stressed assets like OTS, CDR, SDR, 5 by 25 scheme,
ARC sale etc., so that pitfalls can be identified and plugged with a view to
making these efforts more purposeful.
RECOMMENDATIONS / OBSERVATIONS OF PARLIAMENTARY STANDING
COMMITTEE
The major recommendations are:-
1. Accountability of nominee Directors of RBI / Ministry on the Bank
Boards as well as the CMDs / MDs of banks should also be annexed in the
matter.
2. The Committee desires that the decisions taken to sanction loans in
violation of norms/guidelines should also be enquired into, responsibility
fixed, adequate penal action taken and the Committee apprised
accordingly.
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3. Further, till such time a project is commissioned as per approved
schedule, banks should not hasten to categorise such a project as NPA.
4. The extent and the quality of the equity that the promoters are capable of
infusing into a project, therefore, also needs to be factored in by a lender
bank.
5. Therefore, the Committee would recommend that the Government
should make the necessary structural changes including revival of
Development Financial Institutions (DFI) for long-term finance,
especially for Infrastructure projects, which will go a long way in
nipping the problem of NPAs in the bud.
6. The Committee also urge the Government for allowing Infrastructure
Finance Companies (IFCs) to purchase infrastructure projects turning
into NPAs and keep them as Standard Assets, as this step would not only
provide the much needed relief from stressed portfolio but also create
an enabling environment for funding the infrastructure sector facing
resource crunch. Besides, the IFCs should also be allowed to participate
in equity. The Banks should have equity component built in the loan
agreement itself. The Committee desire that the RBI should explore
the possibility of developing a mechanism wherein there would be
separate norms for NPA classification for infrastructure and non-
infrastructure loans.
7. The Committee recommends that each bank must focus on their
respective top 30 stressed Accounts involving those categorized as
"willful defaulters" and make their names public. Such a step will act as
a deterrent for other promoters against wilful defaults.
8. It will also enable banks to withstand pressure and interference from
various quarters in dealing with the promoters for recoveries or
sanctioning further loans. On the other hand, promoters will also be
cautious before applying for loans. The Committee are of the view that
when companies, which have undergone restructuring process for
their stressed loans, should be made public, there cannot be any
justification for maintaining secrecy on this count. Further, to make the
system more transparent RBI can explore the possibility of conducting
capital assessment, wherein each bank is analysed across parameters
including its loan and securities portfolios as well as other off balance
sheet commitments and their liabilities and exposures. This will help in
ascertaining their potential losses and the capacity of the bank to
absorb it while determining the CAR and its financial health.
9. The Committee are constrained to observe that the RBI does not seem to
have quite succeeded, as a regulator, in so far as implementation and
enforcement in letter and spirit of its own guidelines, on stressed loans is
concerned. Mere issuing of guidelines by RBI does not seem to have
yielded the desired results. The Committee would, therefore, expect RBI
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to monitor and follow it up with the banks and financial
institutions on a regular basis till concrete outcomes materialise. Such
a pro-active action by RBI will also enable it to review the
guidelines, whenever required and plug loopholes, if any. As the
Committee would not like the RBI to be a passive regulator, when
majorlapses occur in banks, it would be in the fitness of things if
RBI exercises its regulatory powers vis- a-vis banks to take punitive
action in cases of default and to enforce their guidelines. The Committee
also believe that RBI as a regulator should have its regulatory role
well delineated and thus not have its Director in the Board(s) of the
Banks as part of their management, as conflict of interest may lead
to avoidable laxity.
10. The Committee would thus recommend that forensic audit of such
loans (restructured loans becoming bad debts) as well as willful
defaults be immediately undertaken.
11. . Therefore, appropriate system should be evolved and guidelines be
prepared to take charge of assets and management of such failed CDR
companies, while initiating action against such management. Further,
disposal of the assets should be given priority.
12. Considering the non-efficacy of the CDR mechanism, the
Committee believes that the RBI's scheme for Strategic Debt
Restructuring (SDR), which empowers banks to take control of
defaulting entity and its assets by converting loan into equity, may
armor the banks with an additional tool to cope with their NPAs. A
change in management must be made mandatory in such cases
involving willful default or sheer inability on the part of the promoters,
where they have diverted funds and no redemption is possible. The
Committee would however like to put a caveat here that the SDR
mechanism should be used sparingly so that it does not become a
smoke screen for large scale write-offs. It is necessary that even
after SDR, the penal consequences for a wilful defaulter should
continue to operate.
13. The Committee note that bulk of bad loans may be linked to firms that
are struck with over-capacity and weak demand and are, therefore,
simply unable to service their debt. The prolonged slowdown in the
economy has eroded the market for distressed assets so much so that
even Asset Reconstruction Companies (ARCs) have found it hard to off
load them. The Committee would, however, still suggest that the RBI
should consider such a dispensation that allows banks to absorb their
write-off losses in a staggered manner, can help them restore their
balance sheets to their normal health, while ridding the banking sector of
its toxicity.
14. The Committee notes that the value of cases relating to bad loans
awaiting resolution and recovery through DRTs across the Country has
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touched an all time high of around Rs. 3.75 lakh crore. The recovery of
NPAs through DRT and SARFAESI Acts have shown steady decline from
2010-11 through 2013-14. The recovery through the channel of DRT Act
has shown constant decline from 21.55% in 2010-11 (Amount
recovered Rs. 2,338 crores against cases filed for the amount of Rs.
10,849 crores) to 9.83% in 2013-14 (Amount recovered Rs. 4,460 crores
as against cases filed for the amount of Rs. 45,350 crores). Similarly,
under the SARFAESI Act, the recovery ofNPAs has dipped from 36.46% in
2010-11 (Amount recovered Rs. 7,928 crores against cases filed for the
amount of Rs.21,745 crores) to 25.56% in 2013-14(Amount recovered Rs.
22,178 crores against cases filed for the amount of Rs. 86,783 crores).
These facts thus present a rather dismal picture of the actual working of
DRTs and the efficacy of the SARFAESI Act per se. Time-bound disposal
of cases thus becomes the need of the hour. A distinction now needs to be
drawn between "wilful defaulters" and other defaulters in the
procedures prescribed under the relevant Acts and accordingly,
"willfully defaulting" promoters must be dealt with sternly and
promptly. Banks must be fully empowered to recover their dues promptly
after necessary orders are passed by the Tribunal. The Committee would
strongly recommend a thorough overhaul of the legal regime
governing debt recovery, which may include stringent provisions to
safeguard public money. Furthermore, there is a need for authentic and
large Credit data base including posting the Credit Status of "wilful
defaulters" in public domain.
In this connection, the Committee would also recommend certain specific
changes / amendments in the Debt Recovery dispensation as mentioned below:
I. In DRT summary procedure should be followed. In case of appeal against
the order of recovery officer a provision for deposit of substantial amount
i.e. minimum 50% of the amount claimed and costs should be there
II. A provision for disclosure of assets on affidavit by the defendants needs to
be incorporated.
III. The important issue of priority of charge should be clearly decided.
In this regard, priority of secured creditor should be treated to be of
universal priority.
IV. Rule 9 of Security Interest Rules provides for 30 days' notice required
before sale. In case of second or subsequent sale, 30 days'notice,
again, is a wasteful exercise. Therefore, a specific provision is required
on subsequent attempt of sale by giving notice of 7 days. In case of sale
by Private equity provision is required stating that private sale shall
be on terms settled between the secured creditor and the purchaser.
V. Stays/Exparte stays, if granted, should be for a short and specific period
and on condition of payment of dues or as warranted as per the facts of the
case.
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VI. Provisions for faster foreclosure of mortgages need to be considered.
VII. More DRTs for better distribution and expeditious disposal of cases
should be set up and adequate infrastructure provided to them.VIII. One
DRT/Presiding Officer should have a prescribed maximum of only 1000
OAs for disposal.
It is imperative that the Govt and IBA should take concrete steps on the
recommendations and also request the RBI to implement the recommendations.
This will lead to a turnaround in the Banking Industry. There will not be any need
for infusion of further capital and the profitability will improve tremendously.
It may be inferred from the above that the law makers of this country are having
diagonally opposite but very objective views on the NPA contrary to the views held
by the Government and controller attempting to blame the BANKS squarely and
be held responsible for the NPA.
OPPORTUNITY COST OF GOVERNMENT DIRECTED SCHEMES

It is needless to reiterate the role of banks in ensuring the financial stability in the
country and its role in executing the various promotional or poverty alleviation
programs which has consistently improved standard of living of the downtrodden
in India.
Many of the developmental programmes like, yesteryears' IRDP, 20 POINT
PROGRAM. SEEUY, SEPUP or contemporary JANDHAN yojana, PMEGP,
STANDUP, MUDRA LOANS AND DEMONETISATION etc were successfully
executed by the BANKS. But the costs borne by the BANKS in making the
programs successful were enormous which never has been compensated by any
of the implementing agencies.
When the Government speeded up financial inclusion, it is this banks which have
opened more than 28 crore Jandhan accounts and are in the process of giving
credit. Again bulk of the Mudra loans and Stand up India loans are sanctioned by
the public sector banks only. Even in the Swatch Bharat campaign lot of school
toilets have been constructed by these banks. Considering the demographic
advantage these banks are providing loans to students for their education.
These opportunity cost in the implementation of the Govt sponsored schemes
should be kept in mind while arriving at wage revision. The man hours spent on
the implementation should be counted and monetized.
The work undertaken during the demonetization and the huge expenditure
incurred should be monetized and the Govt should allot adequate funds for the
Banks. It can be in the form of capital or reimbursement of expenses.
We detail below the achievement of Jandhan Yojana.
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Accounts opened as on 17.05.2017
(all figures in crores)
Bank Name RURAL URBAN TOTAL NO. OF AADHAAR BAL IN

RUPAY SEEDED ACCOUNTS
CARDS
Public Sector
Bank 12.57 10.45 23.02 17.84 15.45 50519.75
Regional Rural
Bank 3.98 0.71 4.69 3.54 2.89 11780.21
Private Banks 0.56 0.38 0.94 0.86 0.45 2064.95
Total 17.10 11.53 28.63 22.24 13.95 64364.91
Source: www.pmjdy.gov.in
COMPENSATION SYSTEM TODAY
The process of wage revision must be a honest attempt to offer the replies to the
primary questions flashed which are listed as follows:
Whether the compensation system is scientifically designed and match
these developments witnessed in the industry?
Whether the compensation ensures the officers to lead a decent quality of life?
Whether the compensation syncs with the academic qualification at the outset
and the risk, responsibility, accountability and transferability an officer
encounters in the working atmosphere?
Whether the compensation generates the sense of pride and belongingness
towards the job entrusted and the Institution employed?
Whether the compensation generates the confidence on the future?
The fundamental conditions to consider for a fair wage hike for officers are on
account of responsibility, accountability, risk and transferability. Further the
principles upheld by the judiciary are: Equal pay for equal work, gender equality
and the uniform perks and facilities to all officers in the Banking Industry. The
Branch Categorisation norms which was more or less uniform in all Banks slowly
started drifting and today Individual bank boards decide norms causing lot of
frustration in the minds of officers as a whole.
But unfortunately we observe and are concerned that there is a wide gap between
the hopes and aspirations of officers and the Options and offerings of the IBA.
A sincere attempt to all stake holders to bridge this gap in the ensuing wage
revision/service condition would only be remaining as a spring board to take the
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Indian banking system today dominated by the aspiring youth to new zenith.
BASIS FOR THE CHARTER. Before we proceed to present our Charter of
Demands for the 8th Joint Note exercise let us take a close look at the job market,
the compensation environment prevailing with the peers of the Public Sector, the
owner himself i.e. the Government and above all the new sectors of the economy,
the Private Sector, as proper assessment and justification for the Charter of
Demands.
The Basic principle of our wage revision should be based on the Constitution of
India which begins as, “WE, THE PEOPLE OF INDIA, having solemnly resolved to
constitute India into a SOVEREIGN SOCIALIST SECULAR DEMOCRATIC
REPUBLIC and to secure to all its citizens: JUSTICE, SOCIAL, ECONOMIC AND
POLITICAL; LIBERTY of thought, expression, belief, faith and worship;
EQUALITY of status and of opportunity; and to promote among them all
FRATERNITY assuring the dignity of the individual and the unity and integrity of
the Nation; IN OUR CONSTITUENT ASSEMBLY this twenty-sixth day of
November, 1949, do HEREBY ADOPT, ENACT AND GIVE TO OURSELVES THIS
CONSTITUTION.”
Seventh Pay commission- Certain important observations.
Pay commissions are appointed by the GOI headed by eminent personalities in
the field of Administration and Justice to decide the salary structure for their own
employees from the entry level of lowest cadre in the hierarchy to the level of
Cabinet Secretary – the topmost civil servant in the Govt. Setup.
The very idea of forming such commissions in a periodical interval is primarily to
carry out a holistic review on the global socio economic transformations and
relate such findings to the similar scenario of our country and suggest the
administrative reforms to attain such global standards and also to offer suitable
and acceptable compensation to the workforce who are employed to attain such
standards to ultimately compete and achieve excellence in achieving the
objectives.
Most of the recommendations of the seventh pay commission were fully accepted
by the GOI gives credentials to the methodology adopted for arriving
compensatory package for the various levels and there cannot be a second
opinion to adopt the same principle for the IBA too.
Let us quote from the Seventh Pay Commission report, which says, “What should
be the norms for governance? This has been a moot point through ages and the
norms of the governance have changed from time to time. If we go to the past
history of ancient India, we have many scriptures which have dealt with issues of
governance and those norms are also relevant in the present time. Bhagwat Gita
tackles many management issues at the grassroot level and offers feasible
solutions on the principles of value-based ethics, enlightened leadership and
human quality development. Bhagawat Geetha says Whatever action is performed
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by a great man, common men follow in his footsteps. And whatever standards he
sets by exemplary acts, all the world pursues. It is further stated in the Gita
“where there is Dharma there is victory” or, in other words, success goes hand
in hand with righteousness. Chanakya also, in his celebrated discourse
“Arthashashtra,” emphasized that the Dharma Sukti is applicable to both, a
ruler and the common man. It is necessary to follow Dharma in all walks of
human life. Therefore, if we have a dedicated bureaucracy, then they will
provide a good leadership and good governance”.
Bank officers are much more dedicated and perform duties with greater risk and
accountability. So the salary should be commensurate with the risk and
responsibility.
The Seventh Pay Commission also says that, “In this 21st century, the global
economy has undergone a vast change and it has seriously impacted the living
conditions of the salaried class. The economic value of the salaries paid to them
earlier has diminished. The economy has become more and more consumer
economy. Therefore, to keep the salary structure of the employees viable, it has
become necessary to improve the pay structure of their employees so that
better, more competent and talented people could be attracted for governance.”
The Seventh Pay Commission has done exhaustive studies as seen below; “To
gain insight into the principles of emoluments, workshops were organized in
association with IIM, Bangalore, Administrative Staff College of India,
Hyderabad and SVP National Police Academy, Hyderabad. The local country
office of the World Bank was requested to provide inputs on best global
practices in remuneration. The World Bank team made several presentations
on relevant subjects, viz., international trends in public sector pay, allowances,
pension etc.”
“The expectation of employees in Government will be similar to ours that, “The
key expectation of employees at all levels is that there should be a significant
increase in their pay and improvement in other facilities.
“Representatives of some of the recognized organizations have staked their
claims for grant of a pay structure comparable to that of the private sector. At
the core of this demand is the economic development, the country has
witnessed in recent times, resulting in the avenues for talented young persons
having opened up; several of them are being employed by the private sector for
emoluments much higher than in the government sector.
The Commission bestowed its best of consideration and has dealt with all the
issues in appropriate chapters. It may be observed at the outset that
government service is not merely a contract service, it provides a status in
society which cannot be monetized in terms of money value.
The focus for the Commission was that emoluments should be such which
attract the right kind of talent by a transparent method, keeping in mind the
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financial limitations of the government. The attempt has been to provide wages
commensurate with comfortable living. The pay structure should also need to
address any significant deterioration in real value of emoluments as a
consequence of inflation.”“One should get proper and adequate
compensation for his merit. The increase in pay structure cannot keep pace
with the market forces, at the same time it should not be so unattractive that
talent is not attracted to government service.”
“Therefore, we have attempted a pay structure which has as its basis the
Aykroyd formula, which reflects the basic average cost of living in the
country. The attempt has been to arrive at a proper pay package so that the
essentials of life can be availed comfortably.”
The Pay Commission says “While finalizing the levels of salaries, allowances
and other perquisites of compensation structure, we have tried to take a
holistic approach. We also commissioned three studies by expert bodies
towards this end:
1. Study by IIM, Ahmedabad to understand the nature and quantum of total
compensation of select job profiles in the government sector vis-à-vis
similarly placed profiles in the CPSUs and the private sector.
2. Study by Institute of Defence Studies and Analyses on nature, quantum
and components of defence expenditure and defence pension;
3. Study by IIM, Kolkata on fiscal implications of implementation of the V and
VI CPC on the finances of the Union and State Governments.”
As the Pay Commission has adopted the principles to draw the wage structure
taking into account the salary structure of different sectors including the private
sector and the same has been accepted by GOI for implementation, the same
principles have to be followed by and for the Banking sector also.
On stagnation, the 7th Pay Commission notes,
“The new pay structure has been laid out by and large broadly as an open
ended, layered matrix, for civilians as well as for the armed forces personnel.
It has been kept in view that a person should not stagnate but should have fair
opportunity to progress by dint of merit and secure better emoluments so
that frustration does not set in.
The prevailing rate of increment is considered quite satisfactory and has been
retained. The concept of separate grade pay has been done away with and the
grade pay at all levels has been subsumed into the pay matrix. The Modified
Assured Career Progression (MACP) scheme has been further modified. It is
expected that the present formulation will address the widespread
dissatisfaction prevailing in the earlier system, in which the gain or
progression through the MACP was considered inadequate.
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The remuneration package is such that employees would feel that they are
valued and they are fairly paid and their remuneration is not less than a
person who is similarly situated in another organisation.”The Pay Commission
has also recommended that there is no need for commission once in 10 years and
it recommends as:
“It is also recommended that the matrix may be reviewed periodically without
waiting for the long period of ten years. It can be reviewed and revised on the
basis of the Aykroyd formula which takes into consideration the changes in
prices, of the commodities that constitute a common man's basket, which the
Labour Bureau at Shimla reviews periodically. It is suggested that this should
be made the basis for revision of that matrix periodically without waiting for
another Pay Commission.”
On theNational Pension System the Commission says:
“We have also kept in view the needs of the pensioners under the old pension
system, (employees who joined before 01.01.2004) and suggested some
measures to alleviate their plight. They should also not be left in straitened
circumstances.
We have suggested their proper fixation in the new pay matrix which will
provide them a respectable living. Almost the whole lot of government
employees appointed on after 01.01.2004 were unhappy with the new
pension scheme.
While the National Pension System does not form a part of our Terms of
Reference, we have recorded the sentiments of the affected employees. The
government should take a call and step in to look into their
complaints.”
The Commission also talks about salary based on the status in the society. It
says,
“As we have mentioned above, government service is not a contract. It is a
status. The employees expect a fair treatment from the government. The States
should play role model for the services. In this connection, it will be useful to
quote the observations in the case of Bhupendra Nath Hazarika and another vs.
State of Assam and others (reported in 2013(2)Sec 516) wherein the Apex Court
has observed as follows:” It should always be borne in mind that legitimate
aspirations of the employees are not guillotined and a situation is not created
where hopes end in despair. Hope for everyone is gloriously precious and
that a model employer should not convert it to be deceitful and treacherous by
playing a game of chess with their seniority. A sense of calm sensibility and
concerned sincerity should be reflected in every step. An atmosphere of trust
has to prevail and when the employees are absolutely sure that their trust
shall not be betrayed and they shall be treated with dignified fairness then
only the concept of good governance can be concretized. We say no more.”
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On issues related to vigilance and discipline the Commission says:
Lastly, we must emphasize that the government should inspire confidence in
the minds of civil servants that they will not be hounded by
unnecessary harassment by investigation agencies. The recent trend of
hounding civil servants as criminals for the failure of bonafide decisions is not
a happy one. This will discourage the bureaucracy to take bold decisions in
fear of being hounded if such a decision misfires. Any misadventure
should not be looked upon with suspicion unless it has definite criminal
intent to benefit either himself or someone else. If this trend is not checked
it will lead to disastrous consequences. The sole consideration with the
Commission was to ensure that employees do not suffer economic hardship
so that they can deliver and render the best possible service to the country
and make the governance vibrant and effective.
On Child care leave the Commission has reiterated the earlier commission's
report.
Child Care Leave: Towards this end the Commission recommends that CCL
should be granted at 100 percent of the salary for the first 365 days, but at 80
percent of the salary for the next 365 days. In making this recommendation the
Commission has also kept in mind the fact the concept of a paid (whether 100%
or 80%) leave solely for child care for a period of two years, is a liberal measure
unmatched anywhere else. The Commission notes that in the event a male
employee is single, the onus of rearing and nurturing the children falls squarely
on his shoulders. Hence extension of CCL to single male parents is
recommended. Moreover, the Commission recognizes the additional
responsibility on the shoulders of employees who are single mothers.
Accordingly, it is recommended that for such employees, the conditionality of
three spells in a calendar year should be relaxed to six spells in a calendar
year.”
“Presently 30 days EL per annum is granted to Civilian employees and 60 days
to Defence personnel. EL can be accumulated up to 300 days in addition to the
number of days for which encashment has been allowed along with LTC”
However a recent Judgement of the High Court of Punjab and Haryana, it is ruled
that no accumulated leave can lapse. Hence the present ceiling should be
removed completely.
Minimum Pay requirement calculated by 7th CPC
To estimate the minimum pay in the government, the VII Central Pay Commission
(CPC) used the norms set by the 15th Indian Labor Conference (ILC) in 1957 to
determine the need-based minimum wage for a single industrial worker. The
norms set by the ILC are as below:
A need-based minimum wage for a single worker should cover all the needs
of a worker's family. The normative family is taken to consist of a spouse
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and two children below the age of 14. With the husband assigned 1 unit,
wife, 0.8 unit and two children, 0.6 units each, the minimum wage needs to
address 3 consumption units.
The food requirement per consumption unit is shown in the Annexure to this
chapter. The specifications were derived from the recommendations of Dr.
Wallace Aykroyd, the noted nutritionist, which stated that an average
Indian adult engaged in moderate activity should, on a daily basis,
consume 2,700 calories comprising 65 grams of protein and around 45-
60 grams of fat. Dr Aykroyd had further pointed out that animal proteins,
such as milk, eggs, fish, liver and meat, are biologically more efficient than
vegetable proteins and suggested that they should form at least one-fifth of
the total protein intake.
The clothing requirements should be based on per capita consumption of
18 yards per annum, which gives 72 yards per annum (5.5 meters per
month) for the average worker's family. The 15th ILC also specified the
associated consumption of detergents, which can be seen in the Annexure.
For housing, the rent corresponding to the minimum area provided under
the government's industrial housing schemes is to be taken. The 15th ILC
kept it at 7.5 percent of the total minimum wage.
Fuel, lighting and other items of expenditure should constitute an
additional 20 percent of the total minimum wage.
The Central Pay Commission considered additional components of expenditure
to cover for children's education, medical treatment, recreation, festivals and
ceremonies. This followed from the Supreme Court's ruling in the Raptakos
Brett Vs Workmen case of 1991 for determination of minimum wage of an
industrial worker. The Supreme Court had prescribed this amount at 25
percent of the total minimum wage calculated from the first five components.
However, in considering this additional component the VI CPC took note of the
educational allowance and medical facilities being provided by the
government.
After considering all relevant factors the Commission is of the view that the
minimum pay in government recommended at Rs.18000/- per month, w.e.f.
01.01.2016, is fair and reasonable and one which, along with other
allowances and facilities, would ensure a decent standard of living for the
lowest ranked employee in the Central Government
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Minimum Pay calculated by 7th CPC on the following parameters
Price/
Per day Per month Unit Expenses
PCU Unit 3 PCU Unit (Rs.) (Rs.)
1. Rice/Wheat 475 gm 42.75 kg 25.93 1108.30
2. Dal (Toor/Urad/Moong) 80 gm 7.20 kg 97.84 704.44
3. Raw Vegetables 100 gm 9.00 kg 58.48 526.28
4. Green Vegetables 125 gm 11.25 kg 38.12 428.85
5. Other Vegetables 75 gm 6.75 kg 32.80 221.42
6. Fruits 120 gm 10.80 kg 64.16 692.93
7. Milk 200 ml 18.00 litre 37.74 679.26
8. Sugar/Jaggery 56 gm 5.04 kg 37.40 188.48
9. Edible Oil 40 gm 3.60 kg 114.02 410.46
10. Fish 2.50 kg 268.38 670.95
11. Meat 5.00 kg 400.90 2004.51
12. Egg 90.00 no. 4.27 383.98
13. Detergents etc Rs./month 291.31 291.31
14. Clothing 5.50 meter 164.88 906.83
15. Total (1-14) 9217.99
16. Fuel, Electricity, Water Charges 2304.50
17. Total-(15) divided by 0.8 11522.49
18. Marriage, Recreation, Festivals, etc. 2033.38
19. Total-(17) divided by 0.85 13555.87
20. Provide for Skill by adding 25% to (19) 3388.97
21. Sum (19+20) 16944.84
22. Housing @ 524.07
23. Total-Divide no.21 by 0.97 17468.91
24. Step up of 3% on No.23 as DA is projected at 125% on 01.01.2016 524.07
25. Final Minimum Pay as on 01.01.2016 (23+24) 17992.98
26. Rounding off 18000.00
Thus we shall also follow the principles of VII pay commission in fixing
minimum salary, of course to be calculated as on 1st November. 2017 after
adding the cushion discounted by the pay commission to the Government
employees for the “ STATUS” they enjoyed and also after adding the additional
cushion for the RISK, RESPONSIBILITY, TRANSFERABILITY AND
ACCOUNTABILITY the bank officers are subjected to, in the same ratio fixed
between the employees and officers,
We have to take into account the inflation projected for Nov,17.
We shall also uphold views expressed in offering the running scale without
stagnation and also in scrapping the NPS.
(Paragraphs in italics are verbatim reproduced from 7th pay commission
report)
With this background let us now go into our detailed Charter of demands.
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PART - I
SALARY & ALLOWANCES

31
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32
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Part I
Salary Revision and Allowances
OBJECTIVE
The remuneration package of the Bank officers needs to be framed in such a

manner that officers would feel that they are valued and fairly paid considering
their work load and undertaking of enormous risks and responsibilities. They
should be treated at par with Government officials and PSU officers. As stated in
the 7th Pay Commission Report the status of an officer in the society should also
be taken into account while fixing the salary.
Remuneration of officers is an important element of proactive functioning in
Banks in this era of competitive scrimmage and their commitment, dedication
and hard labour towards the progress of the economy of the country. In general,
the level and structure of salary / remuneration / compensation should aim to
achieve four objectives as under:
(i) Salary Structure should be sufficient to attract and retain quality officers.
(ii) Salary Structure should motivate officers to work hard.
(iii) Remuneration should induce other human resource management
reforms.
(iv) Salary should be set at a level to ensure relativity with minimum salary in
Banks and officers' initial pay in line with compression ratio, as shown
below, of Central Government Group A officers' initial pay and their
minimum pay of Group D employees.
(v) Salary should take into account the Risk, Responsibility, Accountability
and also the Transferability of Officers.
(vi) The Bank Officers have a status similar to the Govt Officials and to
maintain that status the salary should be adequate, by offering additional
cushion.
(vii) As promotions depend only on vacancies which depends on the presence
and business of the individual banks nobody should be allowed to
stagnate and running scale should be introduced.
(viii) The anguish, agony and the aspirations of lady officers should be taken
into account
(ix) Superannuation benefits should help one to live a respectable life after
retirement
(x) The hardwork and contribution of the bankers for the development of the
economy should be acknowledged through decent salary hike and
allowances.
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Table: 1
Compression ratio of minimum Basic Pay of Group D employees and Group A
officers under different Pay Commissions of Central Government.
Cen tra l Pay Minim u m Ba sic M inim um B asic P ay C om p ressi

C ommission Pa y (G roup D) of O fficer G ra de on R atio
R s. ( Gr oup A)
Rs.
III C PC ( 197 3 to
19 85) 196 70 0 1: 3.57
IV C PC ( 198 6 to
19 95) 750 2 200 1: 2.93
V C PC (1 996 t o
20 05) 255 0 8 000 1: 3.13
VI C PC (20 06 to 7 000 ( Ba nd 21 000 (B an d Pa y 1: 3
20 15) P ay 520 0 + 1560 0 + G ra de P ay
G ra de Pa y 54 00)
180 0)
VII C PC (20 16 1 800 0 56 100 1: 3 .1 1
onwa rd s)
Table: 2
Compression ratio of minimum Basic Pay of Sub-Staff and
Officer Grade under different Bi-partite Settlements in Banks
Bi-partite Settlements Minimum Minimum Basic Compressio

Basic Pay Pay of Officer n
(Sub-Staff) Grade Ratio
Rs. Rs.
2 nd Bipartite 116 500 (01.01.1970) 1: 4.31
(01.01.1970)
3r d Bipartite 245 700 (01.10.1979) 1: 2.85
(01.09.1978)
4 th Bipartite 430 1175 (01.02.1984) 1: 2.73
(01.07.1983)
5 th Bipartite 815 2100 (01.11.1987) 1: 2.57
(01.11.1987)
6 th Bipartite 1600 4250 (01.11.1992) 1: 2.65
(01.11.1992)
7 th Bipartite 2570 7100 (01.11.1997) 1: 2.76
(01.11.1997)
8 th Bipartite 4060 10000 1: 2.46
(01.11.2002) (01.11.2002)
9 th Bipartite 5500 14500 1: 2.63
(01.11.2007) (01.11.2007)
9 th Bipartite 5850 14500 1: 2.47
(01.05.2010)
10t h Bipartite 9560 23700 1: 2.47
(01.11.2012) (01.11.2012)
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We insist that the anomaly created in the last wage revision by providing special
allowance with DA instead of Basic Pay has to be rectified this time. The merger of
special allowance and DA with the Basic Pay has been done already for LIC
Officers and RBI Officers.
A standardization of salary and allowances for Bank staff has been done by a
Committee famously known as the Pillai Committee which gave certain
recommendations in 1974 which were further discussed and rationalized and
implemented in 1979.
Pillai Committee had taken into account the guidelines of UN publication,
handbook of Civil Service Law and practices 1966, which mentioned 3 major
requirements of sound pay structure viz..inclusiveness (pay structure in relation
to other sectors of economy) comprehensibility (an easy quick picture of gross
emoluments) and adequacy (to attract right type of persons and retain them).
The Pillai Committee added 2 more viz.. rationality (functions and responsibility
of posts ) and career planning.
It said in view of the importance of the national approach to wage problems we
consider it necessary to make the pay structure in nationalized banks broadly
similar to that obtaining in the State Bank Group, in the Central Government and
in Public Sector undertakings (Para 5-2, vii)
The committee also said, “ If the objective of attracting the best talent in the
country is to be achieved, the pay of the bank officers at the entry level
should not be anything less than that obtaining in Class I services and Public
Sector industries” (Para 5-10)
The Parliamentary Committee on Subordinate legislation in its 141 report has
also endorsed these principles.
However between 1979 and now there is a huge downward trend in the Bank
Officials salary which has to be rectified now.
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Table: 3
Comparative analysis of minimum Basic Pay
between Central Govt Officers Group A and Bank Officers.
Period of CPC Minimum Period of Bipartite Minimum Comparison of

B.P. of Settlements B.P. of Basic Pay
Central Bank
Govt. Officers
Officers Rs.
Rs.
III CPC (1973 700 PCR 01.10.1979 700 Both are same
to 1985) 4 th BPS 01.02.1984 1175 Bank officers BP is
67.85% higher
than officers of
Cent. Govt.
IV CPC (1986 2200 5 th BPS 01.11.1987 2100 Bank officers’ BP is
to 1995) 4.54% lower than
officers of Cent.
Govt.
6 th BPS 01.11.1992 4250 Bank officers’ BP is
93.18% higher
than officers of
Cent. Govt.
V CPC (1996 8000 7 th BPS 01.11.1997 7100 Bank officers’ BP is
to 2005) 8.75% lower than
officers of Cent.
Govt.
25% higher than
officers of Cent.
Govt.
VI CPC (2006 21000 9 th BPS 01.11.2007 14500 Bank officers’ BP is
to 2015) (15600+ 30.95% lower than
5400) officers of Cent.
Govt.
12.85% higher
than officers of
Cent. Govt.
VII CPC (2016 56100 11 th BPS 01.11.2017 61000 Bank officers’ BP is
onwards) (Proposed) 8.73% higher than
* Govt pay officers of Cent.
scale of Govt
56100 is
based on
DA
1.1.2016
whereas we
are
proposing
DA merger
on
31.10.2017
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PERIOD % of increase of B.P. of PERIOD % of decrease of B.P. of Bank
Bank officers’than officers than Central Govt
Central Govt. Officer Officers
01.02.1984 67.85% 01.11.1987 4.54%
01.11.1992 93.18% 01.11.1997 8.75%
01.11.2002 25.00% 01.11.2007 30.95%
01.11.2012 12.85%
01.11.2017 8.73%
To be (Proposed)
discussed
The above table only establishes the gradual erosion in minimum Basic Pay of
Bank Officers in comparison to Central Government Officers with the passage of
two decades.
Table: 4
Comparison of minimum salary of Bank Officers with that of minimum salary of
Clerical and Subordinate staff of Bank since 6th Bipartite Settlement to 10th
Bipartite Settlement
Date Subordinate Staff Clerical Staff Officer cadre
Period Basic DA Total % of Basic DA Total % of Basic DA Total % of

Pay increase Pay increase Pay increase
31.10.1992 815 748 1563 __ 900 826 1726 __ 2100 1928 3928 ----
(91.79%) (91.79%) (91.79%)
01.11.1992 1600 62 1662 6.33 1750 67 1817 5.27 4250 164 4414 11.43
6th Bipartite (3.85%) (3.85%) (3.85%)
31.10.1997 1600 829 2429 ----- 1750 907 2657 ----- 4250 2202 6452 ------
(51.80%) (51.80%)
01.11.1997 2570 130 2700 11.15 3020 152 3172 19.38 7100 358 7458 15.59
7th Bipart ite (5.04%) (5.04%) (5.04%)
31.10.2002 2570 993 3563 ___ 3020 1167 4187 ___ 7100 2743 9843 ____
(38.64%) (38.64%) (38.64%)
01.11.2002 4060 168 4228 18.66 4410 183 4593 9.69 10000 413 ** 10413 5. 79
8th Bipart ite (4.14%) (4.14%)
31.10.2007 4060 1199 5259 ____ 4410 1302 5712 ____ 10000 2952 12952 ____
(29.52%) (29.52%) (29.52%)
01.11.2007 5500 396 5896 12.11 6200 446 6646 16.35 14500 1044 15544 20.01
9th Bipart ite (7.2%) (7.2%) (7.2%)
31.10.2012 5850 4107 9957 ____ 7200 5054 12254 ____ 14500 10179 24679 ____
(70.20%) (70.20%) (70.20%)
01.11.2012 9560 1042 10602 6.47 11765 1282 13047 6.47 23700 2583 26283 6. 49
10th Bipartite (10.9%) (10. 9%) (10.9%)
25537 (including SA)

** For Pay upto Rs.9650 --- 0.18% per slab i.e. 4.14%
From Rs.9651 to Rs.15350 --- 0. 15% per slab i.e.3.45%
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Salient features of above table no.4
Item no.1
Sub-Staff Salary Officer Salary Comparison
On 01.11.1992 Rs. 1662 Rs. 4414 Officer salary 165.58% higher
On 01.11.2002 Rs. 4228 Rs.10413 Officer salary 146.28% higher
On 01.11.2012 Rs.10602 Rs.26283 Officer salary 147.90% higher
Item No.2
Clerical Salary Officer Salary Comparison
On 01.11.2012 Rs.13047 Rs.26283 Officer salary 101.44% higher
Item No.3
Officer Salary Officer Salary % of increase
on 31.10.2007 on 01.11.2007 on 01.11.2007
Rs.12952 Rs.15544 20.01%
Item No.4
Officer Salary Officer Salary % of increase
on 31.10.2012 on 01.11.2012 on 01.11.2012
Rs.24679 Rs.26283 6.49%
It is also necessary to see that the decrease in the increase of salary over a period in
relation to the subordinate staff and clerical staff also should be arrested in this wage
revision.
Table No. 5
Comparison of Basic Pay of Bank Officers and Officers of Life Insurance Corporation
of India
BANK OFFICERS LIC OFFICERS

Date of effect Basic Pay Date of effect Basic Pay
01.11.1992 4250 01.08.1992 4250
01.11.1997 7100 01.08.1997 7535
01.11.2002 10000 01.08.2002 11110
01.11.2007 14500 01.08.2007 17240
01.11.2012 23700 01.08.2012 32795
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Date Bank DA Merging of CPI Date LIC DA Merging of CPI
01.11.2007 2836 7.2% 01.08.2007 2944 3.15% as on 01.11.2007
01.11.2012 4440 10.9% 01.08.2012 4708 1.68% as on 01.11.2012
Comparative Salary of officers of Bank and LIC as on 01.11.2007 and

01.11.2012 at entry level
Date Bank Officers LIC Officers
B.P. D.A. Spl. Total B.P. D.A. Total Difference LIC officers
Allow salary is
4 higher by
1 2 3 5 6 7 8
9 (8-5)
01.11.2007 14500 1044 ------- 15544 17240 543 17783 2239 14.40%
(7. 2%) (3.15%)
01.11.2012 23700 2583 1837 28120 32795 551 33346 5226 18.58%
(10.9%) (1.68%)
From the above analysis it is clearly evident as under:

 As on 01.11.1992 the Basic Pay of officers of Bank and LIC at entry level
were same.
 As on 01.11.2007 LIC officers were getting 14.40% higher salary than Bank
officers.
 As on 01.11.2012 LIC officers were getting 18.58% higher salary than Bank
officers.
So, it is crystal clear that the Bank Officers' salary is drastically being reduced
gradually resulting in erosion of wage in comparison to LIC officers. In the same
principle of the Pillai Committee recommendation, Bank officers salary should be
at par with the Govt as well as LIC Officers.
An important point to note

Of and on it comes for discussions while salary of Central Govt employees gets
revised at 10 years interval, Bank employees' salary is being revised at 5 years
interval. Let us analyse, as under, that despite salary revision at 5 years interval
how salary of Bank officers is lagging behind during last 23 years duration in
comparison to salary of Central Govt Officers Group- A at entry level onwards.
Please also note that 7th Pay Commission has recommended that without waiting
for next pay commission the salary should be revised based on the data given by
Simla based Labour Bureau.
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Central Govt Officers Group Bank Officers
Date Central Govt. Officer Group A Bank Officers
A
Basic Grad D.A. Total Basic Special D.A. Total Difference
Pay e Pay Pay Allow Rs.
01.11.1992 2200 ----- 1826 4026 4250 ------- 164 4414 388 (Salary
(83%) (3.85%) of Bank
officers was
higher by
9.63% )
01.11.2012 15600 5400 15120 36120 23700 1837 2784 28321 7799
(72%) (7.75%) (10.9%) (Salary of
Bank
officers was
lower by
27.53% )
01.01.2016 56100 ------ ------ 56100 23700 1837 10164 35701 20399
(39.8%) (Salary of
Bank
officers was
lower by
57.13% )
From the above table it is evident as under:

 From 01.11.1992 to 01.01.2016 the salary of Central Govt Group A officers
has been increased by 1293.44% (56100--4026=52074/4026 X 100) at
entry level.
 From 01.11.1992 to 01.01.2016 the salary of Bank officers has been
increased by 708.81% (35701—4414=31287/4414 X 100) at entry level.
Moreover the 7th Pay Commission has recommended that there is no need for a
commission once in 10 years. It has recommended that based on the Labour
Bureau reports the increase can be done periodically.
Salary in Reserve Bank of India
 In case of RBI officers, the starting basic pay which was Rs 17100 has been
increased to Rs 28150 and at entry level. They also get a local allowance of
5% of pay, family allowance of 4% of Pay, Grade allowance of Rs.6000 and a
special allowance of Rs.6000 (Rs.1625 for those who joined in 2016) which
is eligible for DA. So their salary structure is much superior to other bank
officers.
NEW GENERATION PRIVATE SECTOR
There is a sea of difference in the emoluments between the new generation Private
Sector Banks / Foreign Banks and the Banking Industry covered by the IBA. These
Banks adopt the compensation system that is prevailing in the new sectors of the
economy on the plea of attracting the best talent in the financial sector. The same
is true in the case of Public Sector and old generation banks as well. The
competitive environment is such that the performance of the New Generation
Private Sector Banks is always quoted as a model for others including the
Oldgeneration Private and Public Sector Banks, whenever the issue of
compensation in comparison with them is raised. The efficiency parameters are
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similar and hence the factors of compensation system prevailing in the New
Generation Private Sector and Foreign Banks should be extended to all Bank
Employees as well. They have lunch allowance, huge entertainment allowance
and also many of the allowances are tax free as the Bank pays the tax.
What is important is that the Asst. Managers in these Private Banks are only
doing clerical job and the comparison of our pay should be compared with the
Dy. Manager of these Private Banks with our Asst. Managers. Many in Govt.
and Banks Board bureau are making statement without understanding the
reality.
**The salary & allowance and service conditions should be made applicable
automatically to Officers serving Regional Rural Banks
Pay Scales
The pay scales will be arrived at based on the above principles discussed.
Merger of Pay Scales
The present 7 Scales be reduced to two scales.
No1. Scale 1- Manager Grade – Integeration of presene Scale I to IV
And Scale II – Executive Grade – Integration of Scale V , VI & VII
Dearness Allowance
Since the entire D.A. outstanding as on 31.10.2016 is to be merged with the
existing Basic Pay, the percentage of revised D.A. as on 01.11.2017, for every rise
or fall of four points of index on the quarterly average of D.A. over and above
November 2016 index should be recalculated @ 0.07% per slab of 4 points.
House Rent Allowance
In view of the fact that nearly 60% of officers have been staying in leased houses /
flats of banks, increase in the percentage of H.R.A. will not extend them any
benefit of salary increase, on the contrary they will have to suffer more loss for the
same leased house / flat. Hence, existing percentage of HRA should be retained
without any change and thus, lesser amount of allocation towards HRA out of total
amount to be allotted for wage revision can be diverted in other areas where from
all officers can be benefitted. Alternatively, self leasing of own houses should be
permitted to avoid the huge disparity under the present dispensation of capital
cost.
CITY COMPENSATORY ALLOWANCE
The existing classification of centre should be reviewed classified in the following
categories:-
CATEGORY CENTRE
I Major Metro Kolkata, Delhi,Mumbai, Chennai,
Bangalore, Hyderabad, Ahmedabad,
Pune, etc.,
II Metros (Area I) All centres with more than 12 lakh
Population and State Capitals
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III Centres with population of 1 lakh and above and all District Head quarters
RATES OF CITY COMPENSATORY ALLOWANCE:
Category I - 20% of Basic Pay
Category II - 17.5% of Basic Pay
Category III - 15% of Basic Pay
F.P.P.: It should be the last increment without any ceiling.
PQP : For completion of Part I JAIIB and Part II CAIIB, one and two increments are
to be considered instead of consolidated amount as in the past. The present
embargo on non payment of PQP and FPP should be removed.
FIXATION OF SALARY OF CENTRAL PARA MILITARY PERSONNEL IN
BANKS::
1. Removal of anomalies in wage fixation of Central Para Military Personnel
joining Bank :
Extension of benefit of Pay Fixation to the Officers, who joined in the Bank
from Central Armed Police Forces /Para-Military Forces/ State Police,which
mean Border Security Force (BSF), Central Reserve Police Force (CRPF), Indo
– Tibet Border Police (ITBP), SashastraSeemaBal (SSB) and State Police etc.
in accordance with the guideline issued by Government of India time to time
in the matter.
Before 2005, a majority of Officers from Defence Forces (which includes
Indian Army, Indian Air Force and Indian Navy) are joining in the bank in the
specialised cadre whereas; few Officers from Central Armed Police Forces
/Para-Military Forces/ State Police are joining at that time. After 2005, there is
a transition change in the above scenario on the wake of better re-settlement
facility arranged/provided by Director General Resettlement (DGR) to the
Officers of Defence forces in the Public /Private sectors and due to lagging
behind wage settlements at subsequent stages as compared to
PSU/Central/Private sectors. And accordingly, theses officers preferred
joining the Institution, other than the Public Sector Banks (PSB), where they
get better remuneration and other benefits. Therefore, the gap has been filled
up by the officers from Ex Central Armed Police Force (CAPF) Officials and
now majority of the officers working in the PSB banks in the specialized cadre
of Security (Security Officers) are from CAPF only.However, it is observed that
despite the appropriate Government direction, these Officers have been
denied their legitimate right of Pay Fixation in the same line as the Officers
from Defence Forces are/were getting after joining the Bank.
The relevant guideline is re-iterated hereunder:
Banking Division,Department of Economic Affairs, Government of India, has
issued direction vide F.No-201/3/85-SCT(B) dated 14th October 1985 and the
same was compiled and published in the year 1992 by Indian Banks'
Association, Mumbai under“Compendium of Government Guidelines in the
matter of Re-Employment, Pay Fixation etc. of Ex-Servicemen in Public
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Sector Banks” (copy of relevant guideline enclosed). The extracts of the
guideline published by the IBA under reference is given hereunder:
“With effect from 1st November, 1984 those officers, not below the rank
of Inspector of Police/Company Commander or equivalent rank, who
have been appointed in the specialised cadres in the banks in the lowest
scale of pay of officers i.e. Junior Management Grade Scale I, may be
granted advance increments equal to the completed years of service
rendered by them in the Police/Armed Police/ Para-Military Force on a
basic pay. The Services rendered by these Officers in the ranks/posts
below of Inspector of Police/Company Commander or equivalent will not
be counted for this benefit.
The Services of these officers for this benefit will only be counted from
the date of their appointment/promotion in the rank of Inspector of
Police/Company Commander or equivalent rank/post in the Police/Armed
Police/Para-Military Force.”
2. Introduction of Senior – Junior Check Off for Ex-Servicemen Employed in

Banks :
The wage fixation of Ex-Servicemen who has retired from Military and on
joining PSBs is based on the last pay drawn by them from Military. This has
led to an anomaly in which salary of Ex-Servicemen who are already in the
service of the Bank becomes much less compared to to an EX-Servicemen
who joins the Bank much afterwards due to enhancements in wages on
account of implementation subsequent Pay Commission Reports during the
intervening period between the retirement dates of both these Ex-
Servicemen. Such anomalies are addressed in Central Govt. Through a
mechanism called Senior – Junior check Off. Under Senior – Junior Check
off, the wages of a senior will be re-fixed to ensure that his salary will be more
than the salary fixed for a junior joining the same post. This ensures that the
salary of a Senior will be always higher than the salary of a junior. We demand
that Senior – Junior Check off on similar lines to be implemented in PSBs to
address this anomaly presently existing in PSBs.
Fixation of salary on Promotion:
Salary fitment on promotion should be discussed with the Officers
Organisations. Now Seniors who were drawing special allowances are at a loss
on their promotions in some cases. Hence the fitment formula for promotion
should be thoroughly discussed with the officers' organisations along with the
wage revision.
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44
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PART - II
OTHER
ALLOW
ANCES
MEDICAL
FACILITI
E S
R Q U I S I T ES
P E
LFC / LTC
45
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46
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PART-II
Other Allowances & Benefits
INCENTIVES FOR WORKING IN RURAL CENTERS AND OTHER
SENSITIVE AREAS:
It is necessary to provide incentives to all those officers who are posted to serve
in the rural areas/most sensitive and difficult areas/ areas with security
problems/ areas of weather aberrations in different parts of the country. It is vital
to increase the rural branches and to succeed in financial inclusion, arresting
skewed growth and migration in urban centers
We propose that the following incentive may be provided to the officer
concerned;
An additional allowance to the extent of 20% of the Basic Pay drawn by
him/her;
Weightage for the purpose of Promotion(already available if they serve
beyond minimum period of two years)
Choice place of posting on completion of the assignment
An additional LTC to enable him/her to meet the family etc; (As provided for
those serving in North East for the Public Sector Employees)
OTHER ALLOWANCES SUCH AS HILL AND FUEL ETC.
All the allowances other than what have been covered in the earlier chapters
should be enhanced appropriately.
EDUCATION ALLOWANCE:
As cost of Education has increased a lot Education Allowance to be introduced for
school education and higher education similar to that existing in Govt / PSUs /
Private Sector.
AREAS DECLARED AS SEZ/NEZ/EPZ:
The branches coming under the above areas should be treated on par with Metro
Centres for all allowances and perquisites.
SPECIAL ALLOWANCE TO NORTH EAST, SIKKIM J & K , ANDAMAN AND
OTHER DISTURBED AREAS / NAXAL PRONE AREAS:
Special allowance as prevailing in Central Government/RBI for Officers serving in
these areas including locals should be extended to Bank Officers.
CLOSING ALLOWANCE:
All officers irrespective of the office of posting/ i.e. branch/administrative office
etc., should be paid the closing allowance equal to 15 days of their salary once in
3 months.
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HALTING AND TRAVELING ALLOWANCES
a. Review and rationalization of Halting/Boarding/Traveling expenses.
b. The Boarding expenses should be linked to lodging expenses.
c. All officers should be eligible for travel by Air, irrespective of distance with
Executive Class entitlement for Senior Management.
d. For places not connected by Air, Officers should be permitted to travel by AC-
st
I Class by rail.
e. Option to be granted for travel by road in any other mode also including own
vehicle. Seeking permission of the competent authority to be done away with
in case of exigency and emergent circumstances
f. Lodging & Boarding expenses and diem allowance for 15 days to continue.
DATE OF SANCTION OF ANNUAL INCREMENTS:
Increments falling due between 1st January to 30th June should be sanctioned
on1st January of the year itself. Increments falling due between 1st July to
31stDecember should be sanctioned on 1st July of the year itself. (In tune with 7th
Pay Commission)
PERQUISITES, OTHER ALLOWANCES AND WELFARE FACILITIES:
The perquisites and other allowances as well as welfare facilities provided by the
banks and settled at the industry level should not be reckoned for the purpose of
arriving at the cost of wage revision. It is an essential area of functional
expenditure, as in the case of business promotion in other sectors of the
economy. We should strive for parity in allowances, welfare facilities and
perquisites. We therefore propose that the Bank should bear the tax on
perquisites.
POST ALLOWANCE:
Post allowance should be reintroduced in order to provide incentive for
officers for working in the most competitive sector, to compensate him for
taking additional load on account of diversification, technology initiative etc.,
i. 25% of the Basic Pay should be paid as post allowance to all
designated officers viz., Branch Managers, Divisional Managers, etc.,
RISK ALLOWANCE :
Risk Allowance should be introduced to provide cover to all lending risks to all
sanctioning authorities at all grades as present dynamics of banking involves
various types of risks beyond the normal prudence of banking.
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Differently abled:
A special care and allowance should be paid to the differently abled in terms of
the
Govt of India guidelines
a. Government guidelines on concessions to such employees in recruitment/
promotion/ transfers/rotations/postings, etc. to be strictly followed by all
Banks.
b. Revision of conveyance allowance paid to these employees
c. Physically challenged children of employees to be defined as dependents
irrespective of age or marital status
d. 25 days CL for physically challenged employees.
e. Full pension to physically challenged employees at 50% of Pay irrespective
of service rendered.
The Government guidelines should be implemented in toto.
Disturbed Area Allowance :
Disturbance Area Allowance of 20% of Basic Pay should be paid to officers
working in the branches which comes under disturbed area and Terrorist
prone areas called as The Red Corridor.
MEDICAL REIMBURSEMENT: HOSPITALISATION CHARGES:
We have to roll back the present one and switch over to the earlier scheme with
improvement. Family also should be provided 100% reimbursement. Medical
reimbursement should be exempted from tax, as it is not an income.
Tax free medical reimbursement should be introduced.
Medical Check Up
Considering the stress and strain as well as the increasing health hazards, we
need Master Health Check-up for the officer and his / her spouse once in two
years if the officer's age is less than 50 and every year if the officer crosses 50
years of age. This will actually keep them fit.
LEAVE FARE CONCESSION:
We need to review the existing scheme in a comprehensive manner. The entitled
mode of travel should be made as air travel to all officers For Executive Cadre it
should be executive class.
The encashment of leave fare concession should be the actual expenditure he /
she would have incurred had the officer traveled actually by entitled class.
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RBI and NABARD provide Rs107000 per head to officers upto E grade and for F
grade and above Rs 160000. The same can be extended to our officers.( Separate
note annexed)
Foreign Travel to be allowed within the entitlement upto the maximum distance
permissible in India.
The IBA should take up with the Government and seek exemption from payment
of income tax whenever the amount is drawn on the basis of reimbursement.
SPECIAL ALLOWANCES:
The existing special allowances paid to different places should be revisited and
revised in a comprehensive manner for example in places like J &K, Sikkim,
North Eastern States, Himachal Pradesh, Andaman & Nicobar Islands,
Lakshadweep, the red corridor and other similar centers. The hardship
allowance should be redefined and new areas should be added on the basis of
the norms already available. It should also be revised wherever it is already
being paid.All the officers serving in those places including those who belong to
the same area should also get these allowances in order to meet the higher cost of
living etc., and wherever it is paid, it should be suitably reviewed.
HILL AND FUEL ALLOWANCE & SPECIAL AREA ALLOWANCE::
Since the Bank officers are paid either of the Hill & Fuel allowance or Special
Area Allowance and both are not paid in case of payment of Adhoc Temporary
Incentive for officers posted in North East ( popularly known as North East
Allowance). In Central Government Special Compensatory/Remote Locality
allowance (Special Area Allowance in our case) is paid in addition to special duty
allowance (Adhoc Temporary Incentive for officers posted in North East in our
case). The North East Allowance as being paid @ 20 % of Basic pay the rate of
both the allowances should be suitably revised as prevailing in Central
Government. The rates of this allowance shall automatically increase by 25%
whenever the Dearness Allowance payable on revised pay structure goes up by
50%DEPUTATION ALLOWANCE:: The allowance should be suitably revised and
made uniform in the industry.
EXGRATIA:
The concept of minimum exgratia should be reintroduced in a rational manner.
Exgratia is now available to all the Foreign Banks etc., which has created a
serious differential in the emoluments between the workforce in the Public
Sector and other sectors. It is also prevalent in Govt. Sector such as Railways/
Postal and in Public Sector Undertakings and paid during festivals. Hence, an
amount equivalent to not less than one month's gross salary should be paid as
exgratia to all.
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PART - III
THE ISSUES CONCERNING

LADY OFFICERS
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PART III
ISSUES CONCERNING LADY OFFICERS:
Thanks to the awareness that has been created amongst the women in the
country over the last several years to excel on par with men in all walks of life, the
intake of the lady officers in the banking industry has very substantially
increased in almost all the banks. It is nearly 50% of the total recruitment in
some of the banks and it may increase in due course due to the changing
demographic profile of employable educated youth.
They are also to-day accepting challenging postings, transfers, and specialized
areas in the banks without any hesitation. They are now in a position to accept
higher responsibility in their career and look to head the institutions eventually.
The Officers Organisations have been receiving a number of representations,
memorandum and also resolutions highlighting the problems of the lady officers
through the various conferences as well as the Women's wing. Based on these
suggestions, it has been decided to exclusively devote a chapter to consider their
special situation and demand appropriate relief .
(a) PLACEMENT AND POSTINGS:

One of the major concerns of the lady Officers has been their placements and
postings in the banks. The country is yet to develop in the matter of
infrastructure, the facilities exclusively to the lady members in different places.
Hence, a separate Transfer / placement Policy taking into account the problems
of the lady officers should be designed and forwarded to the member banks by
IBA. The IT sector is a classical example where a lot of sympathy is shown to the
women employees in the matter of posting and placement in order to get the best
from them. Yet another major consideration is their safety and security at
different centers.
The lady Officers need to be extended the benefit of flexi-time and flexi-place
concept. They should be given choice of their place at the time of transfer and
placement keeping their difficulties in view. The Banks should be advised to
keep one exclusive lady Officer in charge of Personnel Administration in all the
Banks to attend to their exclusive issues including transfer, placement etc.
The Government guidelines pertaining to female officers should be introduced
in all banks .
Flexi timing as well as work from home facility should be introduced for a
limited period of 3 years during the entire service.
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(b) PROVISION OF CRECHE FACILITY:
The Banks should provide Creche facility for the benefit of children of Officers
who are required to attend to office as the children need parental attention.
(c) LEAVE FACILITIES:
The existing Maternity Leave of 6 months at a time should also be extended in
case of adoption of a child (from present 3 months) and increased to one year for
one birth. 3 months' additional sick leave be sanctioned after attaining the age of
45 years as lady officers are prone to diseases at this age.
Child Care leave as applicable to the Central Government employees must be
made available to lady officers i.e. two years CCL with salary. It should be also
extended to male officers if they are single parents.
(d) PATERNITY LEAVE:
The Paternity leave should be extended to 60 days on 2 occasions.
(e) LFC/HTC:
Spouse employed in the same bank to be permitted to avail LFC separately as
per individual eligibility. The lady officers should be permitted to take their
dependent parents and parents in law along with them on LFC/LTC.
(f) DEFINITION OF FAMILY:
The parents, father-in-law & mother-in-law, dependent of an officer, sons and
daughters, brothers and sisters divorced or deserted, daughters or sisters etc to
be treated as members of family for the purpose of LFC/HTC and medical
facilities.
(g) FERTILITY TREATMENT
Now a days infertility is a serious problem affecting family life. Additional leave
of 6 months at different intervals along with salary and medical reimbursement
should be provided. This will also apply to men who undergo infertility
treatment.
(h) WORK FROM HOME
The Board of the largest Bank, State Bank of India recently approved the 'Work
from Home' policy to enable its employees/officers to work while at home using
mobile devices to address any urgent requirement they may have, which
prevents their travelling to work.
The concept of “Work from Home” is a very welcome move, especially for the lady
officers/employees. The increasing number of women in the Bank stands
testimony to their faith in the Industry and their commitment amidst all the
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constraints. A large number of organizations have already come up with
theiraction-plan to protect the interest of the women in our country. The trade
unions in the organized sector have also contributed their mite to organize the
women workers and help them in providing leadership to women workers and
to espouse their cause with the Government and other agencies. Besides the IT
Sector, the Banking Industry is one of the major sectors, employing a large
number of women who are occupying several high positions in the organization.
Hence, it is imperative on the part of the Bank as well to protect the interest of the
women and ensure a congenial working environment along with the option to
work from home at their convenience.
A Sub Committee may be constituted to arrive at the type of jobs which can be
entrusted under the concept of work from home. Care should also be taken to
see that it does not lead to excessive work and intrude into the privacy of the
employee.
(i) FLEXI TIME SCHEME
The initiative aims at creating an employee friendly environment, promoting a
healthy work life balance and employee engagement through welfare measures,
in tune with the best Human Resources practices. This also helps in providing
flexibility to employees to attend to inevitable exigencies of personal
/professional life and will definitely help in reducing attrition.
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PART - IV
SUPERANNUATION BENEFITS
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PART IV
Superannuation Pension, Provident Fund, Gratuity Etc.,
NEW PENSION SCHEME
The employees and officers who joined the banking industry on or after
01.04.2010 should be governed by the original pension settlement signed on 29th
October 1993 and Gazetted in the year 1995.
The seventh pay commission has recommended as below.
Pension has been one of the key Terms of Reference (TORs) for successive Pay
Commissions. While the VI CPC was the first Pay Commission to have been
constituted after the introduction of the National Pension System (NPS) which
came into effect on 01.01.2004, the VII CPC is the first one to be constituted after
some experience has been gained on this count. Pension Related TOR of the
Commission. The TOR of the present Commission - to examine the principles
which should govern the structure of pension and other retirement benefits,
keeping in view that retirement benefits of all Central Government employees
appointed on and after 01.01.2004 are covered by the National Pension System
(NPS)–limits the mandate of this Commission only to the Old Pension System
(OPS). However, during its interaction with staff associations and other
stakeholders, the Commission received many grievances/suggestions relating to
both the OPS and the NPS. It has also been averred, inter alia, that NPS is proving
to be an impediment in attracting and subsequently retaining the best talent for
the Central Civil Services/All India Services (AIS). In this backdrop, the
Commission decided to address the grievances related to NPS, which have been
discussed in this chapter. Issues relating to OPS and other retirement benefits
have been dealt in Chapter 10.1 and Chapter 10.2.
NPS Background - The Commission notes that the NPS is the culmination of a
series of social security and pension related reform initiatives in India. As in many
other countries, pension reforms in India were driven by the fiscal constraints of
supporting a public pension system and the longer-term problems of an ageing
population. Government of India, in 1998, set up the Committee for Old Age
Social and Income Security (OASIS). The OASIS committee concluded, among
other things, that the Defined Benefit Scheme (DBS), serving the Central
Government retirees, is unaffordable for government and it should be replaced by
a Defined Contribution Scheme (DCS). The Commission notes that the total
pension liability on account of Central Government employees had risen from 0.6
percent of GDP (at constant prices) in 1993-94 to 1.66 percent of GDP (at
constant prices) in 2002-03. Pension expenditure of the Central Government grew
at a compound annual growth rate (CAGR) of 21 percent during the period 1990
to 2001. This was also reflected in the increasing fiscal deficits. Further, in the
DBS, pensions were wage indexed, and thus the outgo on this account would have
increased manifold. The stressed fiscal situation, thus, set the stage for
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introduction of the NPS in India. The Bhattacharya Committee Report of the
Seventh CPC 422 Index Report (HLE Group on NPS) (Feb 2002) recommended
that an unfunded Defined Benefit (DB), Pay As You Go (PAYG) scheme or a pure
Defined Contribution (DC) scheme would not be suitable and therefore
recommended a hybrid DB/DC scheme to meet the requirements of central civil
servants.International Experience on Pension Reforms Pension reforms, in
recent times, have been initiated in many countries across the world. The
Commission notes that an aging population, changing social structures,
uncertain and inadequate social security benefits and rising fiscal liabilities
have been the major causes behind pension reforms, especially for a transition
from DBS to DCS.
Introduction of NPS On the basis of various reports, the Central Government
made the decision to place all new recruits into Central Government from
01.01.2004 onwards (excluding Defence Forces) under NPS. NPS is managed by
the Pension Fund Regulatory and Development Authority (PFRDA), which was
initially set up as an interim authority. The PFRDA Act was passed by Parliament
and notified w.e.f. 01.02.2014, bestowing statutory status on the authority. Under
the NPS, employees contribute 10 percent of their monthly salary (basic plus DA)
towards their pension with matching contribution from Central Government. In
respect of the AIS officers working under them, the matching contribution is
made by the State Governments. Three professional Pension Fund Managers
invest the funds under NPS following an asset allocation framework mandated by
government. The Central Record Keeping Agency (CRA) maintains a separate
pension account for each individual employee identified by a unique Permanent
Retirement Account Number (PRAN). Individual employees have been given
online access through the CRA website to view the status of their pension wealth.
Under the NPS, upon superannuation, the individual is required to invest at least
40 percent of pension wealth for purchase of annuity and the remaining up to 60
percent is paid to him as lump sum. The annuity provides for pension for the
lifetime of the employee. Individual subscribers to the NPS are not covered under
the General Provident Fund. Regulations issued by the PFRDA now provide for
partial withdrawals up to 25 percent of the contribution made by the subscriber
to his individual account after at least ten years from the date of joining, up to a
maximum of three times during the tenure of the subscription for certain
specified purposes, before superannuation. The regulations issued by PFRDA
also provide that if the employee dies in service, then at least 80 percent of the
accumulated pension wealth shall be mandatorily utilized for purchase of annuity
and the balance amount would be paid to the nominee(s)/legal heirs.
Report of the Seventh CPC 423 Index Performance of the NPS Over 13 lakh
Central Government subscribers have accumulated pension wealth of over
Rs.24,000 crore by the end of 2013-14. The Compound Annual Growth Rate
(CAGR) of returns on the scheme are tabulated below:- (in percent) Year 2008- 09
2009- 10 2010- 11 2011- 12 2012- 13 2013- 14 2014- 15 CAGR (Central Govt.)
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The Commission further notes that all State Governments (with the exception of
Tripura and West Bengal) have switched to NPS on the Central Government
pattern.
Grievances against the NPS- The NPS has now been in effect for over 10 years.
During this period, there has been perceptible progress in putting together the
architecture and providing information to subscribers. Major concerns, however,
remain. Broadly, these are as under: i. The larger federations and
staffassociations advocated scrapping the NPS on the ground that it
discriminates between two sets of government employees. ii. Individuals covered
under NPS have pleaded for reverting to the OPS on the grounds of uncertainty
regarding the actual value of their future pension in the face of market related
risks. iii. Individuals have pointed out that under NPS, the effective salary
becomes less since the employee has to mandatorily contribute 10 percent of pay
towards the pension fund. iv. Individuals have stated that grievance redressal
facility is not effective and consultation with stakeholders has been non-existent.
This communication gap has generated insecurity in the minds of stakeholders
including staff and Group 'A' officers of Central Government as well as All India
Service Officers. v. Associations have complained that Family Pension after the
death of the employee is not ensured in the NPS. Moreover, if an employee dies at
an early age, the family would suffer since annuity from the contribution would be
grossly inadequate. vi. Individuals have complained that NPS subscribers have no
recourse to GPF for their savings. Their personal savings (10% of salary) are
considered part of a larger corpus. It has been pointed out that the right approach
would be to consider only government's contribution and the returns earned on it
as the effective amount available for purchase of annuities. vii. Associations have
pointed out that unlike the facility under GPF, it is not possible to take refundable
advances under NPS, even to meet obligatory social expenditure. This forces
employees towards increased indebtedness as they have to borrow from
elsewhere. viii. Grievances also relate to tax treatment under NPS. While
contributions and accumulations in NPS are exempt, lump sum withdrawals
from NPS at any time are taxable at par with any other income. In addition, there
is a service tax liability on any amount utilised for purchase of annuity. It has been
pointed out that though NPS became effective from 2004, detailed instructions
were issued only in late 2009 and in many cases the credit of contributions began
from 2012. In the case of AIS officers in some States, contributions by the
concerned State Government are yet to be fully made and deployed. The net result
of this has been that contributions for the period 2004-2012 have not been made
in full or have earned simple interest and did not get any market linked returns.
Because of the prevailing confusion, contributions made by some AIS officer have
been returned to them without interest. This will have a huge impact on the
eventual corpus as the benefits of compounding were not available for the first 8 -9
years. x. Individuals, in their presentation before the Commission, stated that
annuities under NPS have no compensation for inflation unlike dearness relief
under OPS. Further, in the case of OPS there is a revision in basic pension itself
after every Pay Commission. This too is not available in respect of annuity of NPS
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subscribers. xi. It has been pointed out that government employees are not given
freedom of choice in choosing their fund manager based on performance and
track record as the contributions are divided in a pre-specified ratio among
selected Pension Fund Managers. It has been stated that government employees
have no say in asset allocation of their money. xii. Concerns were raised that the
contribution of 10% + 10% will not be sufficient to create a corpus which provides
reasonable assurance that pension will be 50 percent of the last pay
drawn.Analysis of the Issues by the Commission - The Commission has examined
these concerns raised by the stakeholders. The Commission also interacted with
Chairman, PFRDA, and representatives of the Department of Pensions and
Pensioners Welfare (DPPW), Department of Personnel and Training (DoPT),
Department of Expenditure (DoE) and the Department of Financial Services
(DFS). In so far as the future value of pension under NPS is concerned, the
Commission notes that this would depend upon a combination of factors: (i)
performance of the invested fund, which in turn would depend on the asset mix of
the investment and general economic situation of the country, (ii) cost of financial
intermediation, (iii) contribution rates, (iv) period of contribution, (v)
performance of the fund manager and (vi) development of the annuity market.
Analysis of the Asset Mix of Investments - On asset mix of the investment, the
pension funds, the world over, are invested in different assets including
government and corporate bonds, equities, foreign securities etc. government
bonds are generally the lowest risk and lowest yield. Corporate bonds and
equities are higher risk and higher yield. Typically, systems use a mix of at least
two types of assets– Government Bonds and Corporate Bonds/Equities.
As per the investment guidelines stipulated by the government for Central
Government employees under NPS, up to 55 percent can be invested in
government bonds, up to 40 percent in corporate debt securities, up to 15 percent
in equities and up to 5 percent in money market instruments. International
experiences on asset mix vary across countries which have adopted the DCS.
The Commission notes that an innovative approach to investment under the DCS
is the Life Cycle Approach. Under this, the asset mix of each individual changes
based on his/her age. The underlying assumption under this approach is that
younger workers are better able to absorb year on year volatility and therefore can
undertake risk while older workers should reduce risk as they approach
retirement.
A carefully selected asset mix is the sine qua non to higher returns. The
Commission recommends that the investment choices under NPS be calibrated
on a life cycle approach and the choices be offered in a simple manner so that any
lay person can understand and act accordingly. The Commission also
recommends that government, in consultation with PFRDA, come up with
different options for investment mix and provide subscribers a range of options.
Contribution Rates - In DCS, typically, the employees as well as the employers
contribute towards a pension fund. As discussed earlier, the quantum of pension
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payouts would also depend upon the contribution rates. Higher the contribution
rate, better would be the pension payouts. The contribution rates for both the
employees and the employers vary across the globe. The Commission has
received suggestions that the government's contribution should be enhanced
from the present 10 percent in aid of a higher payout under the NPS. Associations
and individuals have made presentations before the Commission highlighting
that forecasts suggest that a 10 percent contribution from government will not be
adequate to provide reasonable post retirement financial security in all cases.
TheCommission, therefore, recommends that this important aspect should be re-
examined in detail by an expert body for making course corrections if required.
Period of Contribution - The Commission notes that time is of the essence in
building up a reasonable corpus and ensuring that effects of compounding are
significant. It is therefore essential that contributions by individuals and
corresponding contributions by government are made in time, and more
importantly, are deployed without any loss of time. Any delays in this respect,
particularly in the initial years can have a large impact on the eventual corpus.
Government employees who have joined service between 2004 and 2011 have
suffered due to delay in finalizing the structure of the NPS and the issue of detailed
instructions. Although they have made regular contributions, in many cases, this
money and/or counterpart contributions were not deployed in the market. In the
case of AIS officers, some states are yet to release counterpart contributions or
pay interest on delayed contributions. This has led to a situation where the
accumulated corpus even after 11 years of service could be meagre. It is necessary
that this situation which arose during the transition from OPS to NPS be
addressed. The Commission therefore recommends that Central Governments
and State Governments should, in a time bound manner, ensure that all the due
contribution along with compounded interest, where contributions have been
delayed, be deposited in the accounts of the beneficiaries. Advisories should be
issued to the State Governments to deposit amounts, if not already done, in
respect of NPS beneficiaries belonging to All India Services.
Many Associations have pointed out that unlike the facility under GPF, it is not
possible to make withdrawals under NPS, even to meet obligatory social
expenditure. This forces employees towards increased indebtedness as they have
to borrow from elsewhere.
The Commission notes that under the NPS Tier-I account, a subscriber is
permitted to make partial withdrawal of twenty five percent of the contributions
made to his/her individual pension account for certain specified purposes. Such
withdrawals are permitted a maximum of three times during the entire tenure of
subscription and a period of at least five years should have elapsed between two
such withdrawals.
The Commission further notes that there exists a voluntary Tier-II account. Under
this account, a subscriber can, at any time, withdraw the accumulated wealth
either in full or part and there is no limit on such withdrawals provided the
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account has sufficient balance of accumulated pension wealth to cover the
amount being withdrawn. However, the Tier-II account is yet to be made
operational. The Commission therefore recommends that PFRDA should take
steps to make the Tier-II accounts operational as early as possible to enable the
NPS subscribers the facility of withdrawals from their accounts in case of
requirement.Transparency under NPS- Many associations and individuals have
complained that the information relating to the NPS is inadequate, resulting in
high degree of uncertainty in the minds of contributors about post-retirement
benefits. The Commission noted that PFRDA sends a communication to every
participant each month with the current pension wealth and the latest
contribution that has been credited. The Commission recommends that focused
efforts be made to capture email addresses and mobile numbers of subscribers
so that seamless communication is ensured for all subscribers. The Commission
recommends that consultation with stakeholders should also be held periodically
in different parts of the country.
The Commission notes that no department of Government of India is taking
ownership of the NPS. The Commission recommends that a Committee
consisting of Secretary, Department of Financial Services, Secretary, Department
of Pensions and Pensioners Welfare and Secretary, Department of Administrative
Reforms and Public Grievances may be constituted to review the progress of
implementation of NPS. The Commission also recommends that steps should be
taken for establishment of an Ombudsman for redressing individual grievances
relating to NPS.
Tax Treatment under the NPS - NPS is under the Exempt–Exempt - Tax (EET)
regime while the General Provident Fund under the OPS is under
Exempt–Exempt–Exempt (EEE) dispensation. Under the NPS, while the
contributions and the accumulations are tax-exempt, withdrawals are taxable. As
such, this is an inferior tax treatment when compared to other pension
programmes such as General Provident Fund, Contributory Provident Fund,
Employees Provident Fund and Public Provident Fund wherein contributions,
accumulations and withdrawals are tax-exempt. The Commission feels that tax
neutrality should be ensured across various avenues for long term savings for
post retirement incomes so that the employees covered by NPS are not at a
disadvantage. The Commission therefore recommends that withdrawals under
the NPS should be tax-exempt to place NPS at par with other pension schemes.
The Commission also recommends that the service tax levied at the time of
annuity purchase by NPS subscribers should be exempted.
Issue of Family Pension In Case Of Death of the Subscriber Another complaint
received by the Commission from staff associations and individuals is that Family
Pension after the death of the employee is not ensured in the NPS. The
Commission notes that the government had provisionally extended benefits
under the Central Civil Service (Extraordinary Pension) Rules, Family
Pension/Extraordinary Family Pension/Liberalised Pensionary Award to
government servants appointed on or after 01.01.2004.
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Rules regulating these benefits have now been notified by the PFRDA. PFRDA
regulations provide for an exit option from NPS in case of premature death of the
subscriber by availing of additional relief from government, in which case the
entire accumulated pension wealth inclusive of subscriber's contribution would
be transferred to government. The Commission recommends notification of a
scheme by government for provision of additional relief in such cases consequent
to exit from NPS.Framing of Rules and Regulations - The Commission notes
that rules and regulating relating to NPS are being framed and notified by PFRDA
from time to time. Associations and individual officers have raised the issue of the
need for greater involvement of stakeholders in finalizing these regulations The
Commission recommends that government encourage the PFRDA to set up a
strong consultative mechanism involving the DPPW, DoPT, DFS and some
associations of employees for a review of regulations and for finalizing future
regulations to bring clarity and remove uncertainty relating to NPS. The
Commission also recommends that draft regulations should be widely publicized
to enable subscribers to respond to any proposed changes, as normally done by
other regulatory authorities.
So there is a need to go back to the old scheme or convert NPS into an assured
pension scheme.
If the pension contribution is Rs1000 per month for 20 years the
accumulated interest and Principal at 12% will be Rs1000000 and the Bank
will be able to pay Rs10000 per month as Pension at 12% Interest. In fact
banks had a Perenial Pension Plan in which this was provided. When most of
the loan schemes fetch more than 12% this is very much feasible. Each Bank
can maintain the fund themselves and lend it for loans with Interest rate of
12% or above and will be able to pay an assured pension. Instead of allowing
the funds to be invested in markets, Banks should be allowed to manage them
and the Banks should pay 50% of the last drawn pay as pension. This is very
much feasible.
A committee should be constituted to address the issues pertaining to the New
Pension Scheme introduced in the Banking system from 01 4 2010. The
Committee should complete the exercise during the course of the negotiation and
the decision should form a part of the joint note.
GRATUITY:
The Gratuity should be paid at the rate of one month salary and allowances
without any ceiling. The gratuity should be completely exempt from payment of
income tax. The calculation of gratuity should be changed as we move over to 5
day week.
The service Gratuity or the Gratuity under the payment of Gratuity Act should be
considered . It should be made applicable uniformly to all .
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PROVIDENT FUND:
Based on the principles of retirement benefits which allot Provident Fund,
Gratuity and Pension for different purposes, the Provident Fund should be at the
rate of 12% of the total salary and allowances. The Provident Fund should be
payable to all employees.
ENCASHMENT OF LEAVE:
Encashment of entire leave at credit should also be permitted on resignation,
removal and compulsory retirement. Now, half permitted on resignation & full on
compulsory retirement.
The existing ceiling on encashment of leave should be removed at the time of
resignation / superannuation as directed by the Punjab & Haryana Court
judgement. The entire amount should be exempted from income tax as in the
case of the Central Government Employees. Encashment of PL should be allowed
without any ceiling.
MEDICAL BENEFIT SCHEME:
A comprehensive Medical Scheme for pensioners/ retirees should be introduce in
lieu of the medical insurance scheme.
WELFARE ACTIVITIES:
A separate allocation of funds for improvements to welfare of the pensioners
should be made every year. The facilities like Holiday Home, clinics, Transit
House etc., should be made eligible for pensioners also.
Present ceiling of 3 % of net profit to be given to welfare activities should be raised
to 5 % of operating profit to be given to welfare activities.
Suitable life cover should be taken for normal as well as accidental death of
employees.
LFC/ HTC FACILITY:
LFC / HTC Facility should be extended to the retirees also at par with serving
employees .
NEWS PAPER:
News paper and fitness allowance can be provided to the pensioners.
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PART - V
REGULATED
WORKING
HOURS
5 DAYS
A
WEEK
NON MONETARY ISSUES

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Part V
NON - MONETORY – ISSUES
A. Regulated Working Hours

It is the duty of the banks to provide an appropriate environment, ambience and
above all the HR systems at all branches. The officers' fraternity should also be
provided with all amenities such as supply of refreshment, beverages etc., inside
the branch premises in view of the pressure of work, long stay in the office etc.,
The environment should afford an opportunity for full exposure of the creativity
and also efficiency of the officers while discharging their duties to the customers
as well as the branches. Work-Life balance is very important too.
The banking industry is now equipped with excellent technology advancement,
continuous updation of computers, servers etc., there is therefore a need for the
Management to adopt appropriate HR initiatives to encourage and motivate the
Officers to acquire knowledge in these fields and give their best to the institution.
The Banking Industry is entrusted with the responsibility of enhancing the
economic prosperity of the country and also the GDP growth with a view to
enhance the standard of living of the common man. The management should
ensure that reasonable working hours are fixed rather than pressurizing the
officers which may lead to failure and resultant loss of health or upset the officers'
routine. Hence, the working hours for officers should be defined and regulated.
B. 5 DAYS WEEK & COMPENSATION FOR EXTRA WORK:
Five Day week is already available in the international banking system. It is also
available in our country in RBI, Central and State Governments, Public Sector
Undertakings and Private Sector MNCs and IT Sector. Hence, it should be
introduced immediately in the entire banking industry.
The working hours should not exceed 36.5 hours in a week. The daily working
hours should not be more than 6.5 hours in the normal course.
Any working hours, more than 7 hours a day, should be compensated with
compensatory off coupled with monetary benefit to the extent of twice the actual
hourly salary in the normal course. This should be uniform for the Banking
Industry as the Govt directs banks to work late or on holidays often and we follow
their directions but compensation varies between Banks.
They should also be made eligible to take weekly off to the extent of additional
hours of duty rendered by them as rest is needed for recuperation.The Officers
who are called upon to work on weekly-off days and holidays, should be
compensated as above and in addition be permitted a compensatory off on a date
convenient to them and such weekly offs be credited to the leave account.
Need to have uniform holidays to the officers in the Grid, as the holidays are
declared by RBI, substantially less no of holiday is extended to the officers. There
should be state level grids. In fact the concept of clearing itself needs to be
changed as cheques are payble any ware and technology has improved.
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COMPASSIONATE APPOINTMENT
The Govt of India guide lines on compassionate appointment is not being followed
by some banks. Exgratia alone is paid which cannot compensate for the loss and
future survival. Hence IBA should advice all banks to uniformly implement Govt
of India guidelines and restore compassionate appointment.
CATEGORIZATION OF BRANCHES
The categorization of Branches was done by the Reserve Bank of India earlier. Off
late some banks have started their own categorization norms which affects the
career of the officers and in many cases it is leading to reduction to staff. With the
increasing business staff cannot be reduced. Hence we demand that there should
be uniform categorization norms for all Public Sector Banks.
LEAVE RULES:
The existing leave rules will have to be comprehensively reviewed and made
officers friendly and flexible as available in several other sectors of the economy.
The availing of leave should be made flexible. The officers should be free to avail
the leave as and when required. They should also have the benefit of splitting the
day into hours and half-day, full-day etc., and longer period as in the case of
several other corporates.
TYPES OF LEAVE:
The existing system of maintaining separate leave accounts may be done away
with. A common account of leave should be introduced where they should be able
to combine all types of leave into total number of days of leave available to them
and use the same as per their own requirement.
However for the purpose of better understanding we re-produce the types of leave
available and the need to review the same.
a. Casual leave should be increased to 15 days;
b. Privilege Leave.
c. Sick Leave 15 days in a year ( on full pay) without any ceiling;
d. Special leave for study, sports, social and cultural activities f. Leave on loss of
pay
e. Sabbatical leave (should not be refused on flimsy ground)
f. Accumulation of PL should be without ceiling and once in two years
encashment of 30 days leave should be allowed.
g. Government Scheme should be introduced.
INTRODUCTION OF LEAVE BANK:
The leave so calculated should be credited to the leave account of the officer on a
consolidated basis. The officer should be eligible to avail the leave on the basis of
his requirement. The intermittent holidays and weekly offs should be excluded
while sanctioning leave.
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The Officer should have the opportunity of encashing the balance available in the
consolidated leave account once in a year to the extent of 50% of the leave available
in his account at the beginning of the subsequent year. Further, an officer should
be permitted to encash the entire leave at his credit at the time of retirement
including sick leave and no ceiling should be imposed for accumulation of leave.
The officer may be permitted to transfer leave to another officer in case of need for
medical purpose.
OUTSOURCING :
Work done on a regular basis should not be outsourced.
ROLE OF INTERNATIONAL CONSULTANTS
Of late many of the HR policies and Banking policies are being dictated by
Multinational Consultants who do not have any accountability. Many of their
recommendations have gone wrong. Hence we demand a ban on Multi National
Consultants in the Banking Industry. However we can use our own country's
IIMs, IITs and Universities for taking up studies and giving recommendations.
DISCIPLINARY RULES PROCEDURE & ACCOUNTABILITY :
We have submitted a very comprehensive note to the Indian Banks' Association for
the review of the existing conduct rules and procedure and to introduce certain
changes in tune with the changing environment in the 7th Joint Note exercise. The
issue should be finalized for implementation, before the negotiation starts as
it is a pending issue.
WITHHOLDING OF GRATUITY ON RETIREMENT / RELEASE OF TERMINAL
BENEFITS :
The present adhoc system of withholding gratuity and harsh decision to set off the
gratuity amount towards loss caused etc., should be reviewed keeping in view, the
recent judicial pronouncements. In any case, there should not be stoppage or
denial of gratuity to the officers.
No disciplinary action should be initiated after superannuation.All Terminal
benefits should be released pending disciplinary proceedings if bank fails to
complete the proceedings before superannuation as is being done in the case of
CBI cases being pending.
ADMINISTRATIVE TRIBUNALS:
The IBA should take up with the Government, the introduction of an exclusive
Banking Administrative Tribunal for the banking Industry in order to deal with all
the service as well as disciplinary matters in respect of officers similar to Central
Administrative Tribunal.
INCOME FOR DEPENDENTS
The present ceiling of Rs.10,000/- for dependent should be increased to
Rs.30000/- taking into account minimum basic pay of Rs.18000/- for the Central
Govt employees which along with DA amounts to Rs. 30000/-
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PART - VI
BILATERAL RELATIONSHIP
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PART VI
GENERAL BILATERAL RELATIONSHIP:
The 8th Joint Note exercise on Officers wage revision when resume, will have a
historical significance in the sense that the Management and the Officers'
organizations have come a long way in the structured negotiation systems and
have matured enough to decide and arrive at a compensation which is generally
acceptable to both the parties. In the process we need to have a clear demarcation
as regards the issues concerning the Officers' fraternity and Officers'
organizations should have exclusive right to negotiate on behalf of the officers in
the banking industry. Hence, all the issues connected with both the directly
recruited officers as well as the Officers promoted from clerical cadre have to be
decided between the IBA and the Officers' organizations. Similarly the issues of
promotion policy, transfer policy, etc., will have to be settled bilaterally with
Officers' organizations both at the bank and the industry level.
APPOINTMENT OF OFFICER/EMPLOYEE DIRECTOR
Except one Bank there are no officer / employee Director in any of the Public
Sector Banks. This is total violation of the law of the land. This has been an issue
in many of our agitations. The IBA should take serious efforts to clear
appointment of officer/employee directors in all the banks. Crucial decisions
including HR issues are finalised in the Banks Boards. The concept of
participatory management should be honoured.
STRUCTURED FORUM AND ACCOUNTABILITY FOR SETTLEMENT:
The Officers' organizations have been holding discussions and negotiations with
the representatives of the Indian Banks' Association over the last 40 years. The
system has got itself streamlined during the last 3 decades and the issues that are
related to the compensation and also certain issues of urgent nature are brought
to the IBA forum and decided between both the parties. There is a need to
structure this conventional arrangement and ensure that all issues affecting the
industry and the impact of the directives of the outside agencies on the officers'
fraternity are brought to this structured forum and decided to avoid unnecessary
irritations in industrial relations in the banking industry. The proper detailed and
codified account of all discussion should be exchanged.
The structured forums are already in vogue in all the banks. The issues referred
to the banks by the IBA and the Government is discussed at the bank level
negotiations by each organization which leads to discrepancies in the
implementation of any understandings reached between the organizations and
the management.
Certain Industry level issues have to be discussed at IBA / Government Level.
Hence, there is a need to have structured forum at IBA / Government for
periodical discussions. Hence, there is a need to bring all such issues/directives of
the IBA and the Government before a structured meeting and settle to avoid
frequent agitation and industrial unrest in the banking industry.
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IBA Management Committee meets periodically. IBA also collaborates with
Organisations like FICCI and ASSOCHAM. Being stake holders we should be
invited for discussion periodically and also in conferences like Gyan Sangam.
We propose a quarterly meeting with IBA in a structured forum.
RECRUITMENT / RETIREMENT:
The Banking industry is in doldrums due to inadequacy of the workforce. The
lopsided policies and the conventional approach of the Government and the
Managements of the banks at the instance of the IBA and the Ministry of Finance
have created a big gap in the average age of the various groups of employees in the
banks. There were no recruitments virtually for more than 2 decades and as a
result, the age difference between the old employee and the new employee is so
wide that the average age of the workforce is adversely affected.
A close review of the situation should be considered and necessary steps to be
taken for a pragmatic succession plan. The large scale retirement is adversely
affecting the workforce since experienced hands are getting retired where as a
large chunk of new recruits are forced to take up higher positions and the
promotions are getting accelerated in comparison with the earlier situation
thereby causing serious problems of seasoning and grooming of higher level
officers in the banking industry.
A crash programme should be worked out to tackle this serious issue.
In view of shortage of manpower, the retirement age should be re-fixed. We have
the following suggestions:-
MASSIVE RECRUITMENT
To cater to the emerging needs we have to go for massive recruitment of clerks and
Officers and also agriculture graduates, commerce graduates, Computer
Engineers etc immediately.
AGE OF SUPERANNUATION:
The age of superannuation to be raised to 65 years for all officers, as there is a
huge shortage in the middle order and seniors due to non recruitment for 10
years. As such Banks are engaging retired officers for various duties. The
Chairman and the Managing Directors can continue even after 60 years.
Considering the increasing longevity and the vacuum created due to non
recruitment for more than 10 years this will help the Banks to retain talents to
nurture the younger generation.
WELFARE FACILITIES: STAFF WELFARE CEILING :
Present Ceiling of 3% of net profits to be increased to 3% of Gross profit without
any ceiling.
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LIFE COVER :
Suitable Life Cover should be taken for normal as well as accidental death. This is
available in few Banks but there is no uniformity REVIEW OF LOANS AND
ADVANCES: Housing Term Loan:
In view of the increase in cost of construction of house and flats, we need to have a
comprehensive review of House Building Advance to officers by suitably
enhancing the limit to Rs.1 core at Simple rate of interest without any slab,which
can be repaidup to the age of 75.
In this regard, the rate of interest has been hovering around Nil to 8 percent in
different banks. The first concessional rates of interest on housing term loans for
staff was introduced way back in 1967 with Nil interest. In 1979, the amount was
increased to Rs.1,10,000/- at the rate of 5% simple interest. The rate was around
8% less than the rate of interest charged to public housing term loans, which was
prevailing at 13%. Hence, the spread was 8 percent
However, the spread has been given a go by and different banks are charging at
different rate of interest. Housing Term Loan is a welfare measure providing
shelter to the family members of the employee. Hence, the rate of interest should
be maintained at the same spread as was obtaining in 1979, as otherwise, due to
the steep increase in the cost of land and construction, the employee would be
finding it difficult to service the loan.
CONVEYANCE LOAN:
The Conveyance Loan has not been revised for long, we need to enhance the Car
Loan limit to Rs.15 Lacs and Two Wheeler Loan limit to Rs.1 lac at Simple rate of
interest without any slab. The repayment of the above loans should be extended
upto 75 years of age.
Review of all loans and advances and make same rules in all banks.
ROAD TAX ON VEHICLES:

In view of All India transferability of officers, the Road tax on vehicles of different
States should be paid by the bank on inter-state transfers.
DATE OF RETIREMENT:
Those who were born on the 1st of a month to be retired on the last day of the same
month, and not the previous month.
PROTECTION OF EMOLUMENTS:
The emoluments drawn by an Officer should be protected on his higher area to
lower area.
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TRANSPORTATION OF PERSONAL BELONGINGS:
The Banks should take the responsibility for shifting the personal effects of the
officers on transfer from one place to another. In the absence of such facility, the
Officers should be reimbursed the full expenditure on certificate basis.
INCIDENTAL EXPENDITURE ON TRANSFER:
To meet additional expenditure towards education of children, housing etc.,
officers should be paid two months' salary to compensate incidental expenses on
transfer. In case of transfer outside the State, 3 months' salary should be
paidtowards incidental expenses. In case of transfers to far off centers and the
places of inclement weather and living conditions, there has to be higher
compensation as incidental expenditure on transfer.
IMMUNITY FROM TRANSFER POLICY, SPECIAL PRIVILEGES TO OFFICE-
BEARERS OF THE ORGANIZATION:
In view of the positive role played by the Officers Organizations there is a need to
revise the existing arrangements as regards the special leave to the office-bearers
of the organizations. The existing arrangement is grossly inadequate in
comparison with the size and the growth of the banking industry and equally the
membership of the officers' organization – the structure of the organization and
hence appropriate enhancement in the leave facility needs to be considered.
The senior office-bearers of the Officers' organizations should have the duty off in
view of the fact that they will be dealing with all the personnel matters relating to
the officers' fraternity and they may not be able to attend to their deskwork. If the
Office Bearers are denied this facility it would cause great harm to the officers'
organizations in the banks.
The Office-bearers of Associations should be extended immunity from
transfer/placement. The Central /State level office-bearers should be given duty-
off on par with workmen organizations. The facility is due for review.
DATE OF EFFECT: 01.11.2017
We reserve our rights to submit supplementary charter of demand /alter the
demand if the necessity arises.
(D.T. FRANCO) (S. NAGARAJAN) (K.K. NAIR) (Dr. S. U. DESHPANDE)

GENERAL SECRETARY GENERAL SECRETARY GENERAL SECRETARY GENERAL SECRETARY
AIBOC AIBOA INBOC NOBO
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ANNEXURES
Disciplinary and Vigilance Proceedings
Note on Five Day Week
Regulated working hours
Note on LFC
Note on outsourcing
Judgement on Leave Accumulation
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ANNEXURE
DISCIPLINARY & VIGILANCE PROCEEDINGS
Issues to be considered
(i) Classification of Misconduct
(ii) Abuse of the omnibus conduct Rule
(iii) Authority for imposing Major Penalties
(iv) Definition of Moral Turpitude & amendment of B.R.A.
(v) Disposal of disciplinary cases & appeals
(vi) Copy of CVC/CVO advice
(vii) Provision of Personal Hearings
(viii) Interpretation & Effect of Penalties
(ix) Debarment period
(x) Sanction of Prosecution/Arrest
(xi) Suspension & Subsistence Allowance
(xii) Defence Representatives- No.of pending cases
(xiii) Agreed List- LODI (xiv) Jurisdiction of CAT
(xv) Proceedings after Retirement (xvi) Issuance of Charge Sheet (xvii) Other
issues
(i) CLASSIFICATION OF MISCONDUCT
In the Officers Service Regulations, Minor and Major penalties have been
classified, but there is no classification of Minor and Major misconduct. Breach
of any provision of the conduct rules is to be deemed as Misconduct. It is left to be
decided by the Disciplinary Authority (in short DA) whether to initiate
proceedings under Minor/Major penalty clause thereby leaving scope for
subjectivity. In case of Award Staff and also Government employees, major and
minor misconduct has been defined as a result one doesn't get major penalty for a
minor misconduct. In case of Officers, though a large number of cases of
proceedings under major penalty end up in exoneration or award of a minor
penalty depending upon gravity of misconduct proved after enquiry but in very
many cases of minor misconduct, the officers end up getting a major
penalty.Also, there are mental blocks in the minds of some DAs who think that if
Major Penalty proceedings are initiated, minor penalty or exoneration or
withdrawal of charge sheet etc.cannot be done.
Recommendation
Minor and Major misconducts should be defined with clear provision that minor
penalty or exoneration may be awarded after conclusion of major penalty
proceedings but major penalty cannot be imposed in cases of defined minor
misconduct.
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(ii) ABUSE OF THE OMNIBUS CLAUSE
Though conduct rules have been elaborated in the Regulations, the regulations at
the same time contain an Omnibus Clause to fit the misconduct not specifically
defined into the omnibus clause. The tragic reality is that in more than 90-95%
cases, the officers are booked under this Omnibus Clause. It proves beyond
doubt that where misconduct is specifically defined, violation is minimal. But
more importantly, it indicates that there is an unbridled tendency among the DAs
to abuse this provision and any conduct is dubbed as misconduct by invoking
this clause which ought to be attracted in rare cases but which is applied in an
overwhelming number of cases. If this clause is annulled and instead if the vast
variety of misconducts covered under this clause over the last over three decades
are analyzed and specifically provided in the conduct rules, it will lead to better
compliance and minimal breach on the part of the officers. In particular, what is
unbecoming of a Bank Officer must be explicitly stated in the conduct rules.
Recommendation
The omnibus clause in the conduct rules should be deleted.
(iii) AUTHORITY FOR IMPOSING MAJOR PENALTIES

As per Article 311 of the Constitution of India, Disciplinary Authority for
imposing capital punishment should not be lower than the Appointing Authority.
Since all capital punishments leading to cessation of service are classified under
major penalties, it automatically follows that for imposing any major penalty, the
Disciplinary Authority should not be lower in rank than the Appointing Authority.
Though this principle is followed in the Government and various other
Organisations, including the State Bank of India, in nationalized Banks it is not
being followed.
Recommendation
No Authority lower in rank to the Appointing Authority should be competent to
award major penalty.
(iv) MORAL TURPITUDE & AMENDMENT OF B.R.A.

Though the term Moral Turpitude appear prominently in the Disciplinary
&Conduct Rules and on a great number of occasions, important decisions to
proceed against the Officers or to place them under suspension have to be
takenfor the acts involving Moral Turpitude, it is a queer paradox that what
constitutes Moral Turpitude has not been clearly or exhaustively defined either
under law or in the conduct rules, though there are various court judgments
which to some extent explain this term. Existence of a general provision in the
Banking Regulation Act Section 10(1)(b)(i) which states that no employee who is
convicted by a court of law for an act involving moral turpitude can be continued
in service enormously increases the need and importance of defining what is
Moral Turpitude, particularly in the context of normal day to day bank work in
order that large number of bank officers do not become unwary victims of these
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provision and suddenly lose their job with no recourse available or a reasonable
hope of reclaiming the lost job due to a painfully slow and exasperating legal
system and no provision for getting full back wages if the conviction is set aside
later on. When the officer is convicted, he is summarily discharged or even
dismissed without holding enquiry etc but when the conviction is set-aside after
proper trial, the intervening period is at best treated as deemed suspension for
payment of subsistence allowance only instead of payment of back wages. In the
Indian Overseas Bank, even the subsistence allowance is not paid and this period
is treated as break in service.
To elaborate, the gravity of prejudice suffered by Officers on account of this while
performing the normal day today duties in the bank can be seen by the fact that
Moral Turpitude has been defined thus in the American settled law:
Moral turpitude refers generally to conduct that shocks the public conscience.
Offenses such as murder, voluntary man slaughter, kidnaping, robbery and
aggravated assaults involve moral turpitude. However, assaults not involving
dangerous weapons or evil intent have been held not to involve moral turpitude.
Conviction of crimes of moral turpitude may also disqualify someone from an
employment opportunity. The precise definition of a crime that involves moral
turpitude isn't always clear, but the above serious crimes only are always
considered crimes of moral turpitude.
In terms of the above and umpteen judgments given by the courts in India, out of
the above list bribery and frauds committed by an officer himself shall qualify to
be acts involving moral turpitude. But, it has been seen that various normal and
seemingly innocuous normal banking acts have been routinely covered by the
trial courts under Section 120 B or section 420 IPC resulting in the discharge or
dismissal of the officer. By the time the appeals are disposed off the officer might
cross the normal retirement age and he neither gets back wages or any other
compensation for loss of employment.
Recommendation
Moral Turpitude should be clearly defined in the conduct rules. In the banking
context, acts of accepting bribe or fraud on the part of the officer himself should
be considered the one involving moral turpitude. Full back wages should be paid
if the officer is held to be innocent and his conviction is set aside after disposal of
appeal. During pendency of the appeal, the officer may be placed under
suspension. Admission of appeal and/or stay against sentence should be
deemedas stay against prosecution for the purpose of compliance of provisions of
Banking Regulation Act since the case is accepted for retrial. We should also
demand from the government Suitable amendment to Sec. 10(1)(b)(i) of the
Banking Regulation Act.
(v) DISPOSAL OF DISCIPLINARY CASES & APPEALS

It is laid down in the special chapter of CVC Manual that no cognizance of the
misconduct will be taken if the action of the officer is more than two Inspections
or four year old provided there is no fraud in which case there will be no
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limitation of time. But charge sheet continues to be served even after lapse of 10
or more years. Further, though the maximum time permitted for service of
charge sheet and for completion of disciplinary proceedings are laid down, in
practice, it is rarely adhered to. The time for filing of an appeal against decision of
the disciplinary authority as also the time for disposal thereof are laid down in
the said chapter. Though, limitation of time is insisted upon for filing of the
appeal and delay in filing is rarely condoned, the time limit for disposal of the
appeal is rarely adhered to and disposal of appeals in many cases is delayed for
years together. Consequently, the officers continued to suffer particularly when
they are under suspension or when cessation of service has been effected.
Recommendation
It is recommended that the laid down instructions should be meticulously
followed and no fault should be found with the act of the officer after 2
Inspections have taken place or a period of four year has expired. Further, if the
charge sheet is not served within the stipulated period of three months or if the
entire proceedings are not completed within the stipulated time of six months as
provided in the Vigilance Manual, the suspension of the officer should be
automatically revoked with back wages and in case the proceedings are not
completed even within a period of one year, the case should be deemed to have
been concluded in officer's favour and he be deemed to have been exonerated. In
case, the charge sheet is not filed by CBI within the time limit of 90 days, bail is
automatically granted but same principle is not applied for revocation of
suspension. It is recommended that in such cases, suspension should be
revoked without prejudice to the decision of the Court case. Similarly, if the
appeal preferred by the officer is not disposed off within the stipulated period of
three months, it should be deemed to have been allowed.
(vi) COPY OF CVC/CVO ADVICE

As per laid down instructions a copy of CVC advice is required to be furnished to
the delinquent officer. In practice, however, it is observed that the authorities
simply provide the operative part of the CVC advice but the entire
correspondence between the Disciplinary Authority and CVC is not made
available which defeats the very purpose of the provision. Further, there is no
system of providing the advice of the Chief Vigilance Officer of the Bank where
CVC jurisdiction is not attracted. This distinction is wholly unwarranted. The
advice of CVO is at a lower footing must be furnished when there is explicit
provision to provide the advice of the CVC.Recommendation
The CVC/CVO advice alongwith the entire correspondence should be made
available. It is further, recommended that the CVC/CVO should only recommend
category of penalty to be imposed i.e. Major or Minor and not the specific
punishment because in that case he assumes the role of the Disciplinary
Authority himself. Further, in case of appeal further reference should not be
made to CVC particularly if the Appellate Authority proposes to give a lower
punishment within the same category already recommended by the CVC.
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(vii) PERSONNEL HEARING.
The disciplinary procedures have been gradually evolving in favour of the
charged officer and in the past some favourable changes have taken place like
provision of enquiry, making available report of the Inquiring Authority to the
charged officer so that he can argue against his findings, making available of copy
of CVC advice etc. But, an important provision like grant of a personal hearing to
the charged officer before award of the penalty has all along been denied. As a
result, he does not get a chance to argue against the proposed penalty before
hand so that some aspects of the case which might have escaped the notice of the
Disciplinary Authority can be pointed out in good time and he will be able to take
a more balanced and reasoned view. After the final decision is taken by the DA, it
becomes difficult to undo the injustice as there is general reluctance to correct the
mistakes and the appeal system is also loaded against the employee. There is
already a provision for grant of a personal hearing to the workman employees.
Recently, the Hon'ble Supreme Court has decided in a case related to State Bank
of India Officer that while deciding the appeal the Appointing Authority must give
a personal hearing. By that logic, the DA should also give personal hearing to the
officer. The same logic should hold good for review petition as well. This
provision is also there in the rules applicable to officers working in the Govt of
India.
Recommendation
The DA should take a tentative decision and grant a personal hearing to the
charged officer along with his Defence Representative before taking a final
decision. The same procedure should be adopted by the Appellate Authority /
Reviewing Authority while disposing off the appeal of the officer.
(viii) INTERPRETATION & EFFECT OF PENALITIES.

While the minor penalties are simple and easily understandable, some of the
major penalties are very technical and can not be easily understood by the
charged officer and even most of the Competent Authorities. At times promotion
of the officer is withheld when no promotion is actually due to him. This results in
undue prolongation of the rigour of the penalty which might not have been the
intention of the DA and the penalty though minor in effects become harsher then a
major penalty. Likewise, penalty of recovery of loss is a minor penalty and
logically a symbolic recovery of small sum should be effected but at times it is
clubbed with a major penalty and amount of recovery runs into lacs. For
exampleremoval of service with recovery of two lacs. Further, when an officer is
reverted to a lower grade, the reversion is taken as a permanent reversion unless
the officer re-qualifies and earns back the promotion, whereas in government
reversion is for a period of two years whereafter the officer is placed back in the
higher scale from where he was reverted. It is also a practice to give more than one
penalty like reversion to lower or the lowest grade coupled with reduction in pay
etc.
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Recommendation
CCA Rules should be followed in this respect in the banks also.
(ix) DEBARMENT PERIOD.

Debarment Rules are different in different banks. In some banks, there is no
debarment when minor penalty is awarded while in some others debarment
period extends to 15-20 years also. No debarment period is stipulated in case of
the penalty awarded is Reversion to a lower grade whereas in case of Govt
employees debarment period of reversion is defined. In some organizations,
when criminal proceedings are pending whether for misconduct pertaining to
Bank or some other criminal misconduct, result of the officer is held in sealed
cover throughout the pendancy of criminal proceedings which sometime run for
8-10 years also and sometime beyond the normal retirement date as well.
Recommendation
In case of minor penalty, there should be no rigor and no debarment for
promotion and results if any placed in the Sealed Cover should be given effect to.
The maximum debarment / rigor for a major penalty should not be more than one
year.
(x) SANCTION OF PROSECUTION/ARREST

There are different rules in different banks. The authority empowered to
sanction Prosecution of an officer always acts under the influence / pressure of
the CBI / CVO and is not permitted to act independent. Further, while provision
has been made for obtention of sanction of the Competent Authority before
launching prosecution against the officer but no such provision has been made to
obtain similar sanction before arresting the officer.
Recommendation
The power to sanction Prosecution of an officer should be vested in his
Appointing Authority. The ground rules should be laid down for giving sanction
for prosecution and the Appointing Authority or the Disciplinary Authority
should be given a free hand to act independently. Once he declines to give
sanction, he becomes a functus officio and sanction cannot be sought unless
fresh evidence is presented before him. A provision should also be incorporated
to obtain sanction of the Appointing Authority before arresting the officer.
(xi) SUSPENSION & SUBSISTENCE ALLOWANCE.

Though the instructions provide that an officer will not be placed under
suspension before investigation, in practice frequent deviations are
made.Ground rules for ordering suspension of an officer are seldom followed.
Suspensions are mostly effected as a knee jerk reaction and is invariably behind
the back of the officer without giving him any hearing. In most cases the option of
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transferring the officer instead is not even considered. Once the officer is placed
under suspension, there is virtually no review thereof. Review mechanism is
totally absent. Review is generally on the papers and in almost all the cases
reinstatement of the officer takes place only after the proceedings are concluded
and final order is passed. At the time of passing final order, the DA is niggardly in
his treatment of the suspension period. In case of arrest of an officer, there is
provision of deemed suspension after 48 hours of the arrest but there is no
simultaneous provision of a deemed reinstatement after he is acquitted. There
are different rules about payment of subsistence allowance in the government, in
the award staff within the banking industry and within the different banks.
The Disciplinary Authorities are too niggardly in the matter of treatment of
suspension period while passing final order. It has been seen that except in cases
where the officer has been exonerated, suspension period is treated as such
irrespective of the gravity of the penalty awarded and nothing more than the
subsistence allowance already paid is paid at the time of reinstatement which is
grossly unfair. Benefit of Annual increment also is not given even for calculation of
the subsistence allowance.
Recommendation
Ground rules of suspension must be meticulously followed. Suspension of an
officer prior to completion of investigation should not be effected. The option to
transfer the officer to a distant place instead of placing him under suspension
should be mandatorily considered as it is good for the officer as well as Bank. In
the rare case where suspension of an officer is the only choice, the officer should
be given an opportunity to show cause before placing him under suspension.
Review of suspension should be regular and meaningful. Suspension should not
be continued after investigation completed since the accused officer would not
then be in a position to tamper with the evidence or influence the witnesses. In
case, the bank or the Investigating agencies fail to serve the charge sheet within
the time stipulated in the Vigilance Manual or the proceedings are not concluded
within the given time frame the officer should be reinstated. In case of detention
beyond a given period or conviction by a Court, there is a provision for Deemed
suspension of the officer. Similar provision of deemed reinstatement needs to be
provided in cases where regular bail is granted or when the conviction is set
aside.
The rate of Subsistence Allowance should be uniform. For the first three months
half the salary and allowances should be paid and after six months, which is the
period provided for completion of proceedings, subsistence allowance equivalent
to full salary and allowances should be paid.
If the disciplinary proceedings conclude in the imposition of the minor penalty,
the suspension ought to be held as totally unjustified as already held by the
Hon'ble Supreme Court , and full back wages should be paid. The Committeewas
of the view that barring the cases where the penalty awarded is cessation of
service, full salary for the suspension period should be paid as there is no
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justification to continue suspension after the initial few months when
investigation is conducted.
Notional annual increment should be taken into account for the purpose of
calculating subsistence allowance and if salary revision is taking place during the
period of suspension, arrears should be paid for the period prior to date of
suspension and enhanced subsistence allowance from the date of suspension
should be paid.
(xii) DEFENCE REPRESENTATIVES

The position is not uniform. In all the Nationalized Banks, Defence
Representatives are allowed to have 2 pending cases at any point of time as
against 3 cases laid down in the CVC Manual. Only in State Bank of India 3
pending cases are allowed. Further, though there is restriction of 2/3 cases for
the defence representatives, there is no such restriction for the Presenting Officer
or the Inquiring Authority. There are also different provisions in this regard for
officers and award staff. Whereas, in case of officers only serving officer is
allowed to defend in case of workmen any office bearer of a registered Trade
Union whether retired or serving and whether belonging to same or different
bank is allowed to defend the charge sheeted employee. This distinction /
discrimination is wholly unwarranted.
Recommendation
There should be no restriction on the number of cases to be taken up by any
defence representative as in the case of Presenting Officer / Inquiring Authority so
that the Officers are not deprived off the assistance of trained persons who are
not easily available and particularly because officers are not allowed to take the
assistance of lawyers, there is a strong case for allowing the retired officers of the
bank to give this service to the officers of his parent bank.
(xiii) AGREED LIST / LODI.

This list of officers whose honesty / integrity is taken to be doubtful is prepared at
the back of the officers and in many cases it is not as per the letter and spirit of the
laid down norms. Even where after enquiry the fraudulent motive is not proved
and the penalty awarded is not so serious and where acquittal is more or less on
merit, names of officers are kept in the LODI and cases are not scarce when
officers are unnecessarily put under watch by placing their names in the agreed
list and the officers concerned do not even come to know about it because the
sensitive and non sensitive positions are interchangeable. The list of sensitive
positions has been exhaustibly drawn up by including a large number of
assignments which are not sensitive at all. This result into under utilization of
talent and experience and in many cases officer not actually placed in the agreed
list when posted to these assignments get an impression that their integrity are
under watch.Recommendation
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There is a need to revisit the issue and carefully draw the list of sensitive
assignments. The officers whose names are placed in LODI / Agreed list should be
informed so that they can at least make an representation to the Competent
Authority to review their decision. The laid down period of three years / one year
for keeping the name in LODI and Agreed List respectively should be adhered and
not prolonged. On expiry thereof, name should be automatically deleted from
the list.
(xiv JURISDICTION OF CAT.

The Central Administration Tribunals were first established in the year 1985
with the laudable objective of reducing the burden on the various Courts and
reduce pendency as also to provide the persons covered by these tribunals a
speedy and relatively less expensive and effective remedy. The Tribunals have
served the declared objective to a great extent but only the employees of the
Central Govt and other notified organizations are covered. Bank employees have
not been brought within the jurisdiction of these tribunals sofar even though
banks are now owned by the Government. As a result the bank employees are
suffering enormously as they are at the mercy of the bank management and do
not get justice in most of the cases. The handling of the cases in the banks is
highly subjective, perfunctory and whimsical. However, the bank employees in
general and officers in particular keep suffering and do not in most cases
approach the Court of Law because of the huge cost and delays involved.
Recommendation
Since the tribunals are working satisfactorily and have now come to stay and
through these the working class is able to get speedy and less expensive
adjudication of disputes in respect of recruitment and condition of services as
also the employees are able to challenge instances of gross miscarriage of justice
in disciplinary matters where Principles of natural justice are violated at will by
the Disciplinary / Appellate authorities. We strongly recommend that special
administrative tribunals for bank officers and employees should be set up by the
government.
(xv) PROCEEDINGS AFTER RETIREMENT.

The provisions in the Service Rules that Disciplinary proceedings may be
continued after retirement of the officer was kept to take care of the situations
where some fraud or gross misconduct is committed shortly before the
superannuation of the officer. However, in practice this provision is grossly
misused and even abused to stall / stop the normal retirement of the officer by
digging out some act of misconduct committed years before the date of retirement
and charge sheets are issued on the very eve of the actual retirement. Cases are
not lacking where the alleged misconduct was discovered years before the
retirement date but the proceedings like investigation, preliminary explanation
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etc proceed at snails pace and actual charge sheet is issued when the officer is on
the eve of his retirement by invoking the provision to keep him in bank's
servicefor the limited purpose of completing the departmental proceedings.
Resultantly, his retiral benefits are withheld and the officer is made to undergo all
sorts of stigma and social ignominy. Out of sight is out of mind. Once the officer is
not on the rolls, the proceedings progress at even slower pace and the officer
keeps suffering for years on end. Government instructions to put up such cases
at least one year before retirement and these should be subjected to quarterly
review by an authority no less than the CEO himself are not being adhered to.
Recommendation
It should be clearly provided that this particular rule can not be applied for
misconduct which is more than say one year old at the maximum. Further, this
rule 19 (3), 20(3) in some banks should not be invoked in the last quarter unless
some fraud / act of misappropriation has been unearthed. It should be further
provided that if the proceedings are not completed within three, or at the
maximum six months of the date of superannuation, the retrial benefits will be
released. Even when this rule is invoked and officer is retained in service for the
purpose of completion of proceedings, the amount of leave encashment, which is
not a retrial benefit, should not be withheld. Further, such officers are being paid
provisional pension so that the organization is not legally called upon to pay
salary for the period, proceedings remain pending. Provisional commutation
value should also be paid. Similar relief should be provided to officers who are
not pension optees.
(xvi) OTHER ISSUES

(a) Effect of criminal proceedings
Since criminal proceedings takes a long time to conclude and even if decided,
against the officer result in award of a sentence under the law, it should not affect
the promotion and / or retirement of the officer, if it is not related to misconduct
pertaining to official banking transactions.
(b) Provision of additional documents
As in the case of government employees and as per the provisions of the CCA
Rules on which the bank officers disciplinary rules are also based, all the
management documents must be accompanied with the charge sheet and
additional documents should not be allowed to be presented by the prosecution
side unless so agreed by the charged officer since presentation of additional
documents in case of government employees is taken as amendment to the
charge sheet itself. The existing rules about amendment of charge sheets may be
reviewed.
The Personnel Committee discussion note should be pursued for its
implementation.
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NOTE ON FIVE DAY WEEK
The Demand for the introduction of Five Days Banking has already been place by
all the Nine Unions vide their charter of demands. This demand was placed in the
last wage revision as well.
This demand is based only on scientific practices prevailing across the countries.
The first company to introduce five day week was A New England Mill in America
in 1908 and later the Ford Motor Company followed the same in 1926 and
enhanced employee productivity with introduction of five day week.
Today RBI works only for five days. Central Government employees work only for
five days. And the same practice is followed by most of the State Governments as
well. Almost all the IT Sector Companies like Infosys, Wipro, CTS, TCS, etc. work
only for five days and so does the International financial system. Reduction of
stress level amongst the employees is the need of the hour in today's scenario and
many study reports bear the testimony that there is improvement in performance
after adequate rest and family get together. To a query raised in the Parliament
regarding rumours that the Prime Minister wants to introduce six days week, the
Minister of State for Personal Public Grievances and Pensions Mr. Jitendra Singh
informed the Lok Sabha in a written reply that there is no proposal to change the
present five day week for the employees of Central Government Ministries and
Departments. Similarly the Cabinet Secretary, Shri Ajith Seth replied to Shri
Shiva Gopal Mishra, Staff Secretary that there is no such proposal.
As we are aware that a bank holiday in India is a public holiday which is declared
specially for the Banks and other Financial Institutions. All public holidays are
not classified as Bank Holidays. Bank Holidays are declared by Central/State
Governments/ Union Territory under the Negotiable Instruments (NI) Act, 1881.
India is a multicultural and multireligious society and celebrates holidays and
festivals of various religions. So, in addition to the national holidays, many states
and regions have local festivals depending on religious and linguistic
demographics. The Bank employees do not enjoy all the festival holidays as their
counterparts in other govt. organizations do. Moreover, as we have seen that the
bank employees and officers are very hard pressed; like for every govt. sponsored
schemes launched by the govt., for every emergency like situation (as the present
demonetization case), it is the bank employees and officers who are entrusted
with the responsibility to handle the situation. Banking sector is reckoned as a
hub and barometer of the financial system. As a pillar of the economy, this sector
plays a predominant role in the economic development of the country
As a pillar of the economy, banking sector plays a predominant role in the
economic development of the country. Over the last ten years the banking industry
has gone through some sweeping changes. Transformation, Consolidation,
Outsourcing are just some of the most prominent buzzwords that are used to
describe major trends afflicting the banking industry. Moreover, expanding
business activities of the private banks, re-entry of foreign banks, strict regulatory
and disclosure requirements and increased minimum paid up capital
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requirements, modernization of Core Banking Systems, increased automation
and up gradation of IT and development of new products have a significant impact
on the banks employees and the officers. Workload beyond ones capacity,
ambiguity in defining duties & responsibilities, lack of support from superiors,
lack of authority to control resources, absence of autonomy in taking decisions,
work life imbalance due to absence of restricted working hours and virtually no
weekly offs, etc. are some of the sources of stress in the Banks which in turn affect
the mental and physical wellbeing of employees and officers leading to increased
dis-satisfaction level among them. We should also not forget the fact that one of the
most important roles of a bank officer is to take correct credit decision. Unless
they remain in stable physical and mental condition, it is more likely on their part
to take incorrect credit decisions which will affect the bank's financial health in
the long run.
Today in the Banking Industry almost 40% of the Employees and Officers are
youth who look for good salary, perquisites and quality of life for whom five day
week has become a passion. Without introduction of five day week, it will be
impossible to retain good talent in the Banking Industry. The attrition rate is
increasing day by day. Almost 20% of the award staff and 10% of the officers have
left every year. The recent attrition rates across the banking sector bears the
testimony to the same.
As per RBI report, 70% of the Banking transactions are handled by alternate
channels of banking and the percentage is increasing every month. With
approximately 2, 00,000 ATMs and 3.0 lakhs Business Correspondents
rendering service outside the Bank Branches, there are adequate alternate
platforms to carry out the banking needs on holidays. Moreover, with large no. of
Point of Sales (POS) terminals and debit cards / credit cards in operations the
present day customers are at ease to carry out banking transactions on weekend.
Almost all the 11 crore accounts opened under the Jan Dhan Yojana are also
issued with debit cards. With the advent of Digital Banking platform in recent
days, the customers are mobile banking users with 10.00 crores transactions as
on March 2017. All segment customers use internet banking now. We have Self
Service Kiosks (SSK) for pass book printing, coin vending machine, new
generation ATMs where cash can also be deposited and Cash Deposit Machine
(CDM) which are available 24*7. The Cheque Truncation System is also
working almost on all days and cheques are realised within one day whereas
earlier it took upto 14 days for collection of a cheque. So by introducing five day
week the customers are not going to be affected. Our experience on 7 day banking
has shown that the customers are not interested to come to the branches on
holidays. Wherever necessary branches are working on Sundays also and there
are branches in Malls working 24 hours on rotational duty.
There are already companies which are trying four day work with three days off in
other countries and billionaires like Carl Simon and Richard Bronson have
suggested three days working day. Many studies have proved that the productivity
increases if the employees/officers are provided with 2 day weekly off.
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Let us further analyse:
The demand for five (5) day a week in the Banking Sector is a priority. It is based
on scientific practices all over the globe considering health of the employees,
productivity and environmental concerns. We put forward the following which
explains and justifies the need. The ILO has passed many conventions on this
issue, some of which are reproduced below:
Article 19
C047 - Forty-Hour Week Convention, 1935 (No. 47)
Convention concerning the Reduction of Hours of Work to Forty a Week
(Entry into force: 23 Jun 1957) Adoption: Geneva, 19th ILC session (22 Jun
1935) - Status: Instrument with interim status (Technical Convention). Preamble
The General Conference of the International Labour Organisation, Having met at
Geneva in its Nineteenth Session on 4 June 1935, Considering that the question
of the reduction of hours of work is the sixth item on the agenda of the Session;
Considering that unemployment has become so widespread and long continued
that there are at the present time many millions of workers throughout the world
suffering hardship and privation for which they are not themselves responsible
and from which they are justly entitled to be relieved; Considering that it is
desirable that workers should as far as practicable be enabled to share in the
benefits of the rapid technical progress which is a characteristic of modern
industry; and Considering that in pursuance of the Resolutions adopted by the
Eighteenth and Nineteenth Sessions of the International Labour Conference it is
necessary that a continuous effort should be made to reduce hours of work in all
forms of employment to such extent as is possible; adopts this twenty-second day
of June of the year one thousand nine hundred and thirty-five the following
Convention, which may be cited as the Forty-Hour Week Convention, 1935:
Article 1
Each Member of the International Labour Organisation which ratifies this
Convention declares its approval of:
a) the principle of a forty-hour week applied in such a manner that the standard
of living is not reduced in consequence; and
b) the taking or facilitating of such measures as may be judged appropriate
to secure this end; and
c) undertakes to apply this principle to classes of employment in
accordance with the detailed provision to be prescribed by such separate
Conventions as are ratified by that Member.
Article 8
How is work during the weekend regulated?
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ILO Weekly Rest Conventions No. 14 (1921) and No. 106 (1957) require that each
worker have at least 24 hours of uninterrupted rest every seven days. Whenever
possible, the rest day(s) should be simultaneous for all employees of an
undertaking and correspond with the traditions and customs of the country. As
noted above, Arab countries often choose the Friday, instead of the Sunday, as the
rest day for the week.
In China and Hungary, two days off are laid down in national laws.
In European Union (EU) member States, the EU Working Time Directive
(93/104) entitles workers to a minimum of 24 hours of rest per week, principally
on Sunday, in addition to 11 hours of rest each working day (between shifts).
In most countries, although only one day off per week is prescribed in national
legislation, collective agreements or commonly accepted norms set the standard
of a five-day week.
Following are the benefits of a 5 day work week:

1. Reduced fuel costs. Employees would have to endure the dreaded
commute one less day each week, thereby saving money at the pump with
reduced fuel consumption.
2. Decreased absenteeism. On a six-day schedule, employees are forced to
cram their one day off with personal errands, chores, games, and social
outings. By the time Monday comes around, there hasn't been a minute of
rest and employees are tired. So they call out of work. This wouldn't
happen so frequently if employees had a second day to accomplish the
work they have to do outside of office.
3. Increased productivity. It's a well-established principle of productivity that
workers become less efficient where no deadline looms. That's why we're
more efficient in the week before vacation—we know we have to get it done
by the time we leave. The same idea is transferable to a shortened
workweek. Employees are least productive on Saturdays so why not just
eliminate them altogether?
4. Improved job satisfaction and morale. Satisfaction with what goes on in the
workplace may be tied to what goes on outside of the workplace.
Employees who spend more time with family and friends, who have the
flexibility of two days off, will return to work refreshed.
5. Reduced personnel turnover. Not surprisingly, #4 leads to #5. Happier
employees tend to leave less often. If they like the job, they're more likely to
stick around.
6. Reduced energy costs. By closing for two, instead of one day each week,
Banks stand to reduce substantial energy costs. These costs can be
significant.
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7. Improved work-life balance. As a result of the added day, employees who
work a five-day week will have more time to spend with their families and
friends.
8. Reduced traffic congestion. This potential effect may be seen largely on
Saturday, which is the day most employers are converting to a non-working
day.
The First Company to give 5 day week:

So, who gave us the 5 day, 8 hours per day, work week? Was it really the unions;
was it really higher regulations? No, the historical answer is that it was Heny Ford
who gave us the 5 day, 8 hours per day, work week. Ford was tired of continuously
losing good employees, he was trying to increase employee retention and at the
same time increase profits, so he basically doubled wages and implemented a 5-
day work week, and in the process effectively invented the modern weekend. It is
Henry Ford who is widely credited with contributing to the creation of a middle
class in the United States.
In addition, if you look at why Henry Ford did this, you will see that his reasons
had nothing to do with charity, and everything to do with increasing profits and
dealing with the forces of competition.
In 1926 Henry Ford began shutting down his automotive factories for all of
Saturday and Sunday. In 1929 the Amalgamated Clothing Workers of America
was the first union to demand a five-day work week and receive it. After that, the
rest of the United States slowly followed, but it was not until 1940 that the two-day
weekend began nationwide.
Actual work week lengths have been falling in the developed world. Every
reduction of the length of the work week has been accompanied by an increase in
real per-capita income.
In the United States, the work week length reduced slowly from before the Civil
War to the turn of the 20th century. A rapid reduction took place from 1900 to
1920, especially between 1913 and 1919, when weekly hours fell by about eight
percent. In 1926, Henry Ford standardized on a five-day workweek, instead of the
prevalent six days, without reducing employees' pay. Hours worked stabilized at
about 49 per week during the 1920s, and during the Great Depression fell below
40. During the Depression, President Herbert Hoover called for a reduction in
work hours in lieu of layoffs. Later, President Franklin Roosevelt signed the Fair
Labour Standards Act of 1938, which established a five-day, 40-hour workweek
for many workers. The proportion of people working very long weeks has since
risen, and the full-time employment of women has increased dramatically.
The New Economics Foundation has recommended moving to a 21 hour standard
work week to address problems with unemployment, high carbon emissions, low
well-being, entrenched inequalities, overworking, family care, and the general
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lack of free time. The Centre for Economic and Policy Research states that
reducing the length of the work week would slow climate change and have other
environmental benefits.
In our country:
As per one study, the average life expectancy of a bank officer is only 63 years
whereas for others the figure stands at 68.3 years. In the last 5 years, there has
been a spate of cases reporting the death of bank officers while in harness. It is a
very tragic development. Bank officers do not live longer, only because of the work
pressure coupled with no virtual weekly offs available to them, while in service.
Now, let us look at some legal rights. The Factories Act provides provision on
weekly rest. Workers are generally entitled to at least 24 hours of weekly rest on
the first day of the week, i.e., Sunday. The weekly rest period is reckoned as a paid
time. Workers may be required to work on weekly holiday; in this case, he/she is
entitled to the substitute holiday three days before or after the usual weekly
holiday. Even in the case of holiday substitution, workers must be given a weekly
holiday in every 10 days. If an organization is exempted from the provision related
to weekly holiday and workers are not granted their weekly holidays, an equal
number of compensatory holidays have to be granted within 2 months. The
Weekly Holidays Act, Shops and Establishments Act, etc. also state in the same
tune for the workers and the employees.
Although the Bank Officers do not come under the purview of the Regulations &
Acts which make the weekly off compulsory like Factories Act, Weekly Holidays
Act, Shops and Establishments Act, etc, the Articles enshrined in the Human
Rights is applicable to one and all the people. The Article 24 of Human Rights
deals with Right to Rest for each and every human being. They are commonly
understood as inalienable fundamental right "to which a person is inherently
entitled simply because she or he is a human being," and which are "inherent in all
human beings" regardless of their nation, location, language, religion, ethnic
origin, their employment agreement and service rule or any other status. They are
applicable everywhere and at every time in the sense of being universal and
egalitarian in the sense of being the same for everyone. Hence, the bank officers
cannot be an exception to this article simply because of the fact that their service
rule obliges them to attend the office 24/7 without any weekly off. They are human
beings and cannot be expected to work like a machine and hence cannot be
exploited by virtue of their service rules. Moreover, the declared holiday on the
second and fourth Saturday of every month has been made as part of the
agreement arrived at during the 7th Joint Note between the IBA and bank
employees' unions last year.
This has been earned after a long struggle and bargaining with the IBA and the
govt. and we should not let it go at the whims of the management and thereby
toying with the lives of our officers. In this context, we would also like to draw your
learned observation to the IBA Letter No. CIR/HR&IR/665/2015-16/2270 dated
March 11, 2016 addressed to all the Organization heads who are the parties to the
Bipartite Settlement. In the said letter, the IBA clearly stated to avoid calling the
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officers for duty on Sundays/holidays as far as possible. But, it is our misfortune
that even the letter issued by the IBA is also not given the due consideration and
the officers are summoned for duty even at the drop of a hat by the bank
management.
In the light of the revolutionary changes that have taken place as regards the
technology initiative, such as Core Banking Solution, Telebanking, Internet
banking, Kiosk Banking, Mobile banking, Cash Deposit Banking, any time
anywhere banking and also the banking expansion through a large ATM network,
there is a strong case for immediate consideration of demand for introduction of a
5 day week. This will give a big boost to Digital India Campaign and we can spent
some time for a massive digital financial literacy campaign.
This will also reduce global warming to an extent. Further, 5-day week will provide
good health to bank employees and reduce expenditure on electricity and fuel.
In our country all central government establishments, RBI, forex department,
Parliament, State assemblies, Treasury, IT/BT industries observe a 5-day week.
All IT companies spearheaded by Infosys and WIPRO adhere to 5 day week.
Foreign Banks in India also follow 5 day week. Majority of State Government
offices remain closed on the second Saturday of the month. Many State
Governments follows 5 day week. Therefore banking industry switching over to 5-
day week will not make much difference to routine business, rather it will increase
productivity, reduce expenditure and give employee satisfaction.
So there is total justification for 5 day week to be introduced in the Banking
Industry following the footsteps of RBI which has defined 8 hours work, five day
week and flexible working hours
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NOTE ON REGULATED WORKING HOURS
The International Labour Conventions have provided for regulation of working

hours. In USA, average working hours is 33 hours in five days. In Australia it is
35 hours. In France it is 30 hours and in Netherlands 27 hours in a week. In
France working after 6 o clock is banned and in some countries workers who
work beyond 8 hours do not get insurance coverage. In our Country also, the
demand for 8 hours work came 26 years before the Chicago struggle led by the
Railway workers of Howrah and today in the Government as well as the Private
Sector 8 hours work is regulated. It is interesting to recall that way back in 1928
John Maynard Keynes predicted that with technological advancement a work
week will come down to 15 hours within 100 years.
A study of the American Journal of Epidemiology found that those who worked
55 hours per week performed poorly on some mental tasks than those who
worked 40 hours per week.
Regulated working hours has been a long standing demand of the officers in the
banking industry . The Joint representations made by the four officers'
organizations during 6th and 7th Joint note exercises bore certain developments.
But, with the reduction in employees strength due to embargo on recruitment for
10 years and introduction of voluntary retirements schemes the work load of
officers have increased at an alarming proportion. Thousands of Branches of
different Banks are managed by single officers where it is impossible to complete
the work within the working hours. Today, it has become common for officers to
work from 9 am to 9 pm, which stands way above the standard norm of 48 hours
in a week practised in many developed countries. In addition to that introduction
of e-corners, point of sales machines, increase in ATMs and with number of
business correspondents all of which have to be monitored, officers practically
are working late and also on holidays without proper remuneration. With the
introduction of Cheque Truncation System the RBI has reduced the number of
holidays and practically those who are working in the clearing system have to
compulsorily work late and also on holidays. Moreover, the Government
frequently gives us targets like the one under the Jan Dhan Yojana, Linkage of
Aadhaar cards and Income Tax Collection. Off late the National Lok Adalats were
also conducted on 2nd and 4th Saturdays. On many occasions, Banks have to keep
the branches open on holidays under the instructions of the Govt of India. All
these led to acute fatigue among the officer fraternity and which led to reduction
in the productivity of the officers too. Whereas the award staff get overtime for
sitting late or for working on holidays, officers either get nothing or a paltry sum.
So it has become imperative to have regulated working hours.
Due to untoward incidents like robbery and insurgent attack the Police
department has issued instructions repeatedly in many states to the Banks to
close the branches before it gets dark. With the advent of digital banking platform
and the aggressive promotion of the same after the demonetisation exercise
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paves way for the regulated working hours for the bank officials but on the
contrary bank officials are forced to work on extended hours as well as on the
holidays to promote the same. All these led to a contrary move in providing
regulated working hours to the officer community.
Most of the Government Offices and Enterprises work from 10 am to 5 pm with
half an hour lunch break making it practically 6 ½ hours work.In the Banking
Industry, the Reserve Bank of India has introduced regulated working hours
officially on 12th July 2012 along with flexible timing. (CO HRMD Circular
No.G.28/240/04.01.14/2012-13). Even IDBI Bank has regulated working hours
from 2009.
Hence, it is imperative for us to bring regulated working hours with a stipulation
of 6 ½ hours work. In case of emergency where the officer has to work beyond this
they have to be compensated with one day compensatory off coupled with
adequate monetary compensation..
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NOTE ON LEAVE FARE CONCESSION
As per the 7th Joint Note “Leave fare concession is as follows:
1. During each block of 4 years an officer shall be eligible for leave travel
concession for travel to his place of domicile once in each block of 2 years.
Alternatively he may travel in one block of 2 years to his place of domicile and
in another block of 2 years to any place in India by the shortest route.
2. Alternatively an Officer by exercising an option any time during the four year
block or 2 year block as the case may be surrender and encash his LTC other
than travel to place of domicile” upon which he shall be entitled to receive an
amount equivalent to 100% of the eligible fare for the class of travel by train to
which he is entitled upto a distance of 4500 Kms(one way) for officers in JMG
Scale I and MMG Scale II & III and 5500 Kms ( one way) for Officers in SMG
Scale IV and above. An Officer opting to encash his LTC shall prefer the claim
for himself / herself and his / her family members only once during the block /
term in which such encashment is availed off. The facility of encashment of
privilege leave while availing of leave fare concession is also available while
encashing the facility of LTC.
3. The mode and class by which an officer may avail of Leave Travel Concession
shall be the same as the officer is normally entitled to travel on transfer and
other terms and conditions subject to which the Leave Travel Concession
may be availed of by an officer, shall be as decided by the Board from time to
time.
Provided that w.e.f. 1st May 2010 an officer in Junior Management Grade Scale I
while availing LTC will be entitled to travel by air in the lowest fare economy class
in which case the reimbursement will be the actual fare or the fare applicable to
AC 1st Class fare by train for the distance travelled whichever is less. The same
rules shall apply when an officer in Middle Management Grade Scale II and
Middle Management Grade Scale III while availing LTC where the distance is less
that 1000 kms.
During the last wage revision exercise, the following 3 alternatives have been
submitted to the IBA.
1. To Continue to present scheme with provision to travel abroad
2. To adopt the RBI scheme
3. Monitory compensation instead of LFC reimbursement.
The RBI scheme was revised on 1st July 2014 and further reviewed on 18th July
2014 based on CVC guidelines. The scheme provides an entitlement of
Rs.1,07000/- for Grade A to E and Rs. 1,30,000/- for Grade F and above. Even for
Cl III employees Rs.107000/- is eligible. This amount has been arrived at on the
100
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basis of Air fare as on that date, taking into account that 50% of the entitlement
should go towards the Air fare. The RBI scheme provides 50% or more out of the
above entitlement towards Air fare and 25% towards local site seeing expenses
without production of any evidence. In addition it provides for 15% incidental
expenditure towards travel by taxi / train / bus from home to the Airport, visa
charges, medical insurance premium etc. (originally it was 20%) The scheme also
provides for package tours organised by travel agents approved by IATA. Even for
package tours 15% incidental expenditures is provided. The scheme also
provides for 2 journeys in 4 years which can be either 2 sets of LFC or one LFC and
one Home travel. In case of encashment it provides for AC First Class fare for
4500 kms (one way)
Hence the above scheme which has also segregated foreign LFC and domestic LFC
should be made available to Bank Officers.
In case of monitory compensation the entitlement should 140000/-so that a 15%
incidental expenditure is added. We produce herewith the actual flight fare
which our officers have recently claimed for their LFC.
Chennai – Delhi- Amritsar = Rs. 46901/- (one way) –Rs.93802/-(both ways)
Chennai – Delhi – Srinagar = Rs.48187/-(one way)-96374/-(both ways)
Trivandram – Srinagar = Rs.52917/-(one way) – 105834/- (both ways)
Trivandram - Varanasi = Rs.51496/- (one way) – 102992/- (both ways)
Trivandram – Lilabari = Rs.60689/-(one way) -121378/- (both ways)
It will be advantageous to the Banks to accept the RBI scheme with ceiling of
entitlement as Rs. 140,000/- upto Scale V (Rs.121378/- + Rs.18207 (15%) ) which
is still inferior to the RBI scheme which provides another 25% towards other
expenses. If Banks go for monitory compensation 100% of the Officers will claim
whereas if the actual LFC similar to the RBI scheme is given only 50 – 60% of the
Officers will utilise that. The same RBI entitlement is also available in NABARD.
What we are claiming is still inferior to RBI scheme.
The LFC scheme for Award staff is enhanced by providing for AC 2 tier to clerical
staff and AC 3 tier to subordinate staff. So our demand is reasonable.
Air travel should be permitted to all officers including Junior Management Scale.
Instead of LFC and HTC the Officer should be permitted to avail 2 LFCs in a 4 year
block as many officers do not avail HTC or have no opportunity to avail HTC.
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NOTE ON OUTSOURCING IN BANKS
It is very pertinent to note that there have been multiple instances in recent years
where banks had to face serious reputational and financial debacles due to a third
party's (outsourcing agency) error. Several years ago a retail bank left millions of
customers unable to withdraw funds or view their balances due to a computer
failure, which occurred as one of the bank's IT vendors was performing a software
update. The failure resulted in paralysis of critical banking systems –a costly
error. Another one had to compensate thousands of customers whose personal
information had been stolen and sold illegally. The data had been stored by a
vendor on a USB stick which was subsequently lost. Scandals have also been
frequent in the Banking Industry due to the practice of outsourcing of work to the
third parties.
By increasing the business through outsourcing, the banks and financial
organizations in India have imported significant operational risks into the
respective organisations, which resulted in serious financial losses and
reputational damage.
Banks now outsource many of their jobs like ATM Management, Telebanking,
Customers' Complaints Redressal, Debit Cards and Credit Cards issuance,
Billing, Records Maintenance, etc. to third parties. But, how many possess
sound knowledge of what they are doing? Or do they have all-round experience in
that field! Banks have been engaging the services of private security guards for
branches and ATMs. Are not the banks aware that only 60% of what they pay
reaches the guards? The outsourced staff themselves poses risks and threats to
the banks they are associated with. There were so many incidents in the past in
every bank to prove this. There is no guarantee that the same set of people will be
deployed every day or even for a period of 6 months continuously. Therefore, it
will be difficult to have an effective surveillance on their movements and activities
always. There will be a great deal of uncertainty as to who performs what job.
Regular staff cannot be suddenly asked to perform the jobs outsourced on a
regular basis. Since the agency pays them only a pittance, as compared to a
regular staff member doing the same or similar job, there will be no motivation
and loyalty for the outsourced persons; just to leave aside the sense of
belongingness and loyalty towards the organization.
Moreover, as the outsourced staffs do not have basic idea of how a bank branch
works, they cannot handle the customers with ease and confidence which will
negatively impact the trust of the customers. The persons outsourced themselves
do not have proper knowledge of the risks involved in the functions handled by
them. Many a time, it is observed that they commit some grave mistakes or
blunders, landing themselves and the bank in a precarious situation. It is very
difficult to clear the mess created by them and recover the loss attributable to
them as they are not the permanent employees.
It is also worth mentioning that by virtue of their long association with the regular
staff, some of the outsourced staff gain access to the User IDs and Passwords of
regular staff in course of time. This gives them the opportunity to commit frauds
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and indulge in other types of mischief and irregularities which in turn tarnishes
the image of the Bank and brings misfortune for the concerned permanent staff
whose Id has been used.
It has also been seen that some outsourced personnel are encouraged to handle
regular work due to acute shortage of permanent staff. There are instances where
the outsourced staff had introduced themselves as regular staff to the strangers
and newcomers and collected cash from them and swindled the same. In case of
customers who have not registered for SMS Alerts, they cannot find out this
mischief/fraud immediately. In case of security guards accompanying cash meant
for replenishment in ATMs and those entrusted with the duty of guarding the
ATMs, it has come to the notice that some of them indulge in serious crime of
decamping with huge cash even by assaulting other staff/general public. Recently
SBI stopped outsourcing of ATM's on branch and regular staff are managing them
better.
We should not forget the fact that ours is the second most populated country in the
world with great degree of unemployment or under-employment. Hence, it is a
crime against the society to deny employment opportunity to the millions of
aspiring youth on a permanent basis. It also kills the reservation policy. Further,
the banks are earning huge profits with which a few hundreds of additional
vacancies can be filled in every year on a permanent basis, without any financial
strain. On a different note, creating new, regular employment on a large scale will
contribute to higher national income, additional demand for goods and services,
growth in GDP and collection of taxes which will have a positive impact on the
national economy as a whole. Myopic ideas of a few bureaucrats and politicians
may encourage outsourcing of persons for doing regular work but that is not going
to help either the banks or the economy as a whole in the long-run. The gains
accruing from employing people on a regular basis far outweighs the gains/
savings arising out of outsourcing.
Further, it is also significant to note that Indian banks cannot outsource core
banking functions to the third parties. According to the guidelines on outsourcing
of banking activities issued by the Reserve Bank of India, banks also cannot
outsource the core activities. RBI also made it very clear that outsourcing does not
diminish the bank's obligations to customers. Banks should not engage in
outsourcing activities that would weaken their internal control or compromise
their business conduct or reputation.
Hence, it is very essential for the Banks to stop hiring the services of the
outsourcing agencies and staff to carry out the day to day functions of the Banks
for the overall development of the Banks and the Indian Economy as a whole.
Appointing business correspondence is also outsourcing of regular banking
activities. There are around 3 lac BCs. They should be converted into regular
emplopyees based on their qualification and performance. These customer
service points can be converted into small branches and take care of lending
activities also
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JUDGEMENT ON ACCUMALATION OF LEAVE
Punjab-Haryana High Court

Kulbir Singh vs State Of Haryana & Ors on 5 October, 2016
204 (1)
IN THE HIGH COURT OF PUNJAB AND HARYANA
AT CHANDIGARH
CWP No. 25427 of 2013 (O/M)

Date of decision : 5.10.2016 Kulbir Singh ....... Petitioner (s)
Versus
State of Haryana and others ....... Respondent (s)
CORAM : HON'BLE MR. JUSTICE KULDIP SINGH Present:- Mr. Ramesh Goyat, Advocate,
for the petitioner.
Mr. Naveen Sheoran, Deputy A.G. Haryana.
1. Whether the Reporters of local newspaper may be allowed to see the judgment ?
2. To be referred to the Reporter or not.
3. Whether the judgment should be reported in the digest ?
-.- -.-
KULDIP SINGH J. (ORAL)

The petitioner has impugned the order dated 8.10.2013 (Annexure-P-3), vide which arbitrary
ceiling has been put by the respondents on more than 300 days un-utilized earned leaves of
petitioner. The petitioner claims that he is entitled to leave encashment for 300 days un-utilized
earned leaves, as per the Government notication dated 12.8.1998 (Annexure-P-4), followed by
claricatory letters dated 30.7.2010 and 17.8.2010 (Annexure-P-5 Colly.) The petitioner was
working as an Assistant Turner with the respondent-department and ultimately retired as a
Turner, vide order dated 6.4.2011 with effect from 30.4.2011. The petitioner was granted the
benet of 118 days of un-utilized earned leaves and the payment of leave encashment was
accordingly disbursed to him. The petitioner claims that he had got more that 249 days earned
leave to his credit, therefore, he is entitled to 249 days leave encashment.
For Subsequent orders see CWP-13702-2014 1 of 3 It comes out that subsequently, the
respondents re-calculated and came to the conclusion that the un-utilized earned leave is 148
days. Accordingly, the benet was released to the petitioner. The petitioner still maintains that he
has un-utilized earned leave of 249 days to his credit and he is accordingly entitled to the said
benet.
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Both the parties were directed to le their calculations of the earned leave. The petitioner
accordingly led his own calculation sheet and respondents led their own calculation sheet.
Both the calculation sheets have been compared.
I have heard the learned counsels for the parties and have also carefully gone through the le.
It comes out that before the year 1998, the petitioner was entitled to maximum leave encashment
of 240 days. After the year 1998, he is entitled to maximum 300 days leave encashment. The
calculations by the respondents shows that a deliberate mischief has been done in calculating the
earned leave. The chart shows that on 30.7.1991, the petitioner has 279 days of earned leave to
his credit. Since at that time, the maximum leave encashment was restricted to 240 days,
therefore, the said earned leave was reduced to 240 days and subsequent leave taken by the
petitioner was accordingly deducted from said 240 days. Similarly, on 30.8.1993, the petitioner
had 244 days of earned leave to his credit, which was again reduced to 240 days and on
12.3.1996, the petitioner had 357 days earned leave, which was reduced to 300 days.
I am of view that the approach of the respondents is wholly illegal. If an employee is entitled to
leave encashment for particular days, that does not mean that the un-utilized earned leave is to be
accumulated For Subsequent orders see CWP-13702-2014 2 of 3 upto the maximum limit, upto
which leave encashment is allowed on retirement. The un-utilized earned leave will continue to
accumulate and only at the time of retirement, the benet of maximum leave encashment, as
permissible under the rules, is to be given and the remaining un-utilized leaves will lapse. It
being so, the impugned order is set aside. The calculations submitted by the petitioner are
accepted and that of the respondents are set aside. The respondents are ordered to calculate the
un- utilized earned leave of the petitioner of 249 days and pay the petitioner the leave
encashment equal to remaining 101 days with interest at the rate of 9% per annum from the date
of retirement till payment. The payment of remaining amount of the leave encashment be made
within two months from the date of receipt of copy of this judgment. The department is also
directed to hold an inquiry and take follow up action and x the responsibility of the delinquent
ofcial, who made the wrong calculations, which resulted in dragging the respondent-
department to the Court, resulting the un-necessary expenses to State exchequer and wastage of
time of the Court.
The present writ petition is allowed.
(KULDIP SINGH)
JUDGE
5.10.2016
sjks
Whether speaking / reasoned : Yes
Whether Reportable : No
For Subsequent orders see CWP-13702-2014

3 of 3
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106
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107
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It is stated in the Gita
“where there is Dharma there is victory”
or, in other words, success goes hand in hand
with righteousness.
108
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A02
Code on Wages Bill
2017
<< 130 >>

AS INTRODUCED IN LOK SABHA
Bill No. 163 of 2017
THE CODE ON WAGES, 2017

——————
ARRANGEMENT OF CLAUSES
——————
CHAPTER I
PRELIMINARY
CLAUSES
1. Short title, extent and commencement.
2. Definitions.
3. Prohibition of discrimination on ground of gender.
4. Determination of disputes with regard to same or similar nature of work.
CHAPTER II
MINIMUM WAGES
5. Payment of minimum rate of wages.

6. Fixation of minimum wages.
7. Components of minimum wages.
8. Procedure for fixing and revising minimum wages.
9. Power of Central Government to fix national minimum wage.
10. Wages of employee who works for less than normal working day.
11. Wages for two or more classes of work.
12. Minimum time rate wages for piece work.
13. Fixing hours of work for normal working day.
14. Wages for overtime work.
CHAPTER III
PAYMENT OF WAGES
15. Mode of payment of wages.

16. Fixation of wage period.
17. Time limit for payment of wages.
18. Deductions which may be made from wages.
19. Fines.
20. Deductions for absence from duty.
21. Deductions for damage or loss.
22. Deductions for services rendered.
23. Deductions for recovery of advances.
24. Deductions for recovery of loans.
25. Chapter not to apply to Government establishments.
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(ii)
CLAUSES
CHAPTER IV
PAYMENT OF BONUS
26. Eligibility for bonus, etc.
27. Proportionate reduction in bonus in certain cases.
28. Computation of number of working days.
29. Disqualification for bonus.
30. Establishment to include departments, undertakings and branches.
31. Payment of bonus out of allocable surplus.
32. Computation of gross profits.
33. Computation of available surplus.
34. Sums deductible from gross profits.
35. Calculation of direct tax payable by employer.
36. Set on and set off of allocable surplus.
37. Adjustment of customary or interim bonus against bonus payable under this Code.
38. Deduction of certain amounts from bonus payable.
39. Time limit for payment of bonus.
40. Application of this Chapter to establishments in public sector in certain cases.
41. Non-applicability of this Chapter.
CHAPTER V
ADVISORY BOARD
42. Central Advisory Board and State Advisory Boards.
CHAPTER VI
PAYMENT OF DUES, CLAIMS AND AUDIT
43. Responsibility for payment of various dues.
44. Payment of various undisbursed dues in case of death of employee.
45. Claims under Code and procedure thereof.
46. Reference of disputes under this Code.
47. Presumption about accuracy of balance-sheet and profit and loss account of
corporations and companies.
48. Audit of accounts of employers, not being corporations or companies.
49. Appeal.
50. Records, returns and notices.
CHAPTER VII
FACILITATOR
51. Appointment of Facilitators and their powers.
CHAPTER VIII
OFFENCES AND PENALTIES
52. Cognizance of offences.

53. Penalties for offences.
54. Offences by companies.
55. Composition of offences.
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(iii)
CLAUSES
CHAPTER IX
MISCELLANEOUS
56. Bar of suits.
57. Protection of action taken in good faith.
58. Burden of proof.
59. Contracting out.
60. Effect of laws, agreements, etc., inconsistent with this Code.
61. Delegation of powers.
62. Exemption of employer from liability in certain cases.
63. Protection against attachement of assets of employer with Government.
64. Power of Central Government to give directions.
65. Savings.
66. Power of appropriate Government to make rules.
67. Power to remove difficulties.
68. Repeal and savings.
THE FIRST SCHEDULE.
THE SECOND SCHEDULE.
THE THIRD SCHEDULE.
THE FOURTH SCHEDULE.
<< 133 >>

AS INTRODUCED IN LOK SABHA
Bill No. 163 of 2017

A
BILL
to consolidate and amend the laws relating to wages and bonus and matters
connected therewith or incidental thereto.
BE it enacted by Parliament in the Sixty-eighth Year of the Republic of India as follows:—
CHAPTER I
PRELIMINARY
1. (1) This Act may be called the Code on Wages, 2017. Short title,
extent and
5 (2) It extends to the whole of India. commencement.
(3) It shall come into force on such date as the Central Government may, by notification
in the Official Gazette, appoint; and different dates may be appointed for different provisions
of this Code and any reference in any such provision to the commencement of this Code
shall be construed as a reference to the coming into force of that provision.
<< 134 >>

2
Definitions. 2. In this Code, unless the context otherwise requires,––

(a) “accounting year” means the year commencing on the 1st day of April;
(b) “Advisory Board” means the Central Advisory Board or, as the case may be,
the State Advisory Board, constituted under section 42;
(c) “agricultural income-tax law” means any law for the time being in force relating 5
to the levy of tax on agricultural income;
(d) “appropriate Government” means,––
(i) in relation to, an establishment carried on by or under the authority of
the Central Government or the establishment of railways, mines, oil field, major
ports, air transport service, telecommunication, banking and insurance company 10
or a corporation or other authority established by a Central Act or a central
public sector undertaking or subsidiary companies set-up by central public
sector undertakings or autonomous bodies owned or controlled by the Central
Government, including establishment of contractors for the purposes of such
establishment, corporation or other authority, central public sector undertakings, 15
subsidiary companies or autonomous bodies, as the case may be, the Central
Government;
(ii) in relation to any other establishment, the State Government;
(e) “company” means a company defined in clause (20) of section 2 of the
Companies Act, 2013; 2 0 18 of 2013.
(f) “contractor”, in relation to an establishment, means a person who undertakes

to produce a given result for the establishment, other than a mere supply of goods or
articles of manufacture to such establishment, through contract labour or who supplies
contract labour for any work of the establishment and includes a sub-contractor;
(g) “co-operative society” means a society registered or deemed to be registered 25
under the Co-operative Societies Act, 1912, or any other law for the time being in force 2 of 1912.
in any State relating to co-operative societies;
(h) “corporation” means anybody corporate established by or under any Central
Act, or State Act but does not include a company or a co-operative society;
(i) “direct tax” means–– 30
(I) any tax chargeable under the––

(A) Income-tax Act, 1961; 43 of 1961.
(B) Companies (Profits) Surtax Act, 1964; 7 of 1964.
(C) agricultural income-tax law; and

(II) any other tax which, having regard to its nature or incidence, may be 35
declared by the Central Government, by notification, to be a direct tax for the
purposes of this Code;
(j) “employee” means, any person (other than an apprentice engaged under the
Apprentices Act, 1961), employed on wages by an establishment to do any skilled, 52 of 1961.
semi-skilled or unskilled, manual, operational, supervisory, managerial, administrative, 40
technical or clerical work for hire or reward, whether the terms of employment be
express or implied, and also includes a person declared to be an employee by the
appropriate Government, but does not include any member of the Armed Forces of the
Union;
(k) “employer” means a person who employs one or more employees in his 45
establishment and where the establishment is carried on by any department of the
Central Government or the State Government, the authority specified, by the head of
<< 135 >>

3
such department, in this behalf or where no authority, is so specified the head of the
department and in relation to an establishment carried on by a local authority, the chief
executive of that authority, and includes,—
(i) in relation to an establishment which is a factory, the occupier of the
63 of 1948. 5 factory as defined in clause (n) of section 2 of the Factories Act, 1948 and, where
a person has been named as a manager of the factory under clause (f) of
sub-section (1) of section 7 of the said Act, the person so named;
(ii) in relation to any other establishment, the person who, or the authority
which, has ultimate control over the affairs of the establishment and where the
10 said affairs is entrusted to a manager or managing director, such manager or
managing director; and
(iii) contractor;
(l) “establishment” means any place where any industry, trade, business,
manufacture or occupation is carried on and includes Government establishment;
15 (m) “Facilitator” means a person appointed by the appropriate Government under
sub-section (1) of section 51;
(n) “factory” means the factory as defined in clause (m) of section 2 of the
63 of 1948. Factories Act, 1948;
(o) “Government establishment” means any office or department of the
20 Government or a local authority;
43 of 1961. (p) “Income-tax Act” means the Income-tax Act, 1961;
(q) “industrial dispute” means,—
(i) any dispute or difference between employers and employers, or between
employers and workers or between workers and workers which is connected
25 with the employment or non-employment or the terms of employment or with the
conditions of labour, of any person; and
(ii) any dispute or difference between an individual worker and an employer
connected with, or arising out of, discharge, dismissal, retrenchment or
termination of such worker;
30 (r) “minimum wage” means the wage fixed under section 6;
(s) “notification” means a notification published in the Gazette of India or the
Official Gazette of a State, as the case may be, and the expression “notify” with its
grammatical variations and cognate expressions shall be construed accordingly;
(t) “prescribed” means prescribed by rules made by the appropriate Government;
35 (u) “same work or work of a similar nature” means work in respect of which the
skill, effort and responsibility required are the same, when performed under similar
working conditions by employees and the difference if any, between the skill, effort
and responsibility required for employees of any gender, are not of practical importance
in relation to the terms and conditions of employment;
40 (v) “State” includes a Union territory;
(w) “Tribunal” shall have the same meaning assigned to it in clause (r) of section 2
14 of 1947. of the Industrial Disputes Act, 1947;
(x) “wages” means all remuneration, whether by way of salary, allowances or
otherwise, expressed in terms of money or capable of being so expressed which would,
45 if the terms of employment, express or implied, were fulfilled, be payable to a person
employed in respect of his employment or of work done in such employment, and
includes,—
(i) any remuneration payable under any award or settlement between the
parties or order of a court;
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4
(ii) any remuneration to which the person employed is entitled in respect

of overtime work or holidays or any period of leave;
(iii) any additional remuneration payable under the terms of employment,
whether called a bonus or by any other name;
(iv) any sum which by reason of the termination of employment of the 5
person employed is payable under any law, contract or instrument which provides
for the payment of such sum, whether with or without deductions, but does not
provide for the time within which the payment is to be made;
(v) any sum to which the person employed is entitled under any scheme
framed under any law for the time being in force; 10
(vi) any house rent allowance,

but does not include––
(A) any bonus payable under this Code, which does not form part of the
remuneration payable under the terms of employment or which is not payable under
any award or settlement between the parties or order of a court or Tribunal; 15
(B) the value of any house-accommodation, or of the supply of light, water,

medical attendance or other amenity or of any service excluded from the computation
of wages by a general or special order of the appropriate Government;
(C) any contribution paid by the employer to any pension or provident fund,
and the interest which may have accrued thereon; 20
(D) any travelling allowance or the value of any travelling concession;

(E) any sum paid to the employed person to defray special expenses entailed on
him by the nature of his employment; or
(F) any gratuity payable on the termination of employment in cases other than
those specified in sub-clause (iv): 25
Provided that, for the purposes of Chapter IV, “wages” means all remuneration
(other than remuneration in respect of overtime work) capable of being expressed in
terms of money, which would, if the terms of employment, express or implied, were
fulfilled, be payable to an employee in respect of his employment or of work done in
such employment and includes dearness allowance, that is to say, all cash payments, 30
by whatever name called, paid to an employee on account of a rise in the cost of living,
but does not include,––
(i) any other allowance which the employee is for the time being entitled to;
(ii) the value of any house accommodation or of supply of light, water,
medical attendance or other amenity or of any service or of any concessional 35
supply of foodgrains or other articles;
(iii) any travelling concession;
(iv) any bonus including incentive, production and attendance bonus;
(v) any contribution paid or payable by the employer to any pension fund
or provident fund or for the benefit of the employee under any law for the time 40
being in force;
(vi) any retrenchment compensation or any gratuity or other retirement
benefit payable to the employee or any ex gratia payment made to him;
(vii) any commission payable to the employee:
Provided further that for calculating the wages under the first proviso for 45
the purposes of payment of bonus, if the payments made by the employer to the
employee under clauses (i) to (vii) exceeds one-half of the all remuneration
<< 137 >>

5
specified under the said proviso, the amount which exceeds such one-half shall
be deemed as remuneration and shall be accordingly added in all remuneration
under that proviso.
Explanation.––Where an employee is given in lieu of the whole or part of the
5 wages payable to him, free food allowance or free food by his employer, such food
allowance or the value of such food shall, for the purposes of the first proviso, be
deemed to form part of the wages of such employee;
(y) “worker” means any person (except an apprentice as defined under clause (aa)
52 of 1961. of section 2 of the Apprentices Act, 1961) employed in any industry to do any manual,
10 unskilled, skilled, technical, operational or clerical work for hire or reward, whether the
terms of employment be express or implied, and includes working journalists as defined
in clause (f) of section 2 of the Working Journalists and other Newspaper Employees
45 of 1955. (Conditions of Service) and Miscellaneous Provisions Act, 1955 and sales promotion
employees as defined in clause (d) of section 2 of the Sales Promotion Employees
11 of 1976. 1 5 (Conditions of Service) Act, 1976, but does not include any such person—
45 of 1950. (i) who is subject to the Air Force Act, 1950, or the Army Act, 1950, or the
46 of 1950. Navy Act, 1957; or
62 of 1957. (ii) who is employed in the police service or as an officer or other employee
of a prison; or
20 (iii) who is employed mainly in a supervisory or managerial or administrative
capacity.
3. (1) There shall be no discrimination among employees on the ground of gender in Prohibition of
matters relating to wages by the same employer, in respect of the same work or work of similar discrimination
on ground of
nature done by any employee. gender.
25 (2) No employer shall, for the purpose of complying with the provisions of
sub-section (1), reduce the rate of wages of any employee.
4. Where there is any dispute as to whether a work is of same or similar nature for the Determination
purpose of section 3, the dispute shall be decided by such authority as may be notified by of disputes
with regard to
the appropriate Government. same or
similar nature
30 CHAPTER II of work.
MINIMUM WAGES
5. No employer shall pay to any employee wages less than the minimum rate of wages Payment of
notified by the appropriate Government for the area, establishment or work as may be specified minimum rate
of wages.
in the notification.
35 6. (1) Subject to the provisions of section 9, the appropriate Government shall fix the Fixation of
minimum rate of wages payable to employees. minimum
wages.
(2) For the purposes of sub-section (1), the appropriate Government shall fix—
(a) a minimum rate of wages for time work; or
(b) a minimum rate of wages for piece work; or
40 (c) a minimum rate of wages to apply in the case of employees employed on piece
work for the purpose of securing to such employees a minimum rate of wages on a time
work basis.
(3) The minimum rate of wages on time work basis may be fixed in accordance with any
one or more of the following wage periods, namely:––
45 (i) by the hour, or
(ii) by the day, or
(iii) by the month.
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6
(4) Where the rates of wages are fixed by the hour or by the day or by the month, the
manner of calculating the wages shall be such, as may be prescribed.
(5) The appropriate Government may, by notification, fix factors by which the minimum
wages so fixed be multiplied for different types of work.
(6) For the purpose of fixation of factors referred to in sub-section (5), the appropriate 5
Government shall take into account the skill required, the arduousness of the work assigned
to the worker, geographical location of the place of work and other factors which the
appropriate Government considers necessary.
Components 7. (1) Any minimum rate of wages fixed or revised by the appropriate Government, in
of minimum respect of employment, under section 8 may consist of–– 10
wages.
(i) a basic rate of wages and a special allowance at a rate to be adjusted, at such
intervals and in such manner as the appropriate Government may direct, to accord as
nearly as practicable with the variation in the cost of living index number applicable to
such workers (hereinafter referred to as “cost of living allowance”); or
(ii) a basic rate of wages with or without the cost of living allowance, and the 15
cash value of the concessions in respect of supplies of essential commodities at
concession rates, where so authorised; or
(iii) an all-inclusive rate allowing for the basic rate, the cost of living allowance
and the cash value of the concessions, if any.
(2) The cost of living allowance and the cash value of the concessions in respect of 20
supplies of essential commodities at concession rate shall be computed by such authority,
as the appropriate Government may by notification, appoint, at such intervals and in
accordance with such directions as may be specified or given by the appropriate Government
from time to time.
Procedure for 8. (1) In fixing minimum rates of wages in respect of any employment for the first time 25
fixing and under this Code or in revising minimum rates of wages so fixed, the appropriate Government
revising
minimum
shall either—
wages. (a) appoint as many committees and sub-committees as it considers necessary
to hold enquiries and recommend in respect of such fixation or revision, as the case
may be; or 30
(b) by notification publish its proposals for the information of persons likely to
be affected thereby and specify a date not less than two months from the date of the
notification on which the proposals shall be taken into consideration.
(2) Every committee and sub-committee appointed by the appropriate Government
under clause (a) of sub-section (1) shall consist of persons–– 35
(a) representing employers;

(b) representing employees which shall be equal in number of the members
specified in clause (a); and
(c) independent persons, not exceeding one-third of the total members of the
committee or sub-committee, as the case may be. 40
(3) After considering the recommendation of the committee or sub- committee appointed
under clause (a) of sub-section (1) or, as the case may be, all representations received by it
before the date specified in the notification under clause (b) of that sub-section, the appropriate
Government shall by notification fix, or as the case may be, revise the minimum rates of
wages and unless such notification otherwise provides, it shall come into force on the expiry 45
of three months from the date of its issue:
Provided that where the appropriate Government proposes to revise the minimum
rates of wages by the mode specified in clause (b) of sub-section (1), the appropriate
Government shall also consult concerned Advisory Board constituted under section 42.
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7
(4) The appropriate Government shall review or revise minimum rates of wages at an
interval of five years.
9. (1) The Central Government may, by notification, fix the national minimum wage:— Power of
Central
Provided that different national minimum wage may be fixed for different States or Government
5 different geographical areas. to fix
national
(2) The minimum rates of wages fixed by the appropriate Government under section 6 minimum
shall not be less than the national minimum wage and if the minimum rates of wages fixed by wage.
the appropriate Government earlier is more than the national minimum wage, then, the
appropriate Government shall not reduce such minimum rates of wages fixed by it earlier.
10 (3) The Central Government, before fixing the national minimum wage under
sub-section (1), may obtain the advice of the Central Advisory Board constituted under
sub-section (1) of section 42.
10. If an employee whose minimum rate of wages has been fixed under this Code by the Wages of
day works on any day on which he was employed for a period of less than the requisite employee
who works
15 number of hours constituting a normal working day, he shall, save as otherwise hereinafter for less than
provided, be entitled to receive wages in respect of work done on that day, as if he had normal
worked for a full normal working day: working day.
Provided that he shall not be entitled to receive wages for a full normal working day,—
(i) in any case where his failure to work is caused by his unwillingness to work
20 and not by the omission of the employer to provide him with work; and
(ii) in such other cases and circumstances, as may be prescribed.
11. Where an employee does two or more classes of work to each of which a different Wages for
minimum rate of wages is applicable, the employer shall pay to such employee in respect of two or more
classes of
the time respectively occupied in each such class of work, wages at not less than the
work.
25 minimum rate in force in respect of each such class.
12. Where a person is employed on piece work for which minimum time rate and not a Minimum
minimum piece rate has been fixed under this Code, the employer shall pay to such person time rate
wages for
wages at not less than the minimum time rate. piece work.
13. (1) Where the minimum rates of wages have been fixed under this Code, the Fixing hours
30 appropriate Government may— of work for
normal
(a) fix the number of hours of work which shall constitute a normal working day working day.
inclusive of one or more specified intervals;
(b) provide for a day of rest in every period of seven days which shall be allowed
to all employees or to any specified class of employees and for the payment of
35 remuneration in respect of such days of rest;
(c) provide for payment for work on a day of rest at a rate not less than the
overtime rate.
(2) The provisions of sub-section (1) shall, in relation to the following classes of
employees apply, only to such extent and subject to such conditions as may be prescribed,
40 namely:—
(a) employees engaged on urgent work or in any emergency which could not
have been foreseen or prevented;
(b) employees engaged in work of the nature of preparatory or complementary
work which must necessarily be carried on outside the limits laid down for the general
45 working in the employment concerned;
(c) employees whose employment is essentially intermittent;
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8
(d) employees engaged in any work which for technical reasons has to be
completed before the duty is over; and
(e) employees engaged in a work which could not be carried on except at times
dependent on the irregular action of natural forces.
(3) For the purposes of clause (c) of sub-section (2), employment of an employee is 5
essentially intermittent when it is declared to be so by the appropriate Government on the
ground that the daily hours of duty of the employee, or if there be no daily hours of duty as
such for the employee, the hours of duty normally include periods of in action during which
the employee may be on duty but is not called upon to display either physical activity or
sustained attention. 10
Wages for 14. Where an employee whose minimum rate of wages has been fixed under this Code
overtime by the hour, by the day or by such a longer wage period as may be prescribed, works on any
work.
day in excess of the number of hours constituting a normal working day, the employer shall
pay him for every hour or for part of an hour so worked in excess, at the overtime rate which
shall not be less than twice the normal rate of wages. 15
CHAPTER III
PAYMENT OF WAGES
Mode of 15. All wages shall be paid in current coin or currency notes or by cheque or through
payment of digital or electronic mode or by crediting the wages in the bank account of the employee:
wages.
Provided that the appropriate Government may, by notification, specify the industrial 20
or other establishment, the employer of which shall pay to every person employed in such
industrial or other establishment, the wages only by cheque or through digital or electronic
mode or by crediting the wages in his bank account.
Fixation of 16. The employer shall fix the wage period for employees either as daily or weekly or
wage period. fortnightly or monthly subject to the condition that no wage period in respect of any employee 25
shall be more than a month:
Provided that different wage periods may be fixed for different establishments.
Time limit for 17. (1) The employer shall pay or cause to be paid wages to the employees, engaged
payment of on—
wages.
(i) daily basis, at the end of the shift; 30
(ii) weekly basis, on the last working day of the week, that is to say, before the
weekly holiday;
(iii) fortnightly basis, before the end of the second day after the end of the
fortnight;
(iv) monthly basis, before the expiry of the seventh day of the succeeding 35
month.
(2) Where an employee has been—
(i) removed or dismissed from service; or
(ii) retrenched or has resigned from service, or became unemployed due to
closure of the establishment, 40
the wages payable to him shall be paid within two working days of his removal, dismissal,
retrenchment or, as the case may be, his resignation.
(3) Notwithstanding anything contained in sub-section (1) or sub-section (2), the
appropriate Government may, provide any other time limit for payment of wages where it
considers reasonable having regard to the circumstances under which the wages are to be 45
paid.
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9
(4) Nothing contained in sub-section (1) or sub-section (2) shall affect any time limit
for payment of wages provided in any other law for the time being in force.
18. (1) Notwithstanding anything contained in any other law for the time being in Deductions
force, there shall be no deductions from the wages of the employee, except those as are which may be
made from
5 authorised under this Code. wages.
Explanation.––For the purposes of this sub-section,—
(a) any payment made by an employee to the employer or his agent shall be
deemed to be a deduction from his wages;
(b) any loss of wages to an employee, for a good and sufficient cause, resulting
10 from—
(i) the withholding of increment or promotion, including the stoppage of
an increment; or
(ii) the reduction to a lower post or time-scale; or
(iii) the suspension,
15 shall not be deemed to be a deduction from wages in a case where the provisions made
by the employer for such purposes are satisfying the requirements specified in the
notification issued by the appropriate Government in this behalf.
(2) Deductions from the wages of an employee shall be made in accordance with the
provisions of this Code, and may be only for the following purposes, namely:—
20 (a) fines imposed on him;
(b) deductions for his absence from duty;
(c) deductions for damage to or loss of goods expressly entrusted to the employee
for custody; or for loss of money for which he is required to account, where such
damage or loss is directly attributable to his neglect or default;
25 (d) deductions for house-accommodation supplied by the employer or by the
appropriate Government or any housing board set-up under any law for the time being
in force, whether the Government or such board is the employer or not, or any other
authority engaged in the business of subsidising house-accommodation which may
be specified in this behalf by the appropriate Government by notification;
30 (e) deductions for such amenities and services supplied by the employer as the
appropriate Government or any officer specified by it in this behalf may, by general or
special order, authorise and such deduction shall not exceed an amount equivalent to
the value of such amenities and services.
Explanation.––For the purposes of this clause, the expression “services” does
35 not include the supply of tools and raw materials required for the purposes of
employment;
(f) deductions for recovery of—
(i) advances of whatever nature (including advances for travelling
allowance or conveyance allowance), and the interest due in respect thereof, or
40 for adjustment of overpayment of wages;
(ii) loans made from any fund constituted for the welfare of labour, as may
be prescribed by the appropriate Government, and the interest due in respect
thereof;
(g) deductions for recovery of loans granted for house-building or other purposes
45 approved by the appropriate Government and the interest due in respect thereof;
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10
(h) deductions of income-tax or any other tax levied by the Central Government
or the State Government and payable by the employee or deductions required to be
made by order of a court or other authority competent to make such order;
(i) deductions for subscription to, and for repayment of advances from any
social security fund or scheme constituted by law including provident fund or pension 5
fund or health insurance scheme or fund known by any other name;
(j) deductions for payment of co-operative society subject to such conditions as
the appropriate Government may impose;
(k) deductions made, with the written authorisation of the employee, for payment
of the fees and contribution payable by him for the membership of any Trade Union 10
registered under the Trade Unions Act, 1926; 16 of 1926.
(l) deductions for recovery of losses sustained by an employer on account of

acceptance by the employee of counterfeit or base coins or mutilated or forged currency
notes;
(m) deductions for recovery of losses sustained by an employer on account of 15
the failure of the employee to invoice, to bill, to collect or to account for the appropriate
charges due to the employer whether in respect of fares, freight, demurrage, wharfage
and cranage or in respect of sale of food in catering establishments or in respect of
commodities in grain shops or otherwise;
(n) deductions for recovery of losses sustained by an employer on account of 20
any rebates or refunds incorrectly granted by the employee where such loss is directly
attributable to his neglect or default;
(o) deductions, made with the written authorisation of the employee, for
contribution to the Prime Minister’s National Relief Fund or to such other fund as the
Central Government may, by notification, specify. 25
(3) Notwithstanding anything contained in this Code and subject to the provisions of
any other law for the time being in force, the total amount of deductions which may be made
under sub-section (2) in any wage period from the wages of an employee shall not exceed
fifty per cent. of such wages.
(4) Where the total deductions authorised under sub-section (2) exceed fifty per cent. 30
of the wages, the excess may be recovered in such manner, as may be prescribed.
Fines. 19. (1) No fine shall be imposed on any employee save in respect of such acts and
omissions on his part as the employer, with the previous approval of the appropriate
Government or of such authority as may be prescribed, may have specified by notice under
sub-section (2). 35
(2) A notice specifying such acts and omissions shall be exhibited in such manner as
may be prescribed, on the premises in which the employment is carried on.
(3) No fine shall be imposed on any employee until such employee has been given an
opportunity of showing cause against the fine or otherwise than in accordance with such
procedure as may be prescribed for the imposition of fines. 40
(4) The total amount of fine which may be imposed in any one wage period on any
employee shall not exceed an amount equal to three per cent. of the wages payable to him in
respect of that wage period.
(5) No fine shall be imposed on any employee who is under the age of fifteen years.
(6) No fine imposed on any employee shall be recovered from him by instalments or 45
after the expiry of ninety days from the day on which it was imposed.
(7) Every fine shall be deemed to have been imposed on the day of the act or omission
in respect of which it was imposed.
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11
(8) All fines and all realisations thereof shall be recorded in a register to be kept in such
manner and form as may be prescribed; and all such realisations shall be applied only to such
purposes beneficial to the persons employed in the establishment as are approved by the
prescribed authority.
5 20. (1) Deductions may be made under clause (b) of sub-section (2) of section 18 only Deductions for
on account of the absence of an employee from the place or places where by the terms of his absence from
duty.
employment, he is required to work, such absence being for the whole or any part of the
period during which he is so required to work.
(2) The amount of such deduction shall in no case bear to the wages payable to the
10 employed person in respect of the wage period for which the deduction is made in a larger
proportion than the period for which he was absent bears to the total period within such
wage period during which by the terms of his employment he was required to work:
Provided that, subject to any rules made in this behalf by the appropriate Government,
if ten or more employed persons acting in concert absent themselves without due notice
15 (that is to say without giving the notice which is required under the terms of their contracts
of employment) and without reasonable cause, such deduction from any such person may
include such amount not exceeding his wages for eight days as may by any such terms be
due to the employer in lieu of due notice.
Explanation.––For the purposes of this section, an employee shall be deemed to be
20 absent from the place where he is required to work if, although present in such place, he
refuses, in pursuance of a stay-in strike or for any other cause which is not reasonable in the
circumstances, to carry out his work.
21. (1) A deduction under clause (c) or clause (n) of sub-section (2) of section 18 for Deductions for
damage or loss shall not exceed the amount of the damage or loss caused to the employer by damage or
loss.
25 negligence or default of the employee.
(2) A deduction shall not be made under sub-section (1) until the employee has been
given an opportunity of showing cause against the deduction or otherwise than in accordance
with such procedure as may be prescribed for the making of such deductions.
(3) All such deductions and all realisations thereof shall be recorded in a register to be
30 kept in such form as may be prescribed.
22. A deduction under clause (d) or clause (e) of sub-section (2) of section 18 shall not Deductions
be made from the wages of an employee, unless the house-accommodation amenity or for services
rendered.
service has been accepted by him as a term of employment or otherwise and such deduction
shall not exceed an amount equivalent to the value of the house-accommodation amenity or
35 service supplied and shall be subject to such conditions as the appropriate Government may
impose.
23. Deductions under clause (f) of sub-section (2) of section 18 for recovery of advances Deductions
given to an employee shall be subject to the following conditions, namely:— for recovery
of advances.
(a) recovery of advance of money given to an employee before the employment
40 began shall be made from the first payment of wages to him in respect of a complete
wage period but no recovery shall be made of such advances given for travelling
expenses;
(b) recovery of advance of money given to an employee after the employment
began shall be subject to such conditions as may be prescribed;
45 (c) recovery of advances of wages to an employee not already earned shall be
subject to such conditions as may be prescribed.
24. Deductions under clause (g) of sub-section (2) of section 18 for recovery of loans Deductions
granted to an employee, regulating the extent to which such loans may be granted and the for recovery
of loans.
rate of interest payable thereon, shall be such as may be prescribed.
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12
Chapter not 25. The provisions of this Chapter shall not apply to the Government establishments
to apply to unless the appropriate Government, by notification, applies such provisions to the Government
Government
establishments. establishments specified in the said notification.
CHAPTER IV
PAYMENT OF BONUS 5
Eligibility for 26. (1) There shall be paid to every employee, drawing wages not exceeding such
bonus, etc. amount per mensem as determined by notification by the appropriate Government, by his
employer, who has put in at least thirty days work in an accounting year, an annual minimum
bonus calculated at the rate of eight and one third per cent. of the wages earned by the
employee or one hundred rupees, whichever is higher whether or not the employer has any 10
allocable surplus during the previous accounting year.
(2) For the purpose of calculation of the bonus where the wages of the employee
exceeds such amount per mensem, as determined by notification, by the appropriate
Government, the bonus payable to such employee under sub-sections (1) and (3) shall be
calculated as if his wage were such amount, so determined by the appropriate Government or 15
the minimum wage fixed by the appropriate Government, whichever is higher.
(3) Where in respect of any accounting year referred to in sub-section (1), the allocable
surplus exceeds the amount of minimum bonus payable to the employees under that sub-
section, the employer shall, in lieu of such minimum bonus, be bound to pay to every
employee in respect of that accounting year, bonus which shall be an amount in proportion 20
to the wages earned by the employee during the accounting year, subject to a maximum of
twenty per cent. of such wages.
(4) In computing the allocable surplus under this section, the amount set on or the
amount set off under the provisions of section 36 shall be taken into account in accordance
with the provisions of that section. 25
(5) Any demand for bonus in excess of the bonus referred to in sub-section (1), either
on the basis of production or productivity in an accounting year for which the bonus is
payable shall be determined by an agreement or settlement between the employer and the
employees, subject to the condition that the total bonus including the annual minimum
bonus referred to in sub-section (1) shall not exceed twenty per cent. of the wages earned by 30
the employee in the accounting year.
(6) In the first five accounting years following the accounting year in which the employer
sells the goods produced or manufactured by him or renders services, as the case may be,
from such establishment, bonus shall be payable only in respect of the accounting year in
which the employer derives profit from such establishment and such bonus shall be calculated 35
in accordance with the provisions of this Code in relation to that year, but without applying
the provisions of section 36.
(7) For the sixth and seventh accounting years following the accounting year in which
the employer sells the goods produced or manufactured by him or renders services, as the
case may be, from such establishment, the provisions of section 36 shall apply subject to the 40
following modifications, namely:—
(i) for the sixth accounting year set on or set off, as the case may be, shall be
made in the manner illustrated in the First Schedule taking into account the excess or
deficiency, if any, as the case may be, of the allocable surplus set on or set off in
respect of the fifth and sixth accounting years; 45
(ii) for the seventh accounting year set on or set off, as the case may be, shall be
made in the manner illustrated in the First Schedule taking into account the excess or
deficiency, if any, as the case may be, of the allocable surplus set on or set off in
respect of the fifth, sixth and seventh accounting years.
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13
(8) From the eighth accounting year following the accounting year in which the employer
sells the goods produced or manufactured by him or renders services, as the case may be,
from such establishment, the provisions of section 36 shall apply in relation to such
establishment as they apply in relation to any other establishment.
5 Explanation 1.—For the purpose of sub-section (6), an employer shall not be deemed
to have derived profit in any accounting year, unless—
(a) he has made provision for depreciation of that year to which he is entitled
under the Income-tax Act or, as the case may be, under the agricultural income tax law;
and
10 (b) the arrears of such depreciation and losses incurred by him in respect of the
establishment for the previous accounting years have been fully set off against his
profits.
Explanation 2.—For the purposes of sub-sections (6), (7) and (8), sale of the goods
produced or manufactured during the course of the trial running of any factory or of the
15 prospecting stage of any mine or an oil-field shall not be taken into consideration and where
any question arises with regard to such production or manufacture, the appropriate
Government may, after giving the parties a reasonable opportunity of representing the case,
decide upon the issue.
(9) The provisions of sub-sections (6), (7) and (8) shall, so far as may be, apply to new
20 departments or undertakings or branches set-up by existing establishments.
27. Where an employee has not worked for all the working days in an accounting year, Proportionate
the minimum bonus under sub-section (1) of section 26, if such bonus is higher than eight reduction in
bonus in
and one third per cent. of the salary or wage of the days such employee has worked in that certain cases.
accounting year, shall be proportionately reduced.
25 28. For the purposes of section 27, an employee shall be deemed to have worked in an Computation
establishment in any accounting year also on the days on which,— of number of
working days.
(a) he has been laid off under an agreement or as permitted by standing orders
20 of 1946. under the Industrial Employment (Standing Orders) Act, 1946, or under the Industrial
14 of 1947. Disputes Act, 1947, or under any other law applicable to the establishment;
30 (b) he has been on leave with salary or wages;
(c) he has been absent due to temporary disablement caused by accident arising
out of and in the course of his employment; and
(d) the employee has been on maternity leave with salary or wages, during the
accounting year.
35 29. Notwithstanding anything contained in this Code, an employee shall be disqualified Disqualification
from receiving bonus under this Code, if he is dismissed from service for— for bonus.
(a) fraud; or
(b) riotous or violent behaviour while on the premises of the establishment; or
(c) theft, misappropriation or sabotage of any property of the establishment; or
40 (d) conviction for sexual harassment.
30. Where an establishment consists of different departments or undertakings or has Establishments
branches, whether situated in the same place or in different places, all such departments or to include
departments,
undertakings or branches shall be treated as parts of the same establishment for the purpose
undertakings
of computation of bonus under this Code: and branches.
45 Provided that where for any accounting year a separate balance-sheet and profit and
loss account are prepared and maintained in respect of any such department or undertaking
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14
or branch, then, such department or undertaking or branch shall be treated as a separate

establishment for the purpose of computation of bonus, under this Code for that year, unless
such department or undertaking or branch was, immediately before the commencement of
that accounting year treated as part of the establishment for the purpose of computation of
bonus. 5
Payment of 31. (1) The bonus shall be paid out of the allocable surplus which shall be an amount
bonus out of equal to sixty per cent. in case of a banking company and sixty-seven per cent. in case of
allocable
surplus.
other establishment, of the available surplus and the available surplus shall be the amount
calculated in accordance with section 33.
(2) Audited accounts of companies shall not normally be questioned. 10
(3) Where there is any dispute regarding the quantum of bonus, the authority notified
by the appropriate Government having jurisdiction may call upon the employer to produce
the balance-sheet before it, but the authority shall not disclose any information contained in
the balance-sheet unless agreed to by the employer.
Computation 32. The gross profits derived by an employer from an establishment in respect of the 15
of gross accounting year shall,—
profits.
(a) in the case of a banking company, be calculated in the manner specified in
the Second Schedule;
(b) in any other case, be calculated in the manner specified in the Third Schedule.
Computation 33. The available surplus in respect of any accounting year shall be the gross profits 20
of available for that year after deducting therefrom the sums referred to in section 34:
surplus.
Provided that the available surplus in respect of the accounting year commencing on
any day in a year after the commencement of this Code and in respect of every subsequent
accounting year shall be the aggregate of—
(a) the gross profits for that accounting year after deducting therefrom the sums 25
referred to in section 34; and
(b) an amount equal to the difference between—
(i) the direct tax, calculated in accordance with the provisions of section 35,
in respect of an amount equal to the gross profits of the employer for the
immediately preceding accounting year; and 30
(ii) the direct tax, calculated in accordance with provisions of section 35,
in respect of an amount equal to the gross profits of the employer for such
preceding accounting year after deducting there from the amount of bonus
which the employer has paid or is liable to pay to his employees in accordance
with the provisions of this Code for that year. 35
Sums 34. The following sums shall be deducted from the gross profits as prior charges,
deductible namely:—
from gross
profits. (a) any amount by way of depreciation admissible in accordance with the
provisions of sub-section (1) of section 32 of the Income-tax Act or in accordance with
the provisions of the agricultural income tax law, for the time being in force, as the case 40
may be:
Provided that where an employer has been paying bonus to his employees
under a settlement or an award or agreement made before the 29th May, 1965, and
subsisting on that date after deducting from the gross profits notional normal
depreciation, then, the amount of depreciation to be deducted under this clause shall, 45
at the option of such employer, which is to be exercised once and within one year from
that date, continue to be such notional normal depreciation;
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15
(b) any amount by way of development rebate or investment allowance or

development allowance which the employer is entitled to deduct from his income
under the Income-tax Act;
(c) subject to the provisions of section 35, any direct tax which the employer is
5 liable to pay for the accounting year in respect of his income, profits and gains during
that year;
(d) such further sums as are specified in respect of the employer in the Fourth
Schedule.
35. Any direct tax payable by the employer for any accounting year shall, subject to Calculation of
10 the following provisions, be calculated at the rates applicable to the income of the employer direct tax
payable by
for that year, namely:— employer.
(a) in calculating such tax no account shall be taken of,—
(i) any loss incurred by the employer in respect of any previous accounting
year and carried forward under any law for the time being in force relating to
15 direct taxes;
(ii) any arrears of depreciation which the employer is entitled to add to the
amount of the allowance for depreciation for any succeeding accounting year or
years under sub-section (2) of section 32 of the Income-tax Act;
(iii) any exemption conferred on the employer under section 84 of the
20 Income-tax Act or of any deduction to which he is entitled under sub-section (1)
of section 101 of that Act, as in force immediately before the commencement of
10 of 1965. the Finance Act, 1965;
(b) where the employer is a religious or a charitable institution to which the
provisions of section 41 do not apply and the whole or any part of its income is exempt
25 from the tax under the Income-tax Act, then, with respect to the income so exempted,
such institution shall be treated as if it were a company in which the public are
substantially interested within the meaning of that Act;
(c) where the employer is an individual or a Hindu undivided family, the tax
payable by such employer under the Income-tax Act shall be calculated on the basis
30 that the income derived by him from the establishment is his only income;
(d) where the income of any employer includes any profits and gains derived
from the export of any goods or merchandise out of India and any rebate on such
income is allowed under any law for the time being in force relating to direct taxes, then,
no account shall be taken of such rebate;
35 (e) no account shall be taken of any rebate other than development rebate or
investment allowance or development allowance or credit or relief or deduction (not
hereinbefore mentioned in this section) in the payment of any direct tax allowed under
any law for the time being in force relating to direct taxes or under the relevant annual
Finance Act, for the development of any industry.
40 36. (1) Where for any accounting year, the allocable surplus exceeds the amount of Set on and set
maximum bonus payable to the employees in the establishment under section 26, then, the off of
allocable
excess shall, subject to a limit of twenty per cent. of the total salary or wage of the employees surplus.
employed in the establishment in that accounting year, be carried forward for being set on in
the succeeding accounting year and so on up to and inclusive of the fourth accounting year
45 to be utilised for the purpose of payment of bonus in the manner illustrated in the First
Schedule.
(2) Where for any accounting year, there is no available surplus or the allocable
surplus in respect of that year falls short of the amount of minimum bonus payable to the
employees in the establishment under section 26, and there is no amount or sufficient amount
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16
carried forward and set on under sub-section (1) which could be utilised for the purpose of
payment of the minimum bonus, then, such minimum amount or the deficiency, as the case
may be, shall be carried forward for being set off in the succeeding accounting year and so
on up to and inclusive of the fourth accounting year in the manner illustrated in the First
Schedule. 5
(3) The principle of set on and set off as illustrated in the First Schedule shall apply to
all other cases not covered by sub-section (1) or sub-section (2) for the purpose of payment
of bonus under this Code.
(4) Where in any accounting year any amount has been carried forward and set on or
set off under this section, then, in calculating bonus for the succeeding accounting year, the 10
amount of set on or set off carried forward from the earliest accounting year shall first be
taken into account.
Adjustment of 37. Where in any accounting year,—
customary or
interim bonus (a) an employer has paid any puja bonus or other customary bonus to employee; or
against bonus
payable under (b) an employer has paid a part of the bonus payable under this Code to an 15
this Code. employee before the date on which such bonus becomes payable,
then, the employer shall be entitled to deduct the amount of bonus so paid from the amount
of bonus payable by him to the employee under this Code in respect of that accounting year
and the employee shall be entitled to receive only the balance.
Deduction of 38. Where in any accounting year, an employee is found guilty of misconduct causing 20
certain financial loss to the employer, then, it shall be lawful for the employer to deduct the amount
amounts from
of loss from the amount of bonus payable by him to the employee under this Code in
bonus
payable. respect of that accounting year only and the employee shall be entitled to receive the
balance, if any.
Time limit 39. (1) All amounts payable to an employee by way of bonus under this Code shall be 25
for payment paid by crediting it in the bank account of the employee by his employer within a period of
of bonus.
eight months from the close of the accounting year:
Provided that the appropriate Government or such authority as the appropriate
Government may specify in this behalf may, upon an application made to it by the employer
and for sufficient reasons, by order, extend the said period of eight months to such further 30
period or periods as it thinks fit; so, however, that the total period so extended shall not in
any case exceed two years.
(2) Notwithstanding anything contained in sub-section (1), where there is a dispute
regarding payment of bonus pending before any authority, such bonus shall be paid, within
a period of one month from the date on which the award becomes enforceable or the settlement 35
comes into operation, in respect of such dispute:
Provided that if, there is a dispute for payment at the higher rate, the employer shall
pay eight and one third per cent. of the wages earned by the employee as per the provisions
of this Code within a period of eight months from the close of the accounting year.
Application 40. (1) If in any accounting year an establishment in public sector sells any goods 40
of this produced or manufactured by it or renders any services, in competition with an establishment
Chapter to
in private sector, and the income from such sale or services or both, is not less than twenty
establishments
in public per cent. of the gross income of the establishment in public sector for that year, then, the
sector in provisions of this Chapter shall apply in relation to such establishment in public sector as
certain cases. they apply in relation to a like establishment in private sector. 45
(2) Save as otherwise provided in sub-section (1), nothing in this Chapter shall apply
to the employees employed by any establishment in public sector.
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17
41. (1) Nothing in this Chapter shall apply to— Non-

applicability
(a) employees employed by the Life Insurance Corporation of India; of this
Chapter.
(b) seamen as defined in clause (42) of section 3 of the Merchant Shipping
44 of 1958. Act, 1958;
5 (c) employees registered or listed under any scheme made under the Dock
9 of 1948. Workers (Regulation of Employment) Act, 1948, and employed by registered or listed
employers;
(d) employees employed by an establishment under the authority of any
department of the Central Government or a State Government or a local authority;
10 (e) employees employed by—
(i) the Indian Red Cross Society or any other institution of a like nature
including its branches;
(ii) universities and other educational institutions;
(iii) institutions including hospitals, chamber of commerce and social
15 welfare institutions established not for purposes of profit;
(f) employees employed by the Reserve Bank of India;
(g) employees employed by public sector financial institution other than a banking
company, which the Central Government may, by notification, specify, having regard
to—
20 (i) its capital structure;
(ii) its objectives and the nature of its activities;
(iii) the nature and extent of financial assistance or any concession given
to it by the Government; and
(iv) any other relevant factor;
25 (h) employees employed by inland water transport establishments operating on
routes passing through any other country; and
(i) employees of any other establishment which the appropriate Government
may, by notification, exempt having regard to the overall benefits under any other
scheme of profit sharing available in such establishments to the employees.
30 (2) Subject to the provisions of sub-section (1) and notwithstanding anything
contained in any other provisions of this Chapter, the provisions of this Chapter shall apply
to such establishment in which twenty or more persons are employed or were employed on
any day during an accounting year.
CHAPTER V
35 ADVISORY BOARD
42. (1) The Central Government shall constitute the Central Advisory Board which Central
shall consist of persons to be nominated by the Central Government— Advisory
Board and
(a) representing employers; State
Advisory
(b) representing employees which shall be equal in number of the members Boards.
40 specified in clause (a); and
Board.
<< 150 >>

18
(2) One-third of the members referred to in sub-section (1) shall be women and a
member specified in clause (c) of the said sub-section shall be appointed by the Central
Government as the Chairperson of the Board.
(3) The Central Advisory Board constituted under sub-section (1) shall from time to
time advise the Central Government on reference of issues relating to— 5
(a) fixation or revision of minimum wages and other connected matters;

(b) providing increasing employment opportunities for women;
(c) the extent to which women may be employed in such establishments or
employments as the Central Government may, by notification, specify in this behalf;
and 10
(d) any other matter relating to this Code,

and on such advice the Central Government may issue directions to the State Government as
it deems fit in respect of matters relating to issues referred to the Board.
(4) Every State Government shall constitute a State Advisory Board for advising the
State Government— 15
(a) in fixation or revision of minimum wages and other connected matters;

(b) for the purpose of providing increasing employment opportunities for women;
(c) with regard to the extent to which women may be employed in such
establishments or employments as the State Government may, by notification, specify
in this behalf; and 20
(d) in any other matter relating to this Code, which the State Government may
refer from time to time to the Board.
(5) The State Advisory Board may constitute one or more committees or sub-committees
to look into issues pertaining to matters specified in clauses (a) to (d) of sub-section (4).
(6) The State Advisory Board and each of the committees and sub-committees thereof 25
shall consist of persons—
(c) independent persons, not exceeding one-third of the total members of the 30
Board or committee or sub-committee, as the case may be.
(7) One-third of the members referred to in sub-section (6) shall be women and one
among the members specified in clause (c) of the said sub-section shall—
(a) be appointed by the State Government as the Chairperson of the Board;
(b) be appointed by the State Advisory Board as the Chairperson of the 35
committee or sub-committee, as the case may be.
(8) In tendering its advice in the matters specified in clause (b) or clause (c) of sub-
section (4), the State Advisory Board shall have regard to the number of women employed in
the concerned establishment, or employment, the nature of work, hours of work, suitability
of women for employment, as the case may be, the need for providing increasing employment 40
opportunities for women, including part time employment, and such other relevant factors as
the Board may think fit.
(9) The State Government may, after considering the advice tendered to it by the State
Advisory Board and after inviting and considering the representations from establishment
or employees or any other person which that Government thinks fit, issue such direction as 45
may be deemed necessary.
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19
(10) The Central Advisory Board referred to in sub-section (1) and the State Advisory
Board referred to in sub-section (4) shall respectively regulate their own procedure including
that of the committees and sub-committees constituted by the State Advisory Board, in such
manner as may be prescribed.
5 (11) The terms of office of the Central Advisory Board referred to in sub-section (1)
and the State Advisory Board referred to in sub-section (4) including that of the committees
and sub-committees constituted by the State Advisory Board, shall be such as may be
prescribed.
CHAPTER VI
10 PAYMENT OF DUES, CLAIMS AND AUDIT
43. Every employer shall pay all amounts required to be paid under this Code to every Responsibility
employee employed by him: for payment
of various
Provided that where such employer fails to make such payment in accordance with this dues.
Code, then, the company or firm or association or any other person who is the proprietor of
15 the establishment, in which the employee is employed, shall be responsible for such payment.
Explanation.—For the purposes of this section the expression "firm" shall have the
9 of 1932. same meaning as assigned to it in the Indian Partnership Act, 1932.
44. (1) Subject to the other provisions of this Code, all amounts payable to an employee Payment of
under this Code shall, if such amounts could not or cannot be paid on account of his death various
before payment or on account of his whereabouts not being known,— undisbursed
20
dues in case of
(a) be paid to the person nominated by him in this behalf in accordance with the death of
employee.
rules made under this Code; or
(b) where no such nomination has been made or where for any reasons such
amounts cannot be paid to the person so nominated, be deposited with such authority,
25 as may be prescribed, who shall deal with the amounts so deposited in the manner as
may be prescribed.
(2) Where in accordance with the provisions of sub-section (1), all amounts payable to
an employee under this Code—
(a) are paid by the employer to the person nominated by the employee; or
30 (b) are deposited by the employer with the authority referred to in clause (b) of
sub-section (1),
then, the employer shall be discharged of his liability to pay those amounts.
45. (1) The appropriate Government may, by notification, appoint one or more Claims under
authorities, not below the rank of a Gazetted officer, to hear and determine the claims which Code and
procedure
35 arises under the provisions of this Code.
thereof.
(2) The authority appointed under sub-section (1), while deciding the claim under that
sub-section, may order, having regard to the circumstances under which the claim arises, the
payment of compensation in addition to the claim determined, which may extend to ten times
of the claim determined and endeavour shall be made by the authority to decide the claim
40 within a period of three months.
(3) If an employer fails to pay the claim determined and compensation ordered to be
paid under sub-section (2), the authority shall issue a certificate of recovery to the Collector
or District Magistrate of the district where the establishment is located who shall recover the
same as arrears of land revenue and remit the same to the authority for payment to the
45 concerned employee.
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20
(4) Any application before the authority for claim referred to in sub-section (1) may be
filed by,—
(a) the employee concerned; or
(b) any Trade Union registered under the Trade Unions Act, 1926 of which the 16 of 1926.
employee is a member; or 5
(c) the Facilitator.

(5) Subject to such rules as may be made, a single application may be filed under this
section on behalf or in respect of any number of employees employed in an establishment.
(6) The application under sub-section (4) may be filed within a period of three years
from the date on which claims referred to in sub-section (1) arises: 10
Provided that the authority referred to in sub-section (1) may, entertain the application
after three years on sufficient cause being shown by the applicant for such delay.
(7) The authority appointed under sub-section (1) and the appellate authority appointed
under sub-section (1) of section 49, shall have all the powers of a civil court under the Code
of Civil Procedure, 1908, for the purpose of taking evidence and of enforcing the attendance 15 5 of 1908.
of witnesses and compelling the production of documents, and every such authority or
appellate authority shall be deemed to be a civil court for all the purposes of section 195 and
Chapter XXVI of the Code of Criminal Procedure, 1973. 2 of 1974.
Reference of 46. Notwithstanding anything contained in this Code, where any dispute arises between
disputes under an employer and his employees with respect to— 20
this Code.
(a) fixation of bonus or eligibility for payment of bonus under the provisions
of this Code; or
(b) the application of this Code, in respect of bonus, to an establishment in
public sector,
then, such dispute shall be deemed to be an industrial dispute within the meaning of the 25
Industrial Disputes Act, 1947. 14 of 1947.
Presumption 47. (1) Where, during the course of proceedings before—

about
accuracy of (a) the authority under section 45; or
balance-sheet
and profit and (b) the appellate authority under section 49; or
loss account
of (c) a Tribunal; or 30
corporations
and
(d) an arbitrator referred to in clause (aa) of section 2 of the Industrial Disputes
Act, 1947, 14 of 1947.
companies.
in respect of any dispute of the nature specified in sections 45 and 46 or in respect of an

appeal under section 49, the balance-sheet and the profit and loss account of an employer,
being a corporation or a company (other than a banking company), duly audited by the 35
Comptroller and Auditor-General of India or by auditors duly qualified to act as auditors of
companies under section 141 of the Companies Act, 2013, are produced before it, then, the 18 of 2013.
said authority, appellate authority, Tribunal or arbitrator, as the case may be, may presume
the statements and particulars contained in such balance-sheet and profit and loss account
to be accurate and it shall not be necessary for the corporation or the company to prove the 40
accuracy of such statements and particulars by the filing of an affidavit or by any other
mode:
Provided that where the said authority, appellate authority, Tribunal or arbitrator, as
the case may be, is satisfied that the statements and particulars contained in the
balance-sheet or the profit and loss account of the corporation or the company are not 45
accurate, it may take such steps as it thinks necessary to find out the accuracy of such
statements and particulars.
<< 153 >>

21
(2) When an application is made to the authority, appellate authority, Tribunal or

arbitrator, as the case may be, referred to in sub-section (1), by any Trade Union being a
party to the dispute or as the case may be, an appeal, and where there is no Trade Union, by
the employees being a party to the dispute, or as the case may be, an appeal, requiring any
5 clarification relating to any item in the balance-sheet or the profit and loss account, then
such authority, appellate authority, Tribunal or arbitrator, may, after satisfying itself that
such clarification is necessary, by order, direct the corporation or, as the case may be, the
company, to furnish to the Trade Union or the employees such clarification within such time
as may be specified in the direction and the corporation or, as the case may be, the company,
10 shall comply with such direction.
48. (1) Where any claim, dispute or appeal with respect to bonus payable under this Audit of
Code between an employer, not being a corporation or a company, and his employees is accounts of
employers,
pending before any authority, appellate authority, Tribunal or arbitrator, as the case may be, not being
as referred to in sub-section (1) of section 47 and the accounts of such employer audited by corporations
15 any auditor duly qualified to act as auditor of companies under the provisions of section 141 or companies.
18 of 2013. of the Companies Act, 2013, are produced before such authority, appellate authority, Tribunal
or arbitrator, then the provisions of section 47 shall, so far as may be, apply to the accounts
so audited.
(2) When the authority, appellate authority, Tribunal or arbitrator, referred to in sub-
20 section (1), as the case may be, finds that the accounts of such employer have not been
audited by any such auditor and it is of opinion that an audit of the accounts of such
employer is necessary for deciding the question referred to it, then, such authority, appellate
authority, Tribunal or arbitrator, may, by order, direct the employer to get his accounts
audited within such time as may be specified in the direction or within such further time as it
25 may allow by such auditor or auditors as it thinks fit and thereupon the employer shall
comply with such direction.
(3) Where an employer fails to get the accounts audited under sub-section (2) the
authority, appellate authority, Tribunal or arbitrator, referred to in sub-section (1), as the case
may be, may, without prejudice to the provisions of section 54, get the accounts audited by
30 such auditor or auditors as it thinks fit.
(4) When the accounts are audited under sub-section (2) or sub-section (3), the
provisions of section 47 shall, so far as may be, apply to the accounts so audited.
(5) The expenses of, and incidental to, any audit under sub-section (3) including the
remuneration of the auditor or auditors shall be determined by the authority, appellate authority,
35 Tribunal or arbitrator, referred to in sub-section (1), as the case may be, and paid by the
employer and in default of such payment shall be recoverable by the authority referred to in
sub-section (3) of section 45 from the employer in the manner provided in that sub-section.
49. (1) Any person aggrieved by an order passed by the authority under sub-section (2) Appeal.
of section 45 may prefer an appeal, to the appellate authority having jurisdiction appointed
40 by the appropriate Government, by notification, for such purpose, within ninety days from
the date of such order, in such form and manner as may be prescribed:
Provided that the appellate authority may entertain the appeal after ninety days if it
satisfied that the delay in filing the appeal has occurred due to sufficient cause.
(2) The appellate authority shall be appointed from the officers of the appropriate
45 Government holding the post at least one rank higher than the authority referred under
(3) The appellate authority shall, after hearing the parties in the appeal, dispose of the
appeal and endeavour shall be made to dispose of the appeal within a period of three months.
(4) The outstanding dues under the orders of the appellate authority shall be recovered
50 by the authority referred to in section 45, by issuing the certificate of recovery in the manner
specified in sub-section (3) of that section.
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22
Records, 50. (1) Every employer of an establishment to which this Code applies shall maintain
returns and a register containing the details with regard to persons employed, muster roll, wages, and
notices.
such other details in such manner as may be prescribed.
(2) Every employer shall display a notice on the notice board at a prominent place of
the establishment containing the abstract of this Code, category-wise wage rates of 5
employees, wage period, day or date and time of payment of wages, and the name and
address of the Facilitator having jurisdiction.
(3) Every employer shall issue wage slips to the employees in such form and manner
as may be prescribed.
(4) The provisions of sub-sections (1) to (3) shall not apply in respect of the employer 10
to the extent he employs not more than five persons for agriculture or domestic purpose:
Provided that such employer, when demanded, shall produce before the Facilitator, the
reasonable proof of the payment of wages to the persons so employed.
Explanation.—For the purposes of this sub-section, the expression "domestic purpose"
means the purpose exclusively relating to the home or family affairs of the employer and does 15
not include any affair relating to any establishment, industry, trade, business, manufacture
or occupation.
CHAPTER VII
FACILITATOR
Appointment 51. (1) The appropriate Government may, by notification, appoint Facilitators who 20
of Facilitators shall exercise the powers conferred on them under sub-section (4) throughout the State or
and their
powers.
such geographical limits assigned to them, in relation to establishments situated in such
State or geographical limits, as the case may be.
(2) The appropriate Government may, by notification, lay down an inspection scheme
which shall also provide for generation of a web-based inspection schedule. 25
(3) Every Facilitator appointed under sub-section (1) shall be deemed to be public
servant within the meaning of section 21 of the Indian Penal Code. 45 of 1860.
(4) The Facilitator may, within the local limits of his jurisdiction—
(a) supply information and advice to employers and workers concerning the
most effective means of complying with the provisions of this Code; 30
(b) inspect the establishment based on inspection scheme referred to in

sub-section (2).
(5) Subject to the provisions of sub-section (4), the Facilitator may,—
(a) examine any person who is found in any premises of the establishment,
whom the Facilitator has reasonable cause to believe, is a worker of the establishment; 35
(b) require any person to give any information, which is in his power to give with
respect to the names and addresses of the persons;
(c) search, seize or take copies of such register, record of wages or notices or
portions thereof as the Facilitator may consider relevant in respect of an offence under
this Code and which the Facilitator has reason to believe has been committed by the 40
employer;
(d) bring to the notice of the appropriate Government defects or abuses not
covered by any law for the time being in force; and
(e) exercise such other powers as may be prescribed.
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23
(6) Any person required to produce any document or to give any information required
by a Facilitator under sub-section (5) shall be deemed to be legally bound to do so within the
45 of 1860. meaning of section 175 and section 176 of the Indian Penal Code.
2 of 1974. (7) The provisions of the Code of Criminal Procedure, 1973 shall, so far as may be,
5 apply to the search or seizure under sub-section (5) as they apply to the search or seizure
made under the authority of a warrant issued under section 94 of the said Code.
CHAPTER VIII
52. (1) No court shall take cognizance of any offence punishable under this Code, Cognizance of
save on a complaint made by or under the authority of the appropriate Government or an offences.
10
officer authorised in this behalf, or by an employee or a registered Trade Union registered
16 of 1926. under the Trade Unions Act, 1926 or a Facilitator.
2 of 1974. (2) Notwithstanding anything contained in the Code of Criminal Procedure, 1973, no
court inferior to that of a Metropolitan Magistrate or Judicial Magistrate of the first class
15 shall try the offences under this Code.
53. (1) Any employer who— Penalties for
offences.
(a) pays to any employee less than the amount due to such employee under the
provisions of this Code shall be punishable with fine which may extend to fifty thousand
rupees;
20 (b) having been convicted of an offence under clause (a) is again found guilty of
similar offence under this clause, within five years from the date of the commission of
the first or subsequent offence, he shall, on the second and the subsequent commission
of the offence, be punishable with imprisonment for a term which may extend to three
months or with fine which may extend to one lakh rupees, or with both;
25 (c) contravenes any other provision of this Code or any rule made or order made
or issued thereunder shall be punishable with fine which may extend to twenty thousand
rupees;
(d) having been convicted of an offence under clause (c) is again found guilty of
similar offence under this clause, within five years from the date of the commission of
30 the first or subsequent offence, he shall, on the second and the subsequent commission
of the offence under this clause, be punishable with imprisonment for a term which
may extend to one month or with fine which may extend to forty thousand rupees, or
with both.
(2) Notwithstanding anything contained in sub-section (1), for the offences of non-
35 maintenance or improper maintenance of records in the establishment, the employer shall be
punishable with fine which may extend to ten thousand rupees.
(3) Notwithstanding anything contained in clause (c) of sub-section (1) or sub-section (2),
the Facilitator shall, before initiation of prosecution proceeding for the offences under the
said clause or sub-section, give an opportunity to the employer to comply with the provisions
40 of this Code by way of a written direction, which shall lay down a time period for such
compliance, and, if the employer complies with the direction within such period, the Facilitator
shall not initiate such prosecution proceeding and, no such opportunity shall be accorded to
an employer, if the violation of the same nature of the provisions under this Code is repeated
within a period of five years from the date on which such first violation was committed and
45 in such case the prosecution shall be initiated in accordance with the provisions of this
Code.
54. (1) If the person committing an offence under this Code is a company, every person Offences by
who, at the time the offence was committed was in charge of, and was responsible to the companies.
company for the conduct of business of the company, as well as the company, shall be
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24
deemed to be guilty of the offence and shall be liable to be proceeded against and punished
accordingly:
Provided that nothing contained in this sub-section shall render any such person
liable to any punishment if he proves that the offence was committed without his knowledge
or that he exercised all due diligence to prevent the commission of such offence. 5
(2) Notwithstanding anything contained in sub-section (1), where an offence under

this Code has been committed by a company and it is proved that the offence has been
committed with the consent or connivance of, or is attributable to any neglect on the part of,
any director, manager, secretary or other officer of the company, such director, manager,
secretary or other officer shall also be deemed to be guilty of that offence and shall be liable 10
to be proceeded against and punished accordingly.
Explanation.—For the purposes of this section,—
(a) "company" means anybody corporate and includes—
(i) a firm; or
(ii) a limited liability partnership registered under the Limited Liability 15
Partnership Act, 2008; or 6 of 2009.
(iii) other association of individuals; and

(b) "director" in relation to a firm means a partner in the firm.
Composition 55. (1) Notwithstanding anything contained in the Code of Criminal Procedure, 1973, 2 of 1974.
of offences. any offence punishable under this Code, not being an offence punishable with imprisonment 20
only, or with imprisonment and also with fine, may, on an application of the accused person,
either before or after the institution of any prosecution, be compounded by a Gazetted
officer, as the appropriate Government may, by notification, specify, for a sum of fifty per
cent. of the maximum fine provided for such offence, in the manner as may be prescribed.
(2) Nothing contained in sub-section (1) shall apply to an offence committed by a 25
person for the second time or thereafter within a period of five years from the date—
(i) of commission of a similar offence which was earlier compounded;
(ii) of commission of similar offence for which such person was earlier convicted.
(3) Every officer referred to in sub-section (1) shall exercise the powers to compound
an offence, subject to the direction, control and supervision of the appropriate Government. 30
(4) Every application for the compounding of an offence shall be made in such manner
(5) Where any offence is compounded before the institution of any prosecution, no
prosecution shall be instituted in relation to such offence, against the offender in relation to
whom the offence is so compounded. 35
(6) Where the composition of any offence is made after the institution of any
prosecution, such composition shall be brought by the officer referred to in sub-section (1)
in writing, to the notice of the Court in which the prosecution is pending and on such notice
of the composition of the offence being given, the person against whom the offence is so
compounded shall be discharged. 40
(7) Any person who fails to comply with an order made by the officer referred to in
sub-section (1), shall be punishable with a sum equivalent to twenty per cent. of the maximum
fine provided for the offence, in addition to such fine.
(8) No offence punishable under the provisions of this Code shall be compounded
except under and in accordance with the provisions of this section. 45
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25
CHAPTER IX
MISCELLANEOUS
56. No court shall entertain any suit for the recovery of minimum wages, any deduction Bar of suits.
from wages, discrimination in wages and payment of bonus, in so far as the sum so claimed—
5 (a) forms the subject of claims under section 45;
(b) has formed the subject of a direction under this Code; or
(c) has been adjudged in any proceeding under this Code;
(d) could have been recovered under this Code.
57. No suit, prosecution or any other legal proceeding shall lie against the appropriate Protection of
10 Government or any officer of that Government for anything which is in good faith done or action taken
in good faith.
intended to be done under this Code.
58. Where a claim has been filed on account of non-payment of remuneration or bonus Burden of
or less payment of wages or bonus or on account of making deductions not authorised by proof.
this Code from the wages of an employee, the burden to prove that the said dues have been
15 paid shall be on the employer.
59. Any contract or agreement whereby an employee relinquishes the right to any Contracting
amount or the right to bonus due to him under this Code shall be null and void in so far as out.
it purports to remove or reduce the liability of any person to pay such amount under this
Code.
20 60. The provisions of this Code shall have effect notwithstanding anything inconsistent Effect of
therewith contained in any other law for the time being in force or in the terms of any award, laws,
agreements,
agreement, settlement or contract of service. etc.
inconsistent
with this
Code.
61. The appropriate Government may, by notification, direct that any power exercisable Delegation of
by it under this Code shall, in relation to such matters and subject to such conditions, if any, powers.
25 as may be specified in the notification, be also exercisable—
(a) where the appropriate Government is the Central Government, by such officer
or authority subordinate to the Central Government or by the State Government or by
such officer or authority subordinate to the State Government, as may be specified in
the notification;
30 (b) where the appropriate Government is a State Government, by such officer or
authority subordinate to the State Government as may be specified in the notification.
62. Where an employer is charged with an offence under this Code, he shall be entitled Exemption of
upon complaint duly made by him, to have any other person whom he charges as the actual employer
from liability
offender, brought before the court at the time appointed for hearing the charge; and if, after in certain
35 the commission of the offence has been proved, the employer proves to the satisfaction of cases.
the court—
(a) that he has used due diligence to enforce the execution of this Code; and
(b) that the said other person committed the offence in question without his
knowledge, consent or connivance,
40 that other person shall be convicted of the offence and shall be liable to the like punishment
as if he were the employer and the employer shall be discharged from any liability under this
Code in respect of such offence:
Provided that in seeking to prove, as aforesaid, the employer may be examined on oath,
and the evidence of the employer or his witness, if any, shall be subject to cross-examination
<< 158 >>

26
by or on behalf of the person whom the employer charges as the actual offender and by the
prosecution.
Protection 63. Any amount deposited with the appropriate Government by an employer to secure
against the due performance of a contract with that Government and any other amount due to such
attachment of
assets of
employer from that Government in respect of such contract shall not be liable to attachment 5
employer under any decree or order of any court in respect of any debt or liability incurred by the
with employer other than any debt or liability incurred by the employer towards any employee
Government. employed in connection with the contract aforesaid.
Power of 64. The Central Government may, for carrying into execution of the provisions of this
Central Code in the State give directions to the State Government, and the State Government shall 10
Government
to give
abide by such directions.
directions.
Savings. 65. Nothing contained in this Code shall be deemed to affect the provisions of the
Mahatma Gandhi National Rural Employment Guarantee Act, 2005 and the Coal Mines 42 of 2005.
Provident Fund and Bonus Schemes Act, 1948, or of any scheme made thereunder. 46 of 1948.
Power of 66. (1) The appropriate Government may, subject to the condition of previous 15
appropriate
publication, make rules for carrying out the provisions of this Code.
Government
to make rules. (2) In particular and without prejudice to the generality of the foregoing power, such
rules may provide for all or any of the following matters, namely:—
(a) the manner of calculating the wages under sub-section (4) of section 6;
(b) the cases and circumstances in which an employee employed for a period of 20
less than the requisite number of hours shall not be entitled to receive wages for a full
normal working day, under section 10;
(c) the extent and conditions, which shall apply in relation to certain classes of
employees under sub-section (2) of section 13;
(d) the longer wage period for fixation of minimum rate of wages as referred in 25
section 14;
(e) the manner of deducting loans made from any fund constituted for the welfare
of labour under sub-clause (ii) of clause (f) of sub-section (2) of section 18;
(f) the manner of recovery of excess of amount under sub-section (4) of
section 18; 30
(g) the authority to provide approval for imposition of fine under sub-section (1)
of section 19;
(h) the manner of exhibition of the acts and omissions to be specified in the
notice under sub-section (2) of section 19;
(i) the procedure for the imposition of fines under sub-section (3) of section 19; 35
(j) the form of the register to record all fines and all realisations thereof under
(k) the procedure for making deductions for absence from duty under
(l) the procedure for making deductions for damage or loss under sub-section (2) 40
of section 21;
(m) the form of the register to record all deductions and all realisations thereof
under sub-section (3) of section 21;
(n) conditions for recovery of advance of money given to an employee after the
employment began under clause (b) of section 23; 45
<< 159 >>

27
(o) conditions for recovery of advances of wages to an employee not already

earned under clause (c) of section 23;
(p) deductions for recovery of loans and the rate of interest payable thereon
under section 24;
5 (q) manner of regulating the procedure by the Central Advisory Board and the
State Advisory Board, including that of the committees and sub-committees constituted
by the State Advisory Board, under sub-section (10) of section 42;
(r) the terms of office of members of the Central Advisory Board, the State
Advisory Board, including that the committees and sub-committees constitutes by
10 the State Advisory Board, under sub-section (11) of section 42;
(s) the authority and manner of depositing with such authority, various
undisbursed dues under clause (b) of sub-section (1) of section 44;
(t) form of single application in respect of a number of employees under sub-
section (5) of section 45;
15 (u) form for making an appeal to the appellate authority under sub-section (1) of
section 49;
(v) the manner of maintenance of a register by the employer under sub-section (1)
of section 50;
(w) the form and manner of issuing wage slips under sub-section (3) of
20 section 50;
(x) the other powers to be exercised by the Facilitators under sub-section (5) of
section 51;
(y) the manner of imposing fine under sub-section (1) of section 55;
(z) the manner of composition of offence by a Gazetted Officer specified under
25 sub-section (4) of section 55;
(za) any other matter which is required to be, or may be, prescribed under the
provisions of this Code.
(3) Every rule made by the Central Government under this section shall be laid, as soon
as may be after it is made, before each House of Parliament, while it is in session, for a total
30 period of thirty days which may be comprised in one session or in two or more successive
sessions, and if, before the expiry of the session immediately following the session or the
successive sessions as aforesaid, both Houses agree in making any modification in the rule
or both Houses agree that rule should not be made, the rule shall thereafter have effect only
in such modified form or be of no effect, as the case may be; so, however, that any such
35 modification or amendment shall be without prejudice to the validity of anything previously
done under that rule.
(4) Every rule made by the State Government under this section shall, as soon as
possible after it is made, be laid before the State Legislature.
67. (1) If any difficulty arises in giving effect to the provisions of this Code, the Central Power to
Government may, by order published in the Official Gazette, make such provisions not remove
40
difficulties.
inconsistent with the provisions of this Code, as may appear to be necessary for removing
the difficulty:
Provided that no such order shall be made under this section after the expiry of
a period of two years from the commencement of this Code.
45 (2) Every order made under this section shall be laid, as soon as may be after it is made,
before each House of Parliament.
<< 160 >>

28
Repeal and 68. (1) The Payment of Wages Act, 1936, the Minimum Wages Act, 1948, the Payment 4 of 1936.
savings. of Bonus Act, 1965 and the Equal Remuneration Act, 1976 are hereby repealed. 11 of 1948.
21 of 1965.
25 of 1976.
(2) Notwithstanding such repeal, anything done or any action taken under the
enactments so repealed including any notification, nomination, appointment, order or direction
made thereunder or any amount of wages provided in any provision of such enactments for 5
any purpose shall be deemed to have been done or taken or provided for such purpose under
the corresponding provisions of this Code and shall be in force to the extent they are not
contrary to the provisions of this Code till they are repealed under the corresponding
provisions of this Code or by the notification to that effect by the Central Government.
(3) Without prejudice to the provisions of sub-section (2), the provisions of section 6 10
of the General Clauses Act, 1897 shall apply to the repeal of such enactments. 10 of 1897.
<< 161 >>

THE FIRST SCHEDULE
[See sections 26 (7) and 36]
In this Schedule, the total amount of bonus equal to eight and one-third per cent. of the
annual wages payable to all the employees is assumed to be Rs. 1,04,167. Accordingly, the
maximum bonus to which all the employees are entitled to be paid (twenty per cent. of the
annual wages of all the employees) would be Rs. 2,50,000.
Year Amount equal to Amount payable as Set on or set Total set on or
sixty per cent. or bonus off of the year set off carried
sixty-seven per carried forward forward
cent. as the case
may be, of
available surplus
allocable as bonus
Rs. Rs. Rs. Rs. Of

(year)
1. 1,04,167 1,04,167# Nil Nil
2. 6,35,000 2,50,000* Set on Set on (2)

2,50,000* 2,50,000*
3. 2,20,000 2,50,000* (inclusive of Nil Set on 2,20,000 (2)

30,000 from year-2)
4. 3,75,000 2,50,000* Set on Set on 2,20,000 (2)

1,25,000 1,25,000 (4)
5. 1,40,000 2,50,000* (inclusive of Nil Set on 1,10,000 (2)

1,10,000 from year-2) 1,25,000 (4)
6. 3,10,000 2,50,000* Set on 60,000 Set on Nil ## (2)

1,25,000 (4)
60,000 (6)
7. 1,00,000 2,50,000* (inclusive of Nil Set on 35,000 (6)

1,25,000 from year-4
and 25,000 from year-6)
8. Nil 1,04,167# (inclusive of Set on 69,167 Set off

(due to loss) 35,000 from year-6) 69,167 (8)
9. 10,000 1,04,167# Set off 94,167 Set off

69,167 (8)
94,167 (9)
10. 2,15,000 1,04,167# (after setting Nil Set off 52,501 (9)
off 69,167 from year-8
and 41,666 from year-9)
*Maximum amount admissible.

# Minimum amount admissible.
##The Balance of Rs. 1,10,000 set on from year-2 lapses.
29
<< 162 >>

THE SECOND SCHEDULE
[See section 32(a)]
COMPUTATION OF GROSS PROFITS
Accounting year ending—
Item Particulars Amount of Amount of Remarks
No. sub-items main items
(in Rupees) (in Rupees)
1 2 3 4 5
*1. Net profit as shown in the Profit and Loss account

after making usual and necessary provisions.
2. Add back provision for: **
(a ) Bonus to employees **
(b ) Depreciation
(c) Development rebate reserve
(d ) Any other reserves
Total of Item No.2……….. Rs. ..............
3. Add back also:
(a ) Bonus paid to employees in respect of previous **
accounting years.
(b ) The amount debited in respect of gratuity paid
or payable to employees in excess of the
aggregate of—
(i) the amount, if any, paid to, or provided
for payment to, an approved gratuity
fund; and
(ii) the amount actually paid to employees
on their retirement or on termination of
their employment for any reason.
(c) Donations in excess of the amount admissible
for income-tax.
(d ) Capital expenditure (other than capital **
expenditure on scientific research which is
allowed as a deduction under any law for the
time being in force relating to direct taxes)
and capital losses (other than losses on sale of
capital assets on which depreciation has been
allowed for income-tax).
(e) Any amount certified by the Reserve Bank of
India in terms of sub-section (2) of section
34A of the Banking Regulation Act, 1949 (10
of 1949).
(f) Losses of, or expenditure relating to, any Rs. ..............
business situated outside India.
Total of Item No.3………..
4. Add also income, profits or gains (if any) credited
directly to published or disclosed reserves, other
than—
(i) capital receipts and capital profits (including
profits on the sale of capital assets on which
depreciation has not been allowed for income-
tax);
30
<< 163 >>

31
1 2 3 4 5
(ii) profits of, and receipts relating to, any business

situated outside India;
(iii) income of foreign banking companies from Rs. ..............
investment outside India.
Net total of item No. 4…….
5. Total of item Nos.1, 2, 3 and 4… Rs. ..............
6. Deduct:
(a) Capital receipts and capital profits (other than ***
profits on the sale of assets on which
depreciation has been allowed for income-tax).
(b ) Profits of, and receipts relating to, any business ***
situated outside India.
(c) Income of foreign banking companies from ***
investments outside India.
(d ) Expenditure or losses (if any) debited directly
to published or disclosed reserves, other than—
(i) capital expenditure and capital losses
(other than losses on sale of capital assets
on which depreciation has not been
allowed for income-tax);
(ii) losses of any business situated outside ***
India.
(e) In the case of foreign banking companies ***
proportionate administrative (overhead)
expenses of Head-Office allocable to Indian
business.
(f) Refund of any excess direct tax paid for ***
previous accounting years and excess
provision, if any, of previous accounting years,
relating to bonus, depreciation or development
rebate, if written back.
(g ) Cash subsidy, if any, given by the government
or by any body corporate established by any
law for the time being in force or by any other
agency through budgetary grants, whether
given directly or through any agency for
specified purposes and the proceeds of which
are reserved for such purposes . Rs. ..............
Total of Item No. 6 ……
7. Gross profits for purposes of bonus (item No. 5 Rs. .............. ****
minus item No. 6)
Explanation.—In sub-item (b) of item 3, “approved gratuity fund” has the same meaning assigned to it in
clause (5) of section 2 of the Income-tax Act.
*Where the profit subject to taxation is shown in the Profit and Loss account and the provision made for
taxes on income is shown, the actual provision for taxes on income shall be deducted from the profit.
**If, and to the extent, charged to profit and loss account.
***If, and to the extent, credited to profit and loss account.
****In the proportion of Indian Gross Profit (item No. 7) to Total World Gross Profit (as per consolidated
profit and loss account adjusted as in item No. 2 above only).
<< 164 >>

THE THIRD SCHEDULE
[See section 32(b)]
COMPUTATION OF GROSS PROFITS
Accounting year ending—
Item Particulars Amount of Amount of Remarks
No. sub-items main items
(in Rupees) (in Rupees)
1 2 3 4 5
1. Net profit as per profit and loss account.

2. Add back provision for:
(a ) Bonus to employees.
(b ) Depreciation.
(c) Direct taxes, including the provision (if any) *
for previous accounting years.
(d ) Development rebate / Investment allowance / *
Development allowance reserve.
(e) Any other reserves..........
Total of item No.2……….. Rs. ..............
3. Add back also:
(a ) Bonus paid to employees in respect of previous *
accounting years.
(aa) The amount debited in respect of gratuity paid
or payable to employees in excess of the
aggregate of—
(i) the amount, if any, paid to, or provided
for payment to, an approved gratuity
fund; and
(ii) the amount actually paid to employees
on their retirement or on termination of
their employment for any reason.
(b ) Donations in excess of the amount admissible
for income-tax.
(c) Any annuity due, or commuted value of any *
annuity paid, under the provisions of section
280D of the Income-tax Act during the
accounting year.
(d ) Capital expenditure (other than capital *
expenditure on scientific research which is
allowed as a deduction under any law for the
time being in force relating to direct taxes)
and capital losses (other than losses on sale of
capital assets on which depreciation has been
allowed for income-tax or agricultural income-
tax).
(e) Losses of, or expenditure relating to, any Rs. ..............
business situated outside India.
Total of item No.3………..
32
<< 165 >>

33
1 2 3 4 5
4. Add also income, profits or gains (if any) credited

directly to reserves, other than—
(i) capital receipts and capital profits (including
profits on the sale of capital assets on which
depreciation has not been allowed for income-
tax or agricultural income-tax);
(ii) profits of, and receipts relating to, any business
situated outside India;
(iii) income of foreign concerns from investment
outside India.
Net total of item No. 4……. Rs. ..............
5. Total of item Nos.1, 2, 3 and 4… Rs. ..............

6. Deduct:
(a ) Capital receipts and capital profits (other than
profits on the sale of assets on which
**
depreciation has been allowed for income-tax
or agricultural income-tax).
(b ) Profits of, and receipts relating to, any business
situated outside India. **
(c) Income of foreign concerns from investments **

outside India.
(d ) Expenditure or losses (if any) debited directly
to reserves, other than—
(i) capital expenditure and capital losses
(other than losses on sale of capital assets
on which depreciation has not been
allowed for income-tax or agricultural
income-tax);
(ii) losses of any business situated outside ***
India.
(e) In the case of foreign concerns proportionate
**
administrative (overhead) expenses of Head-
Office allocable to Indian business.
(f) Refund of any excess direct tax paid for
previous accounting years and excess **
provision, if any, of previous accounting years,
relating to bonus, depreciation, taxation or
development rebate or development
allowance, if written back.
(g ) Cash subsidy, if any, given by the Government
or by any body corporate established by any
law for the time being in force or by any other
agency through budgetary grants, whether
given directly or through any agency for
specified purposes and the proceeds of which
are reserved for such purposes.
Total of item No. 6 …… Rs. ..............
7. Gross profits for purposes of bonus (item No. 5 Rs. ..............
minus item No. 6)
Explanation.—In sub-item (aa) of item 3, “approved gratuity fund” has the same meaning assigned to it in
clause (5) of section 2 of the Income-tax Act.
*If, and to the extent, charged to profit and loss account.
**If, and to the extent, credited to profit and loss account.
***In the proportion of Indian Gross Profit (item No. 7) to Total World Gross Profit (as per consolidated
profit and loss account, adjusted as in item No. 2 above only).
<< 166 >>

THE FOURTH SCHEDULE
[See section 34(d)]
Item Category of employer Further sums to be deducted
No.
1 2 3
1. Company, other than a (i) The dividends payable on its preference share capital for the
banking company accounting year calculated at the actual rate at which such dividends
are payable;
(ii) eight and a half per cent. of its paid-up equity share capital as at
the commencement of the accounting year;
(iii) six per cent. of its reserves shown in its balance-sheet as at the
commencement of the accounting year, including any profits
carried forward from the previous accounting year:
Provided that where the employer is a foreign company within
the meaning of clause (42) of section 2 of the Companies Act,
2013 (18 of 2013), the total amount to be deducted under this
item shall be eight and a half per cent. on the aggregate of the
value of the net fixed assets and the current assets of the company
in India after deducting the amount of its current liabilities (other
than any amount shown as payable by the company to its Head
Office whether towards any advance made by the Head Office or
otherwise or any interest paid by the company to its Head Office)
in India.
2. Banking Company (i) The dividends payable on its preference share capital for the
accounting year calculated at the rate at which such dividends are
payable;
(ii) seven and a half per cent. of its paid-up equity share capital as at
the commencement of the accounting year;
(iii) five per cent. of its reserves shown in its balance sheet as at the
commencement of the accounting year, including any profits
carried forward from the previous accounting year;
(iv) any sum which, in respect of the accounting year, is transferred
by it—
(a) to a reserve fund under sub-section (1) of section 17 of the
Banking Regulation Act, 1949 (10 of 1949); or
(b) to any reserves in India in pursuance of any direction or
advice given by the Reserve Bank of India,
whichever is higher:
Provided that where the banking company is a foreign company
within the meaning of clause (42) of section 2 of the Companies
Act, 2013 (18 of 2013), the amount to be deducted under this
item shall be the aggregate of—
(i) the dividends payable to its preference shareholders for the
accounting year at the rate at which such dividends are payable
on such amount as bears the same proportion to its total
preference share capital as its total working funds in India bear to
its total world working funds;
(ii) seven and a half per cent. of such amount as bears the same
proportion to its total paid-up equity share capital as its total
working funds in India bear to its total world working funds;
(iii) five per cent. of such amount as bears the same proportion to its
total disclosed reserves as its total working funds in India bear to
its total world working funds;
(iv) any sum which, in respect of the accounting year, is deposited by
it with the Reserve Bank of India under sub-clause (ii) of clause
(b) of sub-section (2) of section 11 of the Banking Regulation
34
<< 167 >>

35
1 2 3
Act, 1949 (10 of 1949), not exceeding the amount required

under the aforesaid provision to be so deposited.
3. Corporation (i) Eight and a half per cent of its paid-up capital as at the
commencement of the accounting year;
(ii) six per cent. of its reserves, if any, shown in its balance-sheet as
at the commencement of the accounting year, including any
profits carried forward from the previous accounting year.
4. Co-operative society (i) Eight and a half per cent. of the capital invested by such society
in its establishment as evidenced from its books of account at the
commencement of the accounting year;
(ii) such sums as has been carried forward in respect of the accounting
year to a reserve fund under any law relating to co-operative
societies for the time being in force.
5. Any other employer Eight and a half per cent. of the capital invested by him in his
not falling under any of establishment as evidenced from his books of account at the
the aforesaid categories commencement of the accounting year:
Provided that where such employer is a person to whom Chapter XXII-A
of the Income-tax Act applies, the annuity deposit payable by him
under the provisions of that Chapter during the accounting year shall
also be deducted:
Provided further that where such employer is a firm, an amount equal
to twenty-five per cent. of the gross profits derived by it from the
establishment in respect of the accounting year after deducting
depreciation in accordance with the provisions of clause (a) of section
34 by way of remuneration to all the partners taking part in the conduct
of business of the establishment shall also be deducted, but where the
partnership agreement, whether oral or written, provides for the payment
of remuneration to any such partner, and—
(i) the total remuneration payable to all such partners is less than
the said twenty-five per cent. the amount payable, subject to a
maximum of forty-eight thousand rupees to each such partner;
or
(ii) the total remuneration payable to all such partners is higher than
the said twenty-five per cent. such percentage, or a sum calculated
at the rate of forty-eight thousand rupees to each such partner,
whichever is less, shall be deducted under this proviso:
Provided also that where such employer is an individual or a Hindu
undivided family—
(i) an amount equal to twenty-five per cent. of the gross profits
derived by such employer from the establishment in respect of
the accounting year after deducting depreciation in accordance
with the provisions of clause (a) of section 34; or
(ii) forty-eight thousand rupees,
whichever is less by way of remuneration to such employer, shall also
be deducted.
6. Any employer falling In addition to the sums deductible under any of the aforesaid Items such
under item No. 1 or item sums as are required to be appropriated by licensee in respect of the
No. 3 or item No. 4 or accounting year to a reserve, if any, shall also be deducted.
item No. 5 and being a
licensee defined in clause
(39) of section 2 of the
Electricity Act, 2003
(36 of 2003).
Explanation.—The expression “reserves” occurring in column (3) against Item Nos. 1(iii), 2(iii)
and 3(ii) shall not include any amount set apart for the purpose of—
(i) payment of any direct tax which, according to the balance-sheet, would be payable;
(ii) meeting any depreciation admissible in accordance with the provisions of clause (a) of
section 34;
<< 168 >>

36
(iii) payment of dividends which have been declared,

but shall include—
(a) any amount, over and above the amount referred to in clause (i) of this Explanation, set apart
as specific reserve for the purpose of payment of any direct tax; and
(b) any amount set apart for meeting any depreciation in excess of the amount admissible in
accordance with the provisions of clause (a) of section 34.
<< 169 >>

STATEMENT OF OBJECTS AND REASONS
The Second National Commission on Labour, which submitted its report in June, 2002
had recommended that the existing set of labour laws should be broadly amalgamated into
the following groups, namely:––
(a) industrial relations;
(b) wages;
(c) social security;
(d) safety; and
(e) welfare and working conditions.
2. In pursuance of the recommendations of the said Commission and the deliberations
made in the tripartite meeting comprising of the Government, employers’ and industry
representatives, it has been decided to bring the proposed legislation, namely, the Code on
Wages, 2017. The proposed legislation intends to amalgamate, simplify and rationalise the
relevant provisions of the following four central labour enactments relating to wages,
namely:––
(a) the Payment of Wages Act, 1936;
(b) the Minimum Wages Act, 1948;
(c) the Payment of Bonus Act, 1965; and
(d) the Equal Remuneration Act, 1976.
3. The amalgamation of the said laws will facilitate the implementation and also remove
the multiplicity of definitions and authorities without compromising on the basic concepts
of welfare and benefits to workers. The proposed legislation would bring the use of
technology in its enforcement. All these measures would bring transparency and
accountability which would lead to more effective enforcement. Widening the scope of
minimum wages to all workers would be a big step for equity. The facilitation for ease of
compliance of labour laws will promote in setting up of more enterprises thus catalysing the
creation of employment opportunities.
4. The salient features of the Code on Wages, 2017, inter alia, are as follows:––
(a) it provides for all essential elements relating to wages, equal remuneration,
its payment and bonus;
(b) the provisions relating to wages shall be applicable to all employments
covering both organised as well as un-organised sectors;
(c) the power to fix minimum wages continues to be vested in the Central
Government as well the State Government in their respective spheres;
(d) it enables the appropriate Government to determine the factors by which the
minimum wages shall be fixed for different category of employees. The factors shall be
determined taking into account the skills required, the arduousness of the work assigned,
geographical location of the workplace and other aspects which the appropriate
Government considers necessary;
(e) the provisions relating to timely payment of wages and authorised deductions
from wages,which are presently applicable only in respect of employees drawing wages
upto eighteen thousand rupees per month, shall be made applicable to all employees
irrespective of wage ceiling. The appropriate Government may extend the coverage of
such provisions to the Government establishments also;
37
<< 170 >>

38
(f) it provides that the wages to employees mayalso be paid by cheque or

through digital or electronic mode or by crediting it in the bank account of the employee.
However, the appropriate Government may specify the industrial or other
establishment, where the wages are to be paid only by cheque or through digital or
electronic mode or by crediting the wages in the bank account of the employee;
(g) it provides for national minimum wage for different geographical areas so as
to ensure that no State Government fixes the minimum wage below the national minimum
wage, notified for that area by the Central Government;
(h) in order to remove the arbitrariness and malpractices in inspection, it empowers
the appropriate Government to appoint Facilitators in the place of Inspectors, who
would supply information and advice the employers and workers concerning the
most effective means of complying with the provisions of the proposed legislation. It
has also been provided that the inspections are carried out through a transparent/
web based inspection scheme.
(i) it empowers the appropriate Government to determine the ceiling of wage
limit for the purpose of eligibility of bonus and calculation of bonus, by notification,
which will make it easier to revise ceilings;
(j) in the place of number of authorities at multiple levels, it empowers the
appropriate Government to appoint one or more authorities to hear and decide the
claims under the provisions of the proposed legislation;
(k) it enables the appropriate Government to appoint an appellate authority to
hear appeals so as to ensure speedy, cheaper and efficient redressal of grievances
and settlement of claims;
(l) it provides for graded penalty for different types of contraventions of the
provisions of the proposed legislation;
(m) it provides that the Facilitator shall give an opportunity to the employer
before initiation of prosecution proceedings in cases of contravention, so as to comply
with the provisions of the proposed legislation. However, in case of repetition of the
contravention within a period of five years such opportunity shall not be provided;
(n) it provides for compounding of those offences which are not punishable
with imprisonment;
(o) it provides that where a claim has been filed for non-payment of remuneration
or bonus or less payment of wages or bonus or on account of making deduction not
authorised by the proposed legislation, the burden shall be on the employer to prove
that the said dues have been paid to the employee;
(p) it enables the appropriate Government to constitute Advisory Boards at
Central and State levels to advice the Central Government and the State Governments,
respectively, on matters relating to wages, women employment, etc.;
(q) the period of limitation for filing of claims by a worker has been enhanced to
3 years as against existing time period verying from 6 months to 2 years, to provide a
worker more time to settle his claims.
5. The notes on clauses explain in detail the various provisions contained in the Bill.
6. The Bill seeks to achieve the above objectives.
NEW DELHI; BANDARU DATTATREYA.

The 3rd August, 2017.
<< 171 >>

Notes on Clauses
Clause 2 of the Bill seeks to define certain expressions used in the Code, which, inter
alia, include “accounting year”, “Advisory Board”, “appropriate Government”, “employee”,
“employer”, “Tribunal”, “wages” and “worker”.
Clause 3 of the Bill seeks to provide for the prohibition of discrimination on ground of
gender. It also provides that no employer shall, for the purpose of prohibiting the
discrimination among employees on ground of sex in matters relating to wages, shall reduce
the rates of wages of any employee.
Clause 4 of the Bill provides for determination of disputes with regard to same or
similar nature of work. The dispute shall be decided by such authority as may be notified by
the appropriate Government.
Clause 5 of the Bill seeks to provide for payment of minimum rates of wages. The
wages less than the minimum rates of wages notified by the appropriate Government for a
State or any part thereof shall not be paid to any employee.
Clause 6 of the Bill seeks to provide for fixation of minimum wages. Such fixation of
minimum wages by the appropriate Government shall be subject to the powers of the
Central Government to fix national minimum wages. The minimum wages shall be for time
work, piece work, and for the period by hours or day or month.
Clause 7 of the Bill seeks to provide components of the minimum wages. Any minimum
rate of wages fixed or revised by the appropriate Government may, inter alia, consist of
basic rate, cost of living allowance and value of the concessions, if any.
Clause 8 of the Bill seeks to provide the procedure for fixing and revising minimum
wages.
Clause 9 of the Bill seeks to provide the power of Central Government to fix national
minimum wages. Different national minimum wages may be fixed for different States or
different geographical areas. The Central Government before fixing the national minimum
wage may obtain the advice of the Central Advisory Board.
Clause 10 of the Bill seeks to provide, inter alia, for wages of employee who works
for less than normal working day. An employee, where his failure to work is caused by his
un-willingness to work and not by omission of the employer to provide him with work, shall
not be entitled to receive wages for a full normal working day.
Clause 11 of the Bill seeks to provide wages for two or more classes of work. It
provides that an employee who does two or more classes of work to each of which different
rate of minimum wages is applicable, the employer shall pay to such employee in respect of
the time respectively occupied in such class of work, wages at not less than the minimum
rate in force in respect of each such class.
Clause 12 of the Bill seeks to provide minimum time rate wages for piece work.
Clause 13 of the Bill seeks to provide for fixing hours of work for normal working day,
day of rest and payment for work on day of rest by the appropriate Government.
Clause 14 of the Bill seeks to provide for payment of wages for overtime work which
is in excess of the number of hours constituting a normal working and the overtime rate shall
not be less than twice the normal rate of wages.
Clause 15 of the Bill seeks to provide for payment of all wages in current coin or
currency notes or by cheque or by crediting the wages through digital or electronic mode in
the bank account of the employee except as may be notified by the appropriate Government
in specified industrial or other establishment in which wages to be paid only by cheque or
by crediting in bank account.
39
<< 172 >>

40
Clause 16 of the Bill seeks to provide for fixation of wage period for employees which
shall not be more than a month either as daily or weekly or fortnightly or monthly and the
said wage periods may be fixed different for different establishments.
Clause 17 of the Bill seeks to provide time limit for payment of wages on monthly
basis, daily basis, weekly basis and fortnightly basis. In case of removal, dismissal,
retrenchment, resignation from service or in the case of un-employment due to closure of
the establishment, the wages payable to an employee shall be paid within two weeks. The
appropriate Government may provide time limit apart from the time limit provided in this
clause.
Clause 18 of the Bill provides for deductions which may be made from the wages of an
employee. No deduction from the wages shall be made except those as are authorised under
the proposed legislation. The upper ceiling of deduction is fifty per cent. of the wage in any
wage period.
Clause 19 of the Bill seeks to provide the imposition of fines by the employer on any
employee. The fine shall be imposed on any employee only in accordance with the approval
and procedure as specified in the clause.
Clause 20 of the Bill seeks to provide for the deductions for absence from duty. The
amount of such deductions shall in no case bear to the wages payable to the employee in
respect of the wage period for which the deductions is made in a larger proportion than the
period for which he was absent bears to the total period within such wage-period during
which by the terms of his employment he was required to work. An employee shall be
deemed to be absent from the place where he is required to work if, although presence in
such place, he refuses in pursuance of a stay-in strike for any other cause which is not
reasonable in the circumstances, to carry out his work.
Clause 21 of the Bill seeks to provide deductions for damage or loss. The deductions
for damage or loss shall not exceed the amount of the damage or loss caused to the employer
by negligence or default of the employee. The deductions shall not be met until the employee
has been provided an opportunity of showing cause against the deductions or otherwise
than in accordance with the procedure prescribed by rules.
Clause 22 of the Bill provides for deductions for services rendered. Such deductions
shall not be made from the wages of employee unless the house accommodation, amenity or
service has been accepted by him as a term of employment or as otherwise. Such deductions
shall also not exceed an amount equivalent to the value of such amenity or service supplied.
The appropriate Government may impose conditions for such purpose.
Clause 23 of the Bill seeks to provide for deductions for recovery of advances.
Certain conditions have been provided in the said clause subject to which the deductions
shall be made for the recovery of advance of money given to an employee before and after
the employment began.
Clause 24 of the Bill seeks to provide deductions for recovery of loans and the
manner for such recovery shall be provided in the rules.
Clause 25 of the Bill seeks to provide that the provisions relating to payment of
wages provided in Chapter III in the proposed Code shall not be applicable to Government
establishments unless the appropriate Government applies such provisions to any
Government establishment as may be specified by it by notification.
Clause 26 of the Bill seeks to make provisions for eligibility for bonus. The threshold
limit for payment of the bonus is the wages not exceeding such amount per mensem as
determined by notification, by the appropriate Government. Where the wages of the employee
exceeds such amount per mensem, as determined by notification, by the appropriate
Government, the bonus payable to such employee shall be calculated as if the wages of
such employee were such amount, so determined by the appropriate Government or the
<< 173 >>

41
minimum wages fixed by the appropriate Government, whichever is higher. The other details
regarding the payment of bonus have also been provided in this clause.
Clause 27 of the Bill seeks to provide for proportionate reduction in bonus in case
where an employee has not worked for all the working days in an accounting year, etc.
Clause 28 of the Bill seeks to provide for computation of the number of working days
for the purposes where an employee has not worked for all the working days in an accounting
year. Provisions have been made in this clause to cover certain days as working days as
specified therein.
Clause 29 of the Bill seeks to specify certain disqualifications, on the basis of dismissal
from service for fraud, etc., for receiving bonus.
Clause 30 of the Bill seeks to provide for the purposes of computation of bonus that
the establishment shall include its departments, undertakings and branches, where for any
accounting year a separate balance sheet and profit and loss account are prepared and
maintained in respect of any such department or undertaking or branch, then, such department
or undertaking or branch shall be treated as a separate establishment for the purpose of
computation of bonus for the accounting year, such department, undertaking or branch
was, immediately before the commencement of that accounting year treated as part of the
establishment for the purpose of computation of bonus.
Clause 31 of the Bill seeks to provide for payment of bonus out of allocable surplus.
It also empowers the appropriate Government to notify the authority having jurisdiction for
calling upon the employer to produce the balance sheet before it.
Clause 32 of the Bill seeks to provide for the computation of gross profit in the case
of a banking company in accordance with the Second Schedule and in any other case in the
manner specified in the Third Schedule.
Clause 33 of the Bill seeks to provide for the computation of available surplus in
respect of any accounting year.
Clause 34 of the Bill seeks to specify the sums which shall be deducted from the gross
profits as prior charges which includes the sums specified in the Fourth Schedule.
Clause 35 of the Bill seeks to provide for the calculation of direct tax payable by the
employer. Such direct tax for any accounting year shall be calculated at the rate applicable
to the income of the employer for that year subject to the provisions specified in that clause.
Clause 36 of the Bill seeks to provide for set on and set off of allocable surplus. It
provides as to how the allocable surplus exceeding the amount of maximum bonus payable
to the employee shall subject to the limit of 20 per cent. of the total salary or wages of the
employee in that accounting year be carried forward for being set on in the succeeding
accounting years up to and inclusive of fourth accounting year for the purpose of payment
of bonus in the manner illustrated in the First Schedule to the proposed Code. It further
provides that where for any accounting year, there is no available surplus or the allocable
surplus in respect of that year, falls short of the amount of the minimum bonus payable to
the employees and there is no amount or sufficient amount carried forward and set on which
could be utilised for the purpose of the minimum bonus, then, such minimum amount or the
deficiency shall be carried forward for being set off in the succeeding accounting years and
so on up to and inclusive of the fourth accounting year in the manner illustrated in the First
Schedule. It also provides that the applicability of the First Schedule in other cases and for
the taking in to account at first instance the amount of set on or set off carried forward from
the earliest accounting year.
Clause 37 of the Bill seeks to provide for the adjustment of customary or interim
bonus payable under the proposed legislation.
Clause 38 of the Bill seeks to provide for deduction of the amount of loss caused by
the employee on account of misconduct from the amount of bonus payable by the employer
<< 174 >>

42
to the employee in respect of the concerned accounting year only and the employee shall
be entitled to receive the balance, if any.
Clause 39 of the Bill seeks to provide the time limit for payment of bonus. The bonus
payable to an employee shall be paid by crediting in the bank account of the employee by
his employer. It also specifies regarding the extension of period for payment of bonus in
certain cases and the upper limit of the extension which shall not exceed two years and in
case of a dispute for payment at higher rate, the employer shall pay eight and one third per
cent. of the wages earned by the employee as per the provisions of the proposed legislation
within the time limit.
Clause 40 of the Bill seeks to provide for the application of the provisions of Chapter
IV regarding the payment of bonus to establishments in public sector in certain cases as
specified in the said clause.
Clause 41 of the Bill seeks to provide for the non-applicability of the provisions of
Chapter IV regarding the payment of bonus in certain cases which, inter alia, include
employees employed in Life Insurance Corporation of India, Indian Red Cross Society or
any other institution of a like nature including its branches, Reserve Bank of India, etc. It
also provides that the provisions regarding the payment of bonus shall apply to such
establishments in which twenty or more persons employed or were employed on any day
during an accounting year.
Clause 42 of the Bill seeks to provide for Central Advisory Board to be constituted by
the Central Government which shall be tripartite in nature having representatives from
employees, employers and independent persons as well as there will be one third
representation of women in this Board and the said Board shall advice the Central Government
on issues referred to it. It also provides that every State Government shall also constitute a
State Advisory Board for advising the State Government, inter alia, on fixation or revision
of minimum wages, increasing employment opportunities, etc. The State Advisory Board
may constitute one or more committees or sub-committees to look into issues pertaining to
matters specified in the clause. One third members of the State Advisory Board shall be
women.
Clause 43 of the Bill seeks to provide the responsibility for payment of various dues
of the employees. In case of failure to pay the dues, the concerned company or firm or
association or any other person who is the proprietor of the establishment shall be
responsible for the payment of dues.
Clause 44 of the Bill seeks to provide for payment of various undisbursed dues of the
employee in case of his death. Such dues will be paid to the persons nominated by the
employee and where there is no such nomination or for any reasons such amount cannot be
paid to the person nominated, then, the dues shall be deposited with the Authority specified
in the rules, who shall deal with the amount in the manner provided in such rules. Where the
dues are paid by the employer in accordance with this clause by the employer, then, he shall
be discharged of his liability to pay the dues.
Clause 45 of the Bill seeks to provide for appointment of Authority by the appropriate
Government to decide the claim of employees which arises under the provisions of the
proposed legislation. The said authority shall have powers to award payment of claim
amount along with compensation which may extend up to ten times of the claim amount.
Further, if an employer fails to pay the amount of claim and compensation awarded by the
Authority, then, the said Authority shall issue a recovery certificate to the Collector or
District Magistrate of the district where the establishment is located who shall recover the
same as arrears of land revenue and remit the same to the authority for payment to the
concerned employee. Any application before the authority for claim referred above may be
filed by the employee concerned or Facilitator or by any Trade Union of which the employee
is a member.
<< 175 >>

43
Clause 46 of the Bill provides that if a dispute arises between an employer and his
employees with respect to the bonus payable under the proposed legislation or the application
of this Code, in respect of bonus, to an establishment in public sector, then, such dispute shall
be deemed to be an industrial dispute under the Industrial Disputes Act, 1947.
Clause 47 of the Bill seeks to provide that if in any dispute referred to the authority,
appellate authority, a Tribunal or an arbitrator, any corporation or a company (other than a
banking company) submits to the said authority, appellate authority, a Tribunal or an arbitrator,
the documents like balance sheet and profit and loss account duly audited by the Comptroller
and Auditor General of India or by auditors duly qualified to act as auditors of companies
under Companies Act, 2013, then, such documents shall be presumed to be accurate and it
shall not be necessary for the corporation or company to prove the accuracy of such
statements. However, when an application is made to the said authority, appellate authority,
Tribunal or arbitrator by any employee or a Trade Union being a party to the dispute
requiring any clarification to the said statements, then, on order of the authority, appellate
authority, Tribunal or arbitrator the concerned corporation or company, as the case may be,
shall clarify the same.
Clause 48 of the Bill seeks to provide for audit of accounts of employers not being
corporations or companies. Where an employer fails to get the accounts audited then there
is provision for getting the accounts audited by such auditor or auditors as the authority
thinks fit and the expenses of and incidental to such audit including the remuneration of
auditor or auditors shall be determined by the authority and be paid by the employer. In
case of failure of payment, this clause contains the provision for the recovery of such
expenses.
Clause 49 of the Bill makes provisions for appeal against the order of the authority.
Clause 50 of the Bill seeks to provide for records, returns and notices. The said clause
makes provisions for the maintenance of register by the employer containing the details
with regard to persons employed, muster roll, wages, and such other details in the manner
to be specified in the rules by the appropriate Government. It also provides for the display
of a notice on the notice board at a prominent place at the establishment containing the
abstract of the proposed legislation, category-wise wage rates of employees, wage period,
day or date and time of payment of wages and the name and address of the Facilitator
having jurisdiction. There is provision for issue of wage slip. The employer who employs
not more than five persons for agriculture or domestic purpose is exempted from the provision
but when demanded, he shall produce before the Facilitator the reasonable proof of the
payment of wages to the persons employed.
Clause 51 of the Bill seeks to provide for appointment of Facilitators and their powers.
The Facilitator may supply information and advise to employer and workers concerning the
most effective means of complying with the provisions of the proposed legislation. The
said clause also empowers the Facilitators to inspect the establishment based on inspection
scheme.
Clause 52 of the Bill seeks to provide for cognizance of offences under the provisions
of the proposed legislation. The cognizance of the offences shall be taken by the court on
a complaint. No court inferior to the Metropolitan Magistrate or Magistrate of the First
Class shall try the offences.
Clause 53 of the Bill seeks to provide penalties for offences. Enhanced penalties shall
be imposed on the offender who is again found guilty of similar offence already committed
by him, for which he has been convicted. The Facilitator shall, before initiation of prosecution
proceedings, give an opportunity to the employer to comply with the provisions of the
proposed legislation. The prosecution proceedings shall not be initiated against the employer
who complies with the said provisions within the period specified. Such opportunity shall
not be accorded to an employer, if the violation of the same nature of the provisions of
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44
proposed legislation is repeated within a period of five years from the date on which the first
violation was committed.
Clause 54 of the Bill seeks to provide for offences by companies. If the offence is
committed by a company, every person who at the time the offence was committed, was in
charge of and was responsible to the company for the conduct of business of the company,
as well as the company shall be deemed to be guilty of offence and shall be liable to be
proceeded against and punished accordingly. Protection has been provided where offence
has been committed without the knowledge or where all due diligence to prevent the
commission of the offence has been exercised. The director, manager, secretary or other
officer of the company with the consent or connivance of whom the offence has been
committed shall also be deemed to be guilty.
Clause 55 of the Bill seeks to provide for composition of offences. Only the offences
for which there is no punishment with imprisonment shall be compounded. The compounding
money shall be a sum of fifty per cent. of maximum fine. There is no compounding for a
similar offence compounded earlier or for commission of which conviction was made
committed for the second time or thereafter within a period of five years.
Clause 56 of the Bill seeks to provide bar of suits. The matters in which the court shall
not entertain the suit, inter alia, relate to the recovery of minimum wages, any deduction
from wages, discrimination in wages and payment of bonus.
Clause 57 of the Bill seeks to provide for protection of action taken in good faith by
the appropriate Government or any officer of that Government under the provisions of the
proposed legislation.
Clause 58 of the Bill seeks to provide regarding burden of proof. The burden of
proving that the dues on account of remuneration or bonus, etc., have been paid shall be on
the employer.
Clause 59 of the Bill seeks to provide that any contract or agreement whereby an
employee relinquishes the right to any amount or the right to bonus due to him under the
provisions of the proposed legislation shall be null and void in so far as it purports to
remove or reduce the liability of any person to pay such amount.
Clause 60 of the Bill seeks to provide for overriding effect in respect of laws,
agreements, etc., which are inconsistent with the provisions of the proposed legislation.
Such laws, agreements, etc., shall not affect the provisions of the proposed legislation.
Clause 61 of the Bill seeks to provide for delegation of powers. The appropriate
Government may, by notification, delegate the powers exercisable by it in the proposed
Code with or without any condition to the officer or authority subordinate to that Government,
etc., as may be specified in the notification.
Clause 62 of the Bill seeks to provide for exemption of employer from liability in
certain cases. The employer who is charged with an offence under the provisions of the
proposed legislation shall be entitled upon complaint duly made by him, to have any other
person whom he charges as the actual offender, brought before of the court at the time
appointed for hearing the charge and if used he proves that he has, after the commission of
the offence has been proved, due diligence to enforce the execution of the provisions of the
proposed legislation and the other person committed the offence without his knowledge,
consent or connivance, then, that other person shall be convicted of the offence and the
employer shall be discharged.
Clause 63 of the Bill seeks to provide for protection against attachment of assets of
employer with Government.
Clause 64 of the Bill seeks to provide for the powers of the Central Government to
give directions to the State Government for carrying into execution of the provisions of the
proposed legislation and such directions shall be binding.
<< 177 >>

45
Clause 65 of the Bill seeks to provide that the provisions of the proposed legislation
shall not effect the provisions of the Mahatma Gandhi National Rural Employment Guarantee
Act, 2005 and the Coal Mines Provident Fund and Bonus Schemes Act, 1948, or of any
scheme made there under.
Clause 66 of the Bill seeks to confer power upon the appropriate Government to make
rules. Such powers are of general nature for carrying out the provisions of the proposed
legislation and also the matters on which such rules may be made have been specified.
There is provision for laying the rules, as the case may be, before the Parliament or the State
Legislature.
Clause 67 of the Bill seeks to confer power upon the Central Government to make
provisions published in the Official Gazette and not inconsistent with the provisions of the
proposed legislation for removing the difficulty. Such powers shall not be exercised after
expiry of a period of two years from the commencement of the proposed legislation and
every order published under this clause shall be laid before the each House of Parliament.
Clause 68 of the Bill seeks to provide for repeal of certain enactments, namely, the
Payment of Wages Act, 1936, the Minimum Wages Act, 1948, the Payment of Bonus Act,
1965 and the Equal Remuneration Act, 1976, and saving of things done and action taken
there under.
<< 178 >>

MEMORANDUM REGARDING DELEGATED LEGISLATION
Clause 5 of the Bill provides that no employer shall pay to any employee wages less
than the minimum rate of wages notified by the appropriate Government for the area,
establishment or work as may be specified in the notification.
2. Sub-clause (5) of clause 6 of the Bill provides that the appropriate Government may,
by notification, fix factors by which the minimum wages so fixed be multiplied for different
types of work.
3. Sub-clause (1) of clause 9 of the Bill empowers the Central Government to fix the
national minimum wage, by notification. Proviso to the said clause further provides that
different national minimum wages may be fixed for different States or different geographical
areas.
4. Clause 25 of the Bill exempts the application of the provisions of this Chapter III of
the Bill to Government establishments unless the appropriate Government, by notification,
applies such provisions to any Government establishment specified in the said notification.
5. Sub-clause (1) of clause 45 of the Bill empowers the appropriate Government to
appoint by notification, one or more authorities, not below the rank of a Gazetted officer, to
hear and determine the claims which arises under the provisions of this Bill.
appoint appellate authority having jurisdiction to hear appeals preferred by any person
aggrieved by an order passed by the authority under sub-clause (2) of clause 45.
appoint Facilitators who shall exercise the powers conferred on them under sub-clause (4)
of the said clause throughout the State or such geographical limits assigned to them, in
relation to establishments situated in such State or geographical limits, as the case may be.
8. Sub-clause (2) of clause 51 of the Bill empowers the appropriate Government to lay
down an inspection scheme by notification, which shall also provide for generation of a
web-based inspection schedule.
specify a Gazetted Officer for the purpose of compounding offences in accordance with the
provisions of the said clause.
10. Sub-clause (1) of clause 66 empowers the appropriate Government, subject to the
condition of previous publication, to make rules for carrying out the provisions of the
proposed legislation. Sub-clause (2) specifies the matters in respect of which such rules
may be made. These matters, inter alia, include: (a) the manner of calculating the wages
where such rates are fixed by the hour or by the day or by the month under sub-section (4)
of section 6; (b) the cases and circumstances in which an employee employed for a period
of less than the requisite number of hours constituting a normal working day shall not be
entitled to receive wages for a full normal working day under section 10; (c) the extent to
which, and subject to such conditions, the provisions of sub-section (1) of section 13 shall
apply in relation to certain classes of employees, under sub-section (2) of that section;
(d) the manner of fixation of minimum rate of wages by the hour, by the day or by such a
longer wage period under section 14; (e) manner of deducting loans made from any fund
constituted for the welfare of labour under sub-clause (ii) of clause (f) of sub-section (2) of
section 18; (f) the manner of recovery of excess of amount under sub-section (4) of section
18; (g) the authority to provide approval for imposition of fine under sub-section (1) of
section 19; (h) the manner of exhibition of the acts and omissions to be specified in the
notice under sub-section (2) of section 19; (i) the procedure for the imposition of fines
46
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47
under sub-section (3) of section 19; (j) the form of the register to record all fines and all
realisations thereof under sub-section (8) of section 19; (k) the procedure for making
deductions for absence from duty under sub-section (2) of section 20; (l) the procedure for
making deductions for damage or loss under sub-section (2) of section 21; (m) the form of
the register to record all deductions and all realisations thereof under sub-section (3) of
section 21; (n) conditions for recovery of advance of money given to an employee after the
employment began under clause (b) of section 23; (o) conditions for recovery of advances
of wages to an employee not already earned under clause (c) of section 23; (p) deductions
for recovery of loans and the rate of interest payable thereon under section 24; (q) manner
of regulating the procedure by the Central Advisory Board referred to in sub-section (1) of
section 42 and the State Advisory Board referred to in sub-section (4) of the said section
including that of the committees and sub-committees constituted by the State Advisory
Board under sub-section (10) of section 42; (r) the term of members of the Central Advisory
Board, the State Advisory Board including the committees and sub-committees constituted
by the State Advisory Board under sub-section (11) of section 42; (s) the authority and
manner of depositing with such authority various undisbursed dues in case of death of
employed person under clause (b) of sub-section (1) of section 44; (t) form of a single
application in respect of a number of employees under sub-section (5) of section 45; (u) the
form for making an appeal to the appellate authority by the aggrieved person under sub-
section (1) of section 49; (v) the manner of maintenance of a register by the employer to
maintain the details of persons employed, muster roll, wages and such other details under
sub-section (1) of section 50; (w) the manner of issuing wage slips under sub-section (3) of
section 50; (x) the other powers to be exercised by the Facilitators under sub-section (5) of
section 51; (y) the manner of composition of offence by a Gazetted Officer specified under
sub-section (4) of section 55; and (z) any other matter which is required to be or may be
specified under the proposed legislation.
11. Sub-clause (3) of clause 66 provides that every rule made by the Central Government
is required to be laid before each House of Parliament.
12. Sub-clause (4) of clause 66 provides that every rule made under the said clause is
required to be laid before State Legislature.
13. The matter in respect of which rules may be made are matters of procedure or
administrative detail and it is not practicable to provide for them in the Bill itself. The
delegation of legislative power is, therefore, of a normal character.
<< 180 >>

LOK SABHA
————
BILL
to consolidate and amend the laws relating to wages and bonus and
matters connected therewith or incidental thereto.
————
(Shri Bandaru Dattatreya, Minister of State for Labour and Employment)
GMGIPMRND—1808LS(S3)—07-08-2017.
<< 181 >>

A03
Equivalence of Pay
DFS Office
Memorandum
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A04
Writ Petition
19947/2018
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A05
Writ Petition
21195/2018
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A06
Writ Petition
22161/2018
<< 209 >>

1
BEFORE THE MADURAI BENCH OF MADRAS HIGH COURT

(Special Original Jurisdiction)
W.P.(MD) No. 22161 of 2018
R.Saravanan (M/30),
S/o M.Ramaiah Pillai,
BF3, Aparna Garden,
Velmurugan Nagar, Bye Pass Road,
Madurai – 625 003 …… Petitioner
-Vs-
1. The Secretary,
Indian Banks‟ Association
World Trade Centre, 6th Floor
Centre 1 Building, Cuffe Parade,
Mumbai – 400 005
2. The General Manager,

Canara Bank,
Human Resources Wing
112, J.C.Road, Head Office
Bangalore -560 002
3. The General Secretary

All India Bank Officers‟ Confederation
6th Floor, E-Block, Samriddhi Bhavan,
1, Strand Road,
Kolkata -700 001
4. The Secretary
Department of Financial Services
Ministry of Finance, Government of India
2rd Floor, Jeevan Deep Building, Sansad Marg,
New Delhi – 110 001
5. The General Secretary.

Canara Bank Officers‟ Association
216, Royapettah High Road
Royapettah, Opp: Deccan Plaza Hotel
Chennai – 600 014

Canara Bank, Circle Office,
St.Marys Campus, East Veli St
Madurai - 625 001 ……. Respondents
Page No:
No. corns:
<< 210 >>
2
AFFIDAVIT
I, R.Saravanan, S/o M.Ramaiah Pillai, Hindu, aged 30 years residing at

BF3, Aparna Garden, Velmurugan Nagar, Bye Pass Road, Madurai-625 003,
do hereby solemnly affirm and sincerely state as follows:
1. I am the Petitioner herein and as such I am well acquainted with the facts
of the case.
2. I submit that I am working in the cadre of Junior Management Scale - 1

(J.M.G. Scale 1) at Retail Asset Hub, Madurai in the second respondent‟s
bank and the sixth respondent is the controlling office located at Madurai and
therefore, the Honourable Court has Jurisdiction over the subject matter.
3. It is submitted that the Banks in India have formed their association viz.,
the first respondent and the first respondent‟s function is inter alia to finalise
the common salary structure for the staff working at present as well as the
pension related matters for retired bank employees in all the Banks after
negotiating the same with the representatives of All India Bank Unions.
The first respondent is accountable to the fourth respondent.
4. It is submitted that the third respondent is recognized by the first

respondent as the majority of officers‟ representative body to hold salary
revision negotiations with them as and when due and to mutually finalise the
salary structure for the Bank Officers who are all otherwise called as
Managerial Cadre right from Junior Management Scale - 1 to Senior
Management working in the Banking Industry. As far as wage revision
negotiation with the first respondent is concerned, the fifth respondent
wherein I am a member, is represented by the third respondent.
5. It is submitted that though the Banks in India are under the control of
Reserve Bank as well as The Secretary, Department of Financial Services,
Ministry of Finance, Government of India, the fourth respondent herein and
the bank staff salary structure as well as pension related matters comes under
the final concurrence of the fourth respondent only.
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6. It is submitted that though the salary revision agreement stipulates that

there should be a revision of salary once in 5 years in the Banking industry,
but it has never happened. It is further submitted that the salary revision talks
are stretched for 7 to 8 years and in the resultant salary revision settlement,
retrospective increase shall be given for the salary components for the serving
officers as well as for pension to the retirees.
7. It is submitted that as the 11th salary revision in Banking Industry is due

since 1-11-2017 and that The General Secretary, All India Bank Officers‟
Confederation submitted the charter of demands for salary revision for
officers working in Banking Industry as well as the pension revision to the
Secretary, Indian Banks Association, the first respondent herein and that the
salary and the pension revision negotiations are going on at a snail‟s pace.
8. It is submitted that the 7th Central Pay Commission, hereinafter referred

to as C.P.C. recommendations were implemented since the year 2016 for the
Central Government employees. It is submitted that the 7th Central Pay
Commission scientifically formulated the bench mark for National Minimum
Wages as well as the minimum pension right from the entry level lowest
cadre to Cabinet Secretary level which includes various stages and cadres by
rightly taking into account the recommendations of International Labour
Organisation, hereinafter referred to as I.L.O Minimum Wage Fixing
Convention, 1970 (No.131). It is submitted that the I.L.O. convention
stipulated that minimum wage is one that is payable to a person employed
in respect of his employment or of work done in such employment, but not
related to the profit or paying capacity of the Institutions.
9. It is submitted that the benchmark National Minimum Wage structure

as well as pension for each cadre is declared in the 7th C.P.C. by discarding
the paying capacity of the employer or the load factor on the wage bill. It is
further submitted that the salary as well as the pension structure is intended to
meet the basic needs of an employee so as to lead a decent life matching to
the status being enjoyed by every employee in their respective institution.
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4
10. It is submitted that the 7th C.P.C. formula was also adopted by the State
Government of Tamilnadu for their employees. It is further submitted that the
7th C.P.C. formed the benchmark for fixation of pay as well as pension for
employees in other Government and Public Sectors also. As per the 7th
C.P.C., the minimum pay for Grade - A Officers in Government service is at
Rs.57,100. It is by adopting this official cadre‟s minimum starting pay,
University Grants Commission has also fixed the minimum starting pay for
their official cadre viz., Assistant Professors at Rs.57,700.
11. It is submitted that the present wage revision negotiations in Banks are
being held after the implementation of 7th C.P.C. to the Central and State
Government employees and therefore it naturally follows that the banking
industry ought not to be an exception and excluded from taking into account
the 7th C.P.C. formula in fixing the officers starting minimum pay and
minimum pension as well for retired officers. It is further submitted that in all
fairness, The General Secretary, All India Bank Officers‟ Confederation, the
third respondent herein submitted the salary revision as well as pension
updation demand to the First respondent on the lines of 7th C.P.C. formula
and that the salary revision talks are inconclusive till date.
12. It is submitted that the first respondent is putting forth salary revision
proposals basing on the universally discarded paying capacity instead of
following the prevailing the minimum wage formula scientifically evolved
by the 7th C.P.C., which ensures a minimum wages for serving employees
and pension for retirees intended to lead a decent life at any point of time
matching to their status in their respective institutions.
13. It is submitted that the necessity to fix equivalence of posts with regard
to their salary drawn in Government Sector and other Public Sector
Undertakings, has arisen due to the upward revision of salary on account of
7th C.P.C., implementation. It is submitted that the Union Cabinet, therefore,
in their considered decision of fixing income standards, notified equivalence
of posts by grouping together Junior Management Grade Scale I (J.M.G.-
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5
Scale 1) in public sector banks and Insurance sector with that of the Group
“A” in the Government of India.
14. It is submitted that from the Union Cabinet‟s notification, it is clear that
both J.M.G.Scale 1 in Public Sector Banks and Insurance Sector and those in
Group “A” in Government of India are equal with regard to their pay and
status and therefore the Government decided them to fall under creamy
layer for OBC reservation.
15. It is submitted that as consequence of the Cabinet‟s decision, the 4th

respondent who is the controlling authority for the first respondent has
therefore directed the first respondent that the Junior Management Scale -1 of
Public Sector Banks as well as Insurance sector will be treated as equivalent
to Group „A‟ in Government of India in the matter of their pay and income
vide their notification letter No.19/4/2017 – Welfare, Government of India
Ministry of Finance, Department of Financial Services dated 6-12-2017. The
said notification was specifically addressed to the first respondent as the 7th
addressee.
16. It is further submitted that therefore the Union Government notification

of putting together both the Group “A” Government Service and the J.M.G.-
Scale 1 in Banks as equivalent posts in respect of their pay follows that the
minimum pay for both the cadres shall not be unequal.
17. It is submitted that by taking into account the 7th C.P.C. pay when there
is equivalence of Bank cadre is notified, obviously in all fairness there ought
to be equivalence of minimum pay on the lines of 7th C.P.C. for serving Bank
employees. It is further submitted that as a consequence there ought to be
pension updation as per the 7 the C.P.C. formula of 2.57 times increase in
pension or 50% of the revised minimum pay whichever is beneficial to the
pensioners. It is therefore submitted that as per the 7th C.P.C. when the
minimum pay for Grade-A officers in Government service is Rs.57,100/-, the
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6
minimum pay for J.M.G.-Scale-1 ought to be equal to Rs.57,100/- or more

than that and the consequent fixing of 50 % pension on that minimum pay
to all pensioners.
18. It is submitted that the third respondent, as the apex body of the 5th
respondent therefore submitted to the first respondent, the charter of demands
for the current wage revision of 11th bi-partite settlement by putting forth the
starting 7th C.P.C. minimum pay of Grade-A officers in Government service
as the starting minimum pay for J.M.G.-Scale 1 at Rs. 57,100/.- and that this
demand is only in conformity with the 7th C.P.C. recommendations being
widely adopted as the bench mark for salary structure by other Government
sectors. This demand is also incompliance of the Union cabinet‟s
notification of categorizing the J.M.G. Scale -1, as the equivalent cadre for
Group “A” officers in Government service.
19. It is submitted that the first respondent after having acquiesced with the
fourth respondent‟s directive Notification No 19/4/2017 -Welfare dated
06.12.2017 received by them and did not express any contrarian stand to that
notification for more than a year thereby leaving an impression that
equivalence of pay structure would be implemented in Banks. The first
respondent‟s not taking any contrarian stand has left an impression to one
and all that the first respondent is inclined to adopt the Group A pay in
Govt. Sector as per the 7th C.P.C., as the equivalent minimum starting pay for
Bank J.M.G. Scale 1 officers.
20. It is further submitted that of late, to the surprise and shock of the
petitioner, the first respondent is very much recalcitrant to obey and
implement the Equivalence of Post, and hence their pay equivalent
Notification of Union Cabinet. The first respondent is unwilling to adopt a
uniform minimum equivalence of pay structure for both Bank staff and those
in Group A in the Government of India. Though first respondent‟s
equivalence pay notification was addressed to the fourth respondent, the first
respondent is closing their eyes in the matter of implementing equivalence
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7
pay for J.M.G.-Scale 1 with that of the Group “A” officers in Government
service that was notified by the Union Cabinet. It is further submitted that
instead, the first respondent intends to impose an unrealistic relativity load
factor for officers‟ pay structure much to the detrimental of serving and to
the retired Bank officers and contrary to fourth respondent‟s notification. It
is further submitted that the first respondent is also in a hurry to impose their
unrealistic relativity load factor by completely rejecting the 7th C.P.C.
formula which ought to be the basis for fixation of minimum pay for
equivalent post and which is having its National acceptance in other
Government and Public Sector undertakings for fixation of minimum scale in
their respective cadre and minimum pension as well.
21. It is submitted that as the first respondent‟s actions are much to the
detriment of OBC candidates and as it is violative of Article 14 of the
Constitution of India and hence one serving J.M.G.-Scale 1 officer belonging
to O.B.C., has moved before this Hon‟ble Court in W.P.(M.D.) 19947 of
2018 praying for a direction to the First Respondent to implement the
minimum starting pay of Group“ A “ officers in Govt. Service as the
minimum starting pay for J.M.G- Scale 1 in banks by taking into account
the Union Cabinet Decisions notified vide their letter No.19/4/2017 and the
Hon‟ble Court was pleased to Admit and order notice on 25-9-2018 and
posted the matter on 16-11-2018.
22. It is submitted that though the Equivalence of Post and hence their pay,
notification of the fourth respondent to the first respondent is for OBC –
J.M.G.-scale-1 officers, there is no disparity or discrimination in the pay
structure and the consequent Pension for OBC and Non-OBC officers. So,
what is applicable to OBC-J.M.G.Scale-1 is equally applicable to everyone
including the non-OBC petitioner. It is further submitted that everyone
including the petitioner is adversely affected in the event of non-
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8
implementation of equivalence of post and hence their pay, notification by

the fourth Respondent to the first respondent.
23. It is submitted that since the admittance and notice of the W.P .(M.D.)
19947 of 2018, to the first respondent, at the instance of the first
respondent, salary revision negotiations were held on 29-09-2018 and on
12-10-2018. In that negotiations, the fifth respondent representing officers
employed at second respondent including the petitioner is represented in the
negotiations by the third respondent. It is to every ones knowledge that the
first respondent is determined to finalise the settlement much to the
determinant of both serving and retired bank officers
24. It is submitted that by not implementing the equivalence of Pay matching

with the 7th C.P.C. minimum pay fixed for each cadre, if the first
respondent is allowed to proceed to fix the pay, it shall in turn impose an
unrealistic and discarded relativity Load norms thereby putting into cold
storage the Union Cabinet decisions on equating the J.M.G.-Scale-1 pay with
that of the Group -A officers in Govt. Sector much to the detrimental of
entire J.M.G. Scale – 1 and above including the non OBC Officers and hence
I am left with no other alternative remedy except to seek the protection of
this Hon‟ble Court under Article 226 of the Constitution of India on the
following among other:-
GROUNDS
1. The first respondent being an organ of State has to ensure Equality before
the Law by accepting the 7th C.P.C. recommendation formula as the basis
for pay revision for Bank Officer‟s and to fix the minimum scale
corresponding to the equivalent cadre as per the 7th C.P.C., as is being
done in the case of other instrumentalities of State including in the U.G.C.,
and the consequent revision of pension.
2. The decision of Union Cabinet is conclusive and is unequivocally binding

upon the first respondent. When the Union Cabinet has equated the pay
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9
status of J.M.G.-1 with that of the Group “A” officers in Government

service, the first respondent ought to have implemented the starting
minimum pay of Group “A” officers in Government Service as per the 7th
C.P.C. as the minimum pay for J.M.G.-1 as well as for the pension.
3. The first respondent, after having acquiesced with the fourth respondent‟s
Equivalence of Pay notification and remained quiet for more than an year
ought not to act in total derogation of the notification by choosing not to
implement the Union Cabinet decisions.
4. The first respondent in their defiance is unilaterally acting as a body

superior to that of the Union Cabinet itself and therefore any decision
contrary to the Union Cabinet notification by not equating the starting
pay of J.M.G.-Scale 1 with that of Group “A” officers in Government
service and denial of the consequent pension revision is arbitrary,
against natural justice besides unconstitutional.
5. The first respondent, by not equating J.M.G. Scale -1 with that of the
Group “A” officers in Government service, cannot and ought not to act in
derogation of the income equivalence declared and notified by the Union
Cabinet. The first respondent ought not to abrogate and impinge the Union
Cabinet‟s decision on equivalence of income notified by classifying the
posts. Any decision of the first respondent not in conformity with the
classification notified by Union Cabinet‟s is arbitrary, illegal and un-
constitutional.
6. The first respondent, by unilaterally imposing the load factor in salary

revision negotiations is acting in contravention of the I.L.O. convention
which stipulated that minimum wage is one that is payable to a person
employed in respect of his employment or of work done in such
employment, but not related to the profit or paying capacity of the
Institutions. The first respondent‟s unfounded action of imposing load
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10
factor, paying capacity etc, are violative of the Union Cabinet‟s

equivalence of pay notification and contrary to the I.L.O convention and
therefore arbitrary and unsustainable in the eyes of law.
7. The first respondent‟s obstinacy of imposing load factor, paying capacity is

contrary to the benchmark National Minimum Wage structure as well as
pension for each cadre that is declared in the 7th C.P.C. by discarding the
paying capacity of the employer or the load factor on the wage bill.
8. The officers of the Banking industry that starts from the cadre of JMG
scale -1 and above will be permanently deprived of their statutory
benefits as the first respondent is not placing the JMG Scale -1 on par with
Group “A “officers of the Government in the matter of fixing their
minimum scale of pay and the consequent pension as notified by the
Union Government, which is unconstitutional.
9. More so, when the Dearness Allowance pattern and Gratuity are uniform
for both Government and the Bank staff and to bring about uniformity
when the Government has come out with a notification of equivalence of
pay, the first respondent ought to have worked out the equivalence of pay
structure and ought to have implemented. The inaction of non fixation of
J.M.G.-1 minimum scale as equivalent to Group “A” on the lines of
equivalence pay Government Notification would cause permanent
inequality in pay as well as pension for Bank staff as it violates Article 14
and 21 of the Constitution.
10. In any event, the first respondent is statutorily duty bound to keep the pay
relativity as well as pension in conformity with the Union Cabinet
decisions by equating the starting minimum pay of J.M.G.Scale 1 in banks
with that of the starting minimum pay fixed for Group “A” officers in
Govt. Service as per 7th C.P.C. and accordingly the consequential revision
of pension and ought not to impose their arbitrary load factor under the
premise of paying capacity.
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11
In the circumstances stated above, it is prayed that this Hon'ble Court may
be pleased to issue a writ of Mandamus or order or direction in the nature
of Writ directing the First Respondent to implement the minimum starting
pay of Group“ A “ officers in Govt. Service as the minimum starting pay for
all J.M.G- Scale 1 Officers in banks by taking into account the Union Cabinet
Decisions notified vide their letter No.19/4/2017 – Welfare, Government Of
India, Ministry of Finance, Department of Financial Services dated 6-12-
2017 and the consequential revision of pension in accordance with the 7th
C.P.C. formula and pass such other order or orders as this Hon‟ble Court may
deem fit and proper in the circumstances of the case and thus render Justice.
Solemnly affirmed at Madurai

on this 27th day of October
and signed his name in my presence. BEFORE ME,
Advocate, Madurai.
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<< 220 >>
A07
Code on Wages Act
2019
<< 221 >>

jftLVªh lañ Mhñ ,yñ—(,u)04@0007@2003—19 REGISTERED NO. DL—(N)04/0007/2003—19
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EXTRAORDINARY
Hkkx II — [k.M 1
PART II — Section 1
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PUBLISHED BY AUTHORITY
lañ 48] ubZ fnYyh] c`gLifrokj] vxLr 8] 2019@ Jko.k 17] 1941 ¼'kd½
No. 48] NEW DELHI, THURSDAY, AUGUST 8, 2019/SHRAVANA 17, 1941 (SAKA)
bl Hkkx esa fHkUu i`"B la[;k nh tkrh gS ftlls fd ;g vyx ladyu ds :i esa j[kk tk ldsA
Separate paging is given to this Part in order that it may be filed as a separate compilation.
MINISTRY OF LAW AND JUSTICE

(Legislative Department)
New Delhi, the 8th August, 2019/Shravana 17, 1941 (Saka)
The following Act of Parliament received the assent of the President on the
8th August, 2019, and is hereby published for general information:—

NO. 29 OF 2019
[8th August, 2019.]
An Act to amend and consolidate the laws relating to wages and bonus and matters
connected therewith or incidental thereto.
BE it enacted by Parliament in the Seventieth Year of the Republic of India as follows:—
CHAPTER I
PRELIMINARY
1. (1) This Act may be called the Code on Wages, 2019. Short title,
extent and
(2) It extends to the whole of India. commencement.
(3) It shall come into force on such date as the Central Government may, by notification
in the Official Gazette appoint; and different dates may be appointed for different provisions
of this Code and any reference in any such provision to the commencement of this Code
shall be construed as a reference to the coming into force of that provision.
<< 222 >>

2 THE GAZETTE OF INDIA EXTRAORDINARY [PART II—
Definitions. 2. In this Code, unless the context otherwise requires,––

(a) "accounting year" means the year commencing on the 1st day of April ;
(b) "Advisory Board" means the Central Advisory Board or, as the case may be,
the State Advisory Board, constituted under section 42;
(c) "agricultural income tax law" means any law for the time being in force relating
to the levy of tax on agricultural income;
(d) "appropriate Government" means,––
(i) in relation to, an establishment carried on by or under the authority of
the Central Government or the establishment of railways, mines, oil field, major
ports, air transport service, telecommunication, banking and insurance company
or a corporation or other authority established by a Central Act or a central
public sector undertaking or subsidiary companies set up by central public
sector undertakings or autonomous bodies owned or controlled by the Central
Government, including establishment of contractors for the purposes of such
establishment, corporation or other authority, central public sector undertakings,
subsidiary companies or autonomous bodies, as the case may be, the Central
Government;
(ii) in relation to any other establishment, the State Government;
(e) "company" means a company as defined in clause (20) of section 2 of the
Companies Act, 2013; 18 of 2013.
(f) "contractor", in relation to an establishment, means a person, who —

(i) undertakes to produce a given result for the establishment, other than
a mere supply of goods or articles of manufacture to such establishment, through
contract labour; or
(ii) supplies contract labour for any work of the establishment as mere
human resource and includes a sub-contractor;
(g) "contract labour" means a worker who shall be deemed to be employed in or
in connection with the work of an establishment when he is hired in or in connection
with such work by or through a contractor, with or without the knowledge of the
principal employer and includes inter-State migrant worker but does not include a
worker (other than part-time employee) who ––
(i) is regularly employed by the contractor for any activity of his
establishment and his employment is governed by mutually accepted standards
of the conditions of employment (including engagement on permanent basis),
and
(ii) gets periodical increment in the pay, social security coverage and
other welfare benefits in accordance with the law for the time being in force in
such employment;
(h) "co-operative society" means a society registered or deemed to be registered
under the Co-operative Societies Act, 1912, or any other law for the time being in force 2 of 1912.
relating to co-operative societies in any State;
(i) "corporation" means any body corporate established by or under any Central
Act, or State Act, but does not include a company or a co-operative society;
(j) "direct tax" means––
(i) any tax chargeable under the––
(A) Income-tax Act, 1961; 43 of 1961.
<< 223 >>

SEC. 1] THE GAZETTE OF INDIA EXTRAORDINARY 3
7 of 1964. (B) Companies (Profits) Surtax Act, 1964;

(C) Agricultural income tax law; and
(ii) any other tax which, having regard to its nature or incidence, may be
declared by the Central Government, by notification, to be a direct tax for the
purposes of this Code;
(k) "employee" means, any person (other than an apprentice engaged under the
52 of 1961. Apprentices Act, 1961), employed on wages by an establishment to do any skilled,
semi-skilled or unskilled, manual, operational, supervisory, managerial, administrative,
technical or clerical work for hire or reward, whether the terms of employment be
express or implied, and also includes a person declared to be an employee by the
appropriate Government, but does not include any member of the Armed Forces of the
Union;
(l) "employer" means a person who employs, whether directly or through any
person, or on his behalf or on behalf of any person, one or more employees in his
establishment and where the establishment is carried on by any department of the
Central Government or the State Government, the authority specified, by the head of
such department, in this behalf or where no authority, is so specified the head of the
department and in relation to an establishment carried on by a local authority, the chief
executive of that authority, and includes,—
(i) in relation to an establishment which is a factory, the occupier of the
63 of 1948. factory as defined in clause (n) of section 2 of the Factories Act, 1948 and, where
a person has been named as a manager of the factory under clause (f) of
sub-section (1) of section 7 of the said Act, the person so named;
(ii) in relation to any other establishment, the person who, or the authority
which, has ultimate control over the affairs of the establishment and where the
said affairs is entrusted to a manager or managing director, such manager or
managing director;
(iii) contractor; and
(iv) legal representative of a deceased employer;
(m) "establishment" means any place where any industry, trade, business,
manufacture or occupation is carried on and includes Government establishment;
(n) "factory" means a factory as defined in clause (m) of section 2 of the Factories
63 of 1948. Act, 1948;
(o) "Government establishment" means any office or department of the
Government or a local authority;
43 of 1961. (p) "Income-tax Act" means the Income -tax Act, 1961;
(q) "industrial dispute" means,—
(i) any dispute or difference between employers and employers, or between
employers and workers or between workers and workers which is connected
with the employment or non-employment or the terms of employment or with the
conditions of labour, of any person; and
(ii) any dispute or difference between an individual worker and an employer
connected with, or arising out of, discharge, dismissal, retrenchment or
termination of such worker;
(r) "Inspector-cum-Facilitator" means a person appointed by the appropriate
Government under sub-section (1) of section 51;
(s) "minimum wage" means the wage fixed under section 6;
<< 224 >>

(t) "notification" means a notification published in the Gazette of India or in

the Official Gazette of a State, as the case may be, and the expression "notify" with its
grammatical variations and cognate expressions shall be construed accordingly;
(u) "prescribed" means prescribed by rules made by the appropriate Government;
(v) "same work or work of a similar nature" means work in respect of which the
skill, effort, experience and responsibility required are the same, when performed under
similar working conditions by employees and the difference if any, between the skill,
effort, experience and responsibility required for employees of any gender, are not of
practical importance in relation to the terms and conditions of employment;
(w) "State" includes a Union territory;
(x) "Tribunal" shall have the same meaning as assigned to it in clause (r) of
section 2 of the Industrial Disputes Act, 1947; 14 of 1947.
(y) "wages" means all remuneration whether by way of salaries, allowances or

otherwise, expressed in terms of money or capable of being so expressed which would, 42 of 2005.
if the terms of employment, express or implied, were fulfilled, be payable to a person
employed in respect of his employment or of work done in such employment, and
includes,—
(i) basic pay;
(ii) dearness allowance; and
(iii) retaining allowance, if any,
but does not include––
(a) any bonus payable under any law for the time being in force, which
does not form part of the remuneration payable under the terms of employment;
(b) the value of any house-accommodation, or of the supply of light,
water, medical attendance or other amenity or of any service excluded from the
computation of wages by a general or special order of the appropriate
Government;
(c) any contribution paid by the employer to any pension or provident
fund, and the interest which may have accrued thereon;
(d) any conveyance allowance or the value of any travelling concession;
(e) any sum paid to the employed person to defray special expenses entailed
on him by the nature of his employment;
(f) house rent allowance;
(g) remuneration payable under any award or settlement between the
parties or order of a court or Tribunal;
(h) any overtime allowance;
(i) any commission payable to the employee;
(j) any gratuity payable on the termination of employment;
(k) any retrenchment compensation or other retirement benefit payable to
the employee or any ex gratia payment made to him on the termination of
employment:
Provided that, for calculating the wages under this clause, if payments
made by the employer to the employee under clauses (a) to (i) exceeds one-half,
or such other per cent. as may be notified by the Central Government, of the all
remuneration calculated under this clause, the amount which exceeds such
<< 225 >>

one-half, or the per cent. so notified, shall be deemed as remuneration and shall
be accordingly added in wages under this clause:
Provided further that for the purpose of equal wages to all genders and for
the purpose of payment of wages, the emoluments specified in clauses (d), (f),
(g) and (h) shall be taken for computation of wage.
Explanation.––Where an employee is given in lieu of the whole or part of
the wages payable to him, any remuneration in kind by his employer, the value of
such remuneration in kind which does not exceed fifteen per cent. of the total
wages payable to him, shall be deemed to form part of the wages of such employee;
(z) "worker" means any person (except an apprentice as defined under
52 of 1961. clause (aa) of section 2 of the Apprentices Act, 1961) employed in any industry to do
any manual, unskilled, skilled, technical, operational, clerical or supervisory work for
hire or reward, whether the terms of employment be express or implied, and includes —
(i) working journalists as defined in clause (f ) of section 2 of the Working
Journalists and other Newspaper Employees (Conditions of Service) and
45 of 1955. Miscellaneous Provisions Act, 1955; and
(ii) sales promotion employees as defined in clause (d) of section 2 of the
11 of 1976. Sales Promotion Employees (Conditions of Service) Act, 1976, and for the
purposes of any proceeding under this Code in relation to an industrial dispute,
includes any such person who has been dismissed, discharged or retrenched or
otherwise terminated in connection with, or as a consequence of, that dispute,
or whose dismissal, discharge or retrenchment has led to that dispute,
but does not include any such person––
45 of 1950. (a) who is subject to the Air Force Act, 1950, or the Army Act, 1950, or the
46 of 1950. Navy Act, 1957; or
62 of 1957.
(b) who is employed in the police service or as an officer or other employee
of a prison; or
(c) who is employed mainly in a managerial or administrative capacity; or
(d) who is employed in a supervisory capacity drawing wage of exceeding
fifteen thousand rupees per month or an amount as may be notified by the
Central Government from time to time.
3. (1) There shall be no discrimination in an establishment or any unit thereof among Prohibition of
employees on the ground of gender in matters relating to wages by the same employer, in discrimination
on ground of
respect of the same work or work of a similar nature done by any employee. gender.
(2) No employer shall,—

(i) for the purposes of complying with the provisions of sub-section (1), reduce
the rate of wages of any employee; and
(ii) make any discrimination on the ground of sex while recruiting any employee
for the same work or work of similar nature and in the conditions of employment, except
where the employment of women in such work is prohibited or restricted by or under
any law for the time being in force.
4. Where there is any dispute as to whether a work is of same or similar nature for the Decision as to
disputes with
purposes of section 3, the dispute shall be decided by such authority as may be notified by regard to same
the appropriate Government. or similar nature
of work.
<< 226 >>

CHAPTER II
MINIMUM WAGES
Payment of 5. No employer shall pay to any employee wages less than the minimum rate of wages
minimum rate notified by the appropriate Government.
of wages.
Fixation of 6. (1) Subject to the provisions of section 9, the appropriate Government shall fix the
minimum minimum rate of wages payable to employees in accordance with the provisions of section 8.
wages.
(2) For the purposes of sub-section (1), the appropriate Government shall fix a minimum
rate of wages––
(a) for time work; or
(b) for piece work.
(3) Where employees are employed on piece work, for the purpose of sub-section (1),
the appropriate Government shall fix a minimum rate of wages for securing such employees
a minimum rate of wages on a time work basis.
(4) The minimum rate of wages on time work basis may be fixed in accordance with any
one or more of the following wage periods, namely:––
(i) by the hour; or
(ii) by the day; or
(iii) by the month.
(5) Where the rates of wages are fixed by the hour or by the day or by the month, the
manner of calculating the wages shall be such, as may be prescribed.
(6) For the purpose of fixation of minimum rate of wages under this section, the
appropriate Government,—
(a) shall primarily take into account the skill of workers required for working
under the categories of unskilled, skilled, semi-skilled and highly-skilled or geographical
area or both; and
(b) may, in addition to such minimum rate of wages for certain category of
workers, take into account their arduousness of work like temperature or humidity
normally difficult to bear, hazardous occupations or processes or underground work
as may be prescribed by that Government; and
(c) the norms of such fixation of minimum rate of wages shall be such as may be
prescribed.
(7) The number of minimum rates of wages referred to in sub-section (6) may, as far as
possible, be kept at minimum by the appropriate Government.
Components 7. (1) Any minimum rate of wages fixed or revised by the appropriate Government
of minimum under section 8 may consist of––
wages.
(a) a basic rate of wages and an allowance at a rate to be adjusted, at such
intervals and in such manner as the appropriate Government may direct, to accord as
nearly as practicable with the variation in the cost of living index number applicable to
such workers (hereinafter referred to as "cost of living allowance"); or
(b) a basic rate of wages with or without the cost of living allowance, and the
cash value of the concessions in respect of supplies of essential commodities at
concession rates, where so authorised; or
(c) an all-inclusive rate allowing for the basic rate, the cost of living allowance
and the cash value of the concessions, if any.
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(2) The cost of living allowance and the cash value of the concessions in respect of
supplies of essential commodities at concession rate shall be computed by such authority,
as the appropriate Government may by notification, appoint, at such intervals and in
accordance with such directions as may be specified or given by the appropriate Government
from time to time.
8. (1) In fixing minimum rates of wages for the first time or in revising minimum rates of Procedure for
wages under this Code, the appropriate Government shall either — fixing and
revising
(a) appoint as many committees as it considers necessary to hold enquiries and minimum
wages.
recommend in respect of such fixation or revision, as the case may be; or
(b) by notification publish its proposals for the information of persons likely to
be affected thereby and specify a date not less than two months from the date of the
notification on which the proposals shall be taken into consideration.
(2) Every committee appointed by the appropriate Government under clause (a) of
sub-section (1) shall consist of persons––
committee.
(3) After considering the recommendation of the committee appointed under clause (a)
of sub-section (1) or, as the case may be, all representations received by it before the date
specified in the notification under clause (b) of that sub-section, the appropriate Government
shall by notification fix, or as the case may be, revise the minimum rates of wages and unless
such notification otherwise provides, it shall come into force on the expiry of three months
from the date of its issue:
Provided that where the appropriate Government proposes to revise the minimum
rates of wages in the manner specified in clause (b) of sub-section (1), it shall also consult
concerned Advisory Board constituted under section 42.
(4) The appropriate Government shall review or revise minimum rates of wages ordinarily
at an interval not exceeding five years.
9. (1) The Central Government shall fix floor wage taking into account minimum living Power of
standards of a worker in such manner as may be prescribed: Central
Government
Provided that different floor wage may be fixed for different geographical areas. to fix floor
wage.
(2) The minimum rates of wages fixed by the appropriate Government under section 6
shall not be less than the floor wage and if the minimum rates of wages fixed by the appropriate
Government earlier is more than the floor wage, then, the appropriate Government shall not
reduce such minimum rates of wages fixed by it earlier.
(3) The Central Government may, before fixing the floor wage under sub-section (1),
obtain the advice of the Central Advisory Board constituted under sub-section (1) of
section 42 and consult State Governments in such manner as may be prescribed.
10. If an employee whose minimum rate of wages has been fixed under this Code by the Wages of
day works on any day on which he was employed for a period of less than the requisite employee who
works for less
number of hours constituting a normal working day, he shall, save as otherwise hereinafter than normal
provided, be entitled to receive wages in respect of work done on that day, as if he had working day.
worked for a full normal working day:
Provided that he shall not be entitled to receive wages for a full normal working day,—
(i) in any case where his failure to work is caused by his unwillingness to work
and not by the omission of the employer to provide him with work; and
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(ii) in such other cases and circumstances, as may be prescribed.

Wages for 11. Where an employee does two or more classes of work to each of which a different
two or more minimum rate of wages is applicable, the employer shall pay to such employee in respect of
classes of
work.
the time respectively occupied in each such class of work, wages at not less than the
minimum rate in force in respect of each such class.
Minimum 12. Where a person is employed on piece work for which minimum time rate and not a
time rate minimum piece rate has been fixed under this Code, the employer shall pay to such person
wages for
piece work.
wages at not less than the minimum time rate.
Fixing hours 13. (1) Where the minimum rates of wages have been fixed under this Code, the
of work for appropriate Government may —
normal
working day. (a) fix the number of hours of work which shall constitute a normal working day
inclusive of one or more specified intervals;
(b) provide for a day of rest in every period of seven days which shall be allowed
to all employees or to any specified class of employees and for the payment of
remuneration in respect of such days of rest;
(c) provide for payment for work on a day of rest at a rate not less than the
overtime rate.
(2) The provisions of sub-section (1) shall, in relation to the following classes of
employees apply, only to such extent and subject to such conditions as may be prescribed,
namely:—
(a) employees engaged in any emergency which could not have been foreseen
or prevented;
(b) employees engaged in work of the nature of preparatory or complementary
work which must necessarily be carried on outside the limits laid down for the general
working in the employment concerned;
(c) employees whose employment is essentially intermittent;
(d) employees engaged in any work which for technical reasons has to be
completed before the duty is over; and
(e) employees engaged in a work which could not be carried on except at times
dependent on the irregular action of natural forces.
(3) For the purposes of clause (c) of sub-section (2), employment of an employee is
essentially intermittent when it is declared to be so by the appropriate Government on the
ground that the daily hours of duty of the employee, or if there be no daily hours of duty as
such for the employee, the hours of duty normally include periods of inaction during which
the employee may be on duty but is not called upon to display either physical activity or
sustained attention.
Wages for 14. Where an employee whose minimum rate of wages has been fixed under this Code
overtime by the hour, by the day or by such a longer wage-period as may be prescribed, works on any
work.
day in excess of the number of hours constituting a normal working day, the employer shall
pay him for every hour or for part of an hour so worked in excess, at the overtime rate which
shall not be less than twice the normal rate of wages.
CHAPTER III
PAYMENT OF WAGES
Mode of 15. All wages shall be paid in current coin or currency notes or by cheque or by
payment of crediting the wages in the bank account of the employee or by the electronic mode:
wages.
<< 229 >>

Provided that the appropriate Government may, by notification, specify the industrial
or other establishment, the employer of which shall pay to every person employed in such
industrial or other establishment, the wages only by cheque or by crediting the wages in his
bank account.
16. The employer shall fix the wage period for employees either as daily or weekly or Fixation of
fortnightly or monthly subject to the condition that no wage period in respect of any employee wage period.
shall be more than a month:
Provided that different wage periods may be fixed for different establishments.
17. (1) The employer shall pay or cause to be paid wages to the employees, engaged Time limit for
on — payment of
wages.
(i) daily basis, at the end of the shift;
(ii) weekly basis, on the last working day of the week, that is to say, before the
weekly holiday;
(iii) fortnightly basis, before the end of the second day after the end of the
fortnight;
(iv) monthly basis, before the expiry of the seventh day of the succeeding
month.
(2) Where an employee has been—
(i) removed or dismissed from service; or
(ii) retrenched or has resigned from service, or became unemployed due to
closure of the establishment,
the wages payable to him shall be paid within two working days of his removal, dismissal,
retrenchment or, as the case may be, his resignation.
(3) Notwithstanding anything contained in sub-section (1) or sub-section (2), the
appropriate Government may, provide any other time limit for payment of wages where it
considers reasonable having regard to the circumstances under which the wages are to be
paid.
(4) Nothing contained in sub-section (1) or sub-section (2) shall affect any time limit
for payment of wages provided in any other law for the time being in force.
18. (1) Notwithstanding anything contained in any other law for the time being in Deductions
force, there shall be no deductions from the wages of the employee, except those as are which may be
made from
authorised under this Code. wages.
Explanation.––For the purposes of this sub-section,—
(a) any payment made by an employee to the employer or his agent shall be
deemed to be a deduction from his wages;
(b) any loss of wages to an employee, for a good and sufficient cause, resulting
from—
(i) the withholding of increment or promotion, including the stoppage of
an increment; or
(ii) the reduction to a lower post or time-scale; or
(iii) the suspension,
shall not be deemed to be a deduction from wages in a case where the provisions made
by the employer for such purposes are satisfying the requirements specified in the
notification issued by the appropriate Government in this behalf.
<< 230 >>

(2) Deductions from the wages of an employee shall be made in accordance with the
provisions of this Code, and may be made only for the following purposes, namely:—
(a) fines imposed on him;
(b) deductions for his absence from duty;
(c) deductions for damage to or loss of goods expressly entrusted to the employee
for custody; or for loss of money for which he is required to account, where such
damage or loss is directly attributable to his neglect or default;
(d) deductions for house-accommodation supplied by the employer or by
appropriate Government or any housing board set up under any law for the time being
in force, whether the Government or such board is the employer or not, or any other
authority engaged in the business of subsidising house-accommodation which may
be specified in this behalf by the appropriate Government by notification;
(e) deductions for such amenities and services supplied by the employer as the
appropriate Government or any officer specified by it in this behalf may, by general or
special order, authorise and such deduction shall not exceed an amount equivalent to
the value of such amenities and services.
Explanation.––For the purposes of this clause, the expression "services" does
not include the supply of tools and raw materials required for the purposes of
employment;
(f) deductions for recovery of —
(i) advances of whatever nature (including advances for travelling
allowance or conveyance allowance), and the interest due in respect thereof, or
for adjustment of overpayment of wages;
(ii) loans made from any fund constituted for the welfare of labour, as may
be prescribed by the appropriate Government, and the interest due in respect
thereof;
(g) deductions for recovery of loans granted for house-building or other purposes
approved by the appropriate Government and the interest due in respect thereof;
(h) deductions of income-tax or any other statutory levy levied by the Central
Government or State Government and payable by the employee or deductions required
to be made by order of a court or other authority competent to make such order;
(i) deductions for subscription to, and for repayment of advances from any
social security fund or scheme constituted by law including provident fund or pension
fund or health insurance scheme or fund known by any other name;
(j) deductions for payment of co-operative society subject to such conditions
as the appropriate Government may impose;
(k) deductions made, with the written authorisation of the employee, for payment
of the fees and contribution payable by him for the membership of any Trade Union
registered under the Trade Unions Act, 1926; 16 of 1926.
(l) deductions for recovery of losses sustained by the railway administration

on account of acceptance by the employee of counterfeit or base coins or mutilated or
forged currency notes;
(m) deductions for recovery of losses sustained by the railway administration
on account of the failure of the employee to invoice, to bill, to collect or to account for
the appropriate charges due to the railway administration whether in respect of fares,
freight, demurrage, wharfage and cranage or in respect of sale of food in catering
establishments or in respect of commodities in grain shops or otherwise;
<< 231 >>

(n) deductions for recovery of losses sustained by the railway administration on

account of any rebates or refunds incorrectly granted by the employee where such
loss is directly attributable to his neglect or default;
(o) deductions, made with the written authorisation of the employee, for
contribution to the Prime Minister’s National Relief Fund or to such other fund as the
Central Government may, by notification, specify.
(3) Notwithstanding anything contained in this Code and subject to the provisions of
any other law for the time being in force, the total amount of deductions which may be made
under sub-section (2) in any wage period from the wages of an employee shall not exceed
fifty per cent. of such wages.
(4) Where the total deductions authorised under sub-section (2) exceed fifty per cent.
of the wages, the excess may be recovered in such manner, as may be prescribed.
(5) Where any deduction is made by the employer from the wages of an employee
under this section but not deposited in the account of the trust or Government fund or any
other account, as required under the provisions of the law for the time being in force, such
employee shall not be held responsible for such default of the employer.
19. (1) No fine shall be imposed on any employee save in respect of those acts and Fines.
omissions on his part as the employer, with the previous approval of the appropriate
Government or of such authority as may be prescribed, may have specified by notice under
sub-section (2).
(2) A notice specifying such acts and omissions shall be exhibited in such manner as
may be prescribed, on the premises in which the employment is carried on.
(3) No fine shall be imposed on any employee until such employee has been given an
opportunity of showing cause against the fine or otherwise than in accordance with such
procedure as may be prescribed for the imposition of fines.
(4) The total amount of fine which may be imposed in any one wage-period on any
employee shall not exceed an amount equal to three per cent. of the wages payable to him in
respect of that wage-period.
(5) No fine shall be imposed on any employee who is under the age of fifteen years.
(6) No fine imposed on any employee shall be recovered from him by instalments or
after the expiry of ninety days from the day on which it was imposed.
(7) Every fine shall be deemed to have been imposed on the day of the act or omission
in respect of which it was imposed.
(8) All fines and all realisations thereof shall be recorded in a register to be kept in such
manner and form as may be prescribed; and all such realisations shall be applied only to such
purposes beneficial to the persons employed in the establishment as are approved by the
prescribed authority.
20. (1) Deductions may be made under clause (b) of sub-section (2) of section 18 only Deductions for
on account of the absence of an employee from the place or places where by the terms of his absence from
duty.
employment, he is required to work, such absence being for the whole or any part of the
period during which he is so required to work.
(2) The amount of such deduction shall in no case bear to the wages payable to the
employed person in respect of the wage-period for which the deduction is made in a larger
proportion than the period for which he was absent bears to the total period within such
wage-period during which by the terms of his employment he was required to work:
Provided that, subject to any rules made in this behalf by the appropriate Government,
if ten or more employed persons acting in concert absent themselves without due notice
(that is to say without giving the notice which is required under the terms of their contracts
<< 232 >>

of employment) and without reasonable cause, such deduction from any such person may
include such amount not exceeding his wages for eight days as may by any such terms be
due to the employer in lieu of due notice.
Explanation.––For the purposes of this section, an employee shall be deemed to be
absent from the place where he is required to work if, although present in such place, he
refuses, in pursuance of a stay-in strike or for any other cause which is not reasonable in the
circumstances, to carry out his work.
Deductions for 21. (1) A deduction under clause (c) or clause (n) of sub-section (2) of section 18 for
damage or damage or loss shall not exceed the amount of the damage or loss caused to the employer by
loss.
negligence or default of the employee.
(2) A deduction shall not be made under sub-section (1) until the employee has been
given an opportunity of showing cause against the deduction or otherwise than in accordance
with such procedure as may be prescribed for the making of such deductions.
(3) All such deductions and all realisations thereof shall be recorded in a register to be
kept in such form as may be prescribed.
Deductions 22. A deduction under clause (d) or clause (e) of sub-section (2) of section 18 shall not
for services be made from the wages of an employee, unless the house-accommodation amenity or
rendered.
service has been accepted by him as a term of employment or otherwise and such deduction
shall not exceed an amount equivalent to the value of the house-accommodation amenity or
service supplied and shall be subject to such conditions as the appropriate Government may
impose.
Deductions for 23. Deductions under clause (f) of sub-section (2) of section 18 for recovery of
recovery of advances given to an employee shall be subject to the following conditions, namely:––
advances.
(a) recovery of advance of money given to an employee before the employment
began shall be made from the first payment of wages to him in respect of a complete
wage-period but no recovery shall be made of such advances given for travelling
expenses;
(b) recovery of advance of money given to an employee after the employment
began shall be subject to such conditions as may be prescribed;
(c) recovery of advances of wages to an employee not already earned shall be
subject to such conditions as may be prescribed.
Deductions for 24. Deductions under clause (g) of sub-section (2) of section 18 for recovery of loans
recovery of granted to an employee, regulating the extent to which such loans may be granted and the
loans.
rate of interest payable thereon, shall be such as may be prescribed.
Chapter not to 25. The provisions of this Chapter shall not apply to the Government establishments
apply to unless the appropriate Government, by notification, applies such provisions to the
Government
establishments. Government establishments specified in the said notification.
CHAPTER IV
PAYMENT OF BONUS
Eligibility for 26. (1) There shall be paid to every employee, drawing wages not exceeding such
bonus, etc. amount per mensem, as determined by notification, by the appropriate Government, by his
employer, who has put in at least thirty days work in an accounting year, an annual minimum
bonus calculated at the rate of eight and one-third per cent. of the wages earned by the
employee or one hundred rupees, whichever is higher whether or not the employer has any
allocable surplus during the previous accounting year.
(2) For the purpose of calculation of the bonus where the wages of the employee
exceeds such amount per mensem, as determined by notification by the appropriate
Government, the bonus payable to such employee under sub-sections (1) and (3) shall be
<< 233 >>

calculated as if his wage were such amount, so determined by the appropriate Government
or the minimum wage fixed by the appropriate Government, whichever is higher.
(3) Where in respect of any accounting year referred to in sub-section (1), the allocable
surplus exceeds the amount of minimum bonus payable to the employees under that
sub-section, the employer shall, in lieu of such minimum bonus, be bound to pay to every
employee in respect of that accounting year, bonus which shall be an amount in proportion
to the wages earned by the employee during the accounting year, subject to a maximum of
twenty per cent. of such wages.
(4) In computing the allocable surplus under this section, the amount set on or the
amount set off under the provisions of section 36 shall be taken into account in accordance
with the provisions of that section.
(5) Any demand for bonus in excess of the bonus referred to in sub-section (1), either
on the basis of production or productivity in an accounting year for which the bonus is
payable shall be determined by an agreement or settlement between the employer and the
employees, subject to the condition that the total bonus including the annual minimum
bonus referred to in sub-section (1) shall not exceed twenty per cent. of the wages earned
by the employee in the accounting year.
(6) In the first five accounting years following the accounting year in which the
employer sells the goods produced or manufactured by him or renders services, as the case
may be, from such establishment, bonus shall be payable only in respect of the accounting
year in which the employer derives profit from such establishment and such bonus shall be
calculated in accordance with the provisions of this Code in relation to that year, but
without applying the provisions of section 36.
(7) For the sixth and seventh accounting years following the accounting year in
which the employer sells the goods produced or manufactured by him or renders services,
as the case may be, from such establishment, the provisions of section 36 shall apply
subject to the following modifications, namely:—
(i) for the sixth accounting year set on or set off, as the case may be, shall be
made, in the manner as may be prescribed by the Central Government, taking into
account the excess or deficiency, if any, as the case may be, of the allocable surplus
set on or set off in respect of the fifth and sixth accounting years;
(ii) for the seventh accounting year set on or set off, as the case may be, shall
be made, in the manner as may be prescribed by the Central Government, taking into
account the excess or deficiency, if any, as the case may be, of the allocable surplus
set on or set off in respect of the fifth, sixth and seventh accounting years.
(8) From the eighth accounting year following the accounting year in which the
employer sells the goods produced or manufactured by him or renders services, as the case
may be, from such establishment, the provisions of section 36 shall apply in relation to such
establishment as they apply in relation to any other establishment.
Explanation 1.––For the purpose of sub-section (6), an employer shall not be deemed
to have derived profit in any accounting year, unless––
(a) he has made provision for depreciation of that year to which he is entitled
under the Income-tax Act or, as the case may be, under the agricultural income tax
law; and
(b) the arrears of such depreciation and losses incurred by him in respect of the
establishment for the previous accounting years have been fully set off against his
profits.
Explanation 2.––For the purposes of sub-sections (6), (7) and (8), sale of the goods
produced or manufactured during the course of the trial running of any factory or of the
<< 234 >>

prospecting stage of any mine or an oil-field shall not be taken into consideration and where
any question arises with regard to such production or manufacture, the appropriate
Government may, after giving the parties a reasonable opportunity of representing the case,
decide upon the issue.
(9) The provisions of sub-sections (6), (7) and (8) shall, so far as may be, apply to new
departments or undertakings or branches set up by existing establishments.
Proportionate 27. Where an employee has not worked for all the working days in an accounting
reduction in year, the minimum bonus under sub-section (1) of section 26, if such bonus is higher than
bonus in
certain cases.
eight and one third per cent. of the salary or wage of the days such employee has worked in
that accounting year, shall be proportionately reduced.
Computation 28. For the purposes of section 27, an employee shall be deemed to have worked in an
of number of establishment in any accounting year also on the days on which,––
working days.
(a) he has been laid off under an agreement or as permitted by standing orders
under the Industrial Employment (Standing Orders) Act, 1946, or under the Industrial 20 of 1946.
Disputes Act, 1947, or under any other law applicable to the establishment; 14 of 1947.
(b) he has been on leave with salary or wages;

(c) he has been absent due to temporary disablement caused by accident arising
out of and in the course of his employment; and
(d) the employee has been on maternity leave with salary or wages, during the
accounting year.
Disqualification 29. Notwithstanding anything contained in this Code, an employee shall be disqualified
for bonus. from receiving bonus under this Code, if he is dismissed from service for––
(a) fraud; or
(b) riotous or violent behaviour while on the premises of the establishment; or
(c) theft, misappropriation or sabotage of any property of the establishment; or
(d) conviction for sexual harassment.
Establishments 30. Where an establishment consists of different departments or undertakings or has
to include branches, whether situated in the same place or in different places, all such departments or
departments,
undertakings
undertakings or branches shall be treated as parts of the same establishment for the purpose
and branches. of computation of bonus under this Code:
Provided that where for any accounting year a separate balance sheet and profit and
loss account are prepared and maintained in respect of any such department or undertaking
or branch, then, such department or undertaking or branch shall be treated as a separate
establishment for the purpose of computation of bonus, under this Code for that year,
unless such department or undertaking or branch was, immediately before the commencement
of that accounting year treated as part of the establishment for the purpose of computation
of bonus.
Payment of 31. (1) The bonus shall be paid out of the allocable surplus which shall be an amount
bonus out of equal to sixty per cent. in case of a banking company and sixty-seven per cent. in case of
allocable other establishment, of the available surplus and the available surplus shall be the amount
surplus.
calculated in accordance with section 33.
(2) Audited accounts of companies shall not normally be questioned.
(3) Where there is any dispute regarding the quantum of bonus, the authority notified
by the appropriate Government having jurisdiction may call upon the employer to produce
the balance sheet before it, but the authority shall not disclose any information contained
in the balance sheet unless agreed to by the employer.
<< 235 >>

32. The gross profits derived by an employer from an establishment in respect of the Computation
accounting year shall,–– of gross
profits.
(a) in the case of a banking company, be calculated in the manner as may be
prescribed by the Central Government;
(b) in any other case, be calculated in the manner as may be prescribed by the
Central Government.
33. The available surplus in respect of any accounting year shall be the gross profits Computation
for that year after deducting therefrom the sums referred to in section 34: of available
surplus.
Provided that the available surplus in respect of the accounting year commencing on
any day in a year after the commencement of this Code and in respect of every subsequent
accounting year shall be the aggregate of—
(a) the gross profits for that accounting year after deducting therefrom the
sums referred to in section 34; and
(b) an amount equal to the difference between––
(i) the direct tax, calculated in accordance with the provisions of
section 35, in respect of an amount equal to the gross profits of the employer for
the immediately preceding accounting year; and
(ii) the direct tax, calculated in accordance with provisions of section 35,
in respect of an amount equal to the gross profits of the employer for such
preceding accounting year after deducting therefrom the amount of bonus
which the employer has paid or is liable to pay to his employees in accordance
with the provisions of this Code for that year.
34. The following sums shall be deducted from the gross profits as prior charges, Sums deductible
namely:— from gross
profits.
(a) any amount by way of depreciation admissible in accordance with the
provisions of sub-section (1) of section 32 of the Income-tax Act or in accordance
with the provisions of the agricultural income-tax law, for the time being in force, as
the case may be;
(b) subject to the provisions of section 35, any direct tax which the employer is
liable to pay for the accounting year in respect of his income, profits and gains during
that year;
(c) such further sums in respect of the employer as may be prescribed by the
Central Government.
35. For the purposes of this Code, any direct tax payable by the employer for any Calculation of
accounting year shall, subject to the following provisions, be calculated at the rates applicable direct tax
payable by
to the income of the employer for that year, namely:—
employer.
(a) in calculating such tax no account shall be taken of,––
(i) any loss incurred by the employer in respect of any previous accounting
year and carried forward under any law for the time being in force relating to
direct taxes;
(ii) any arrears of depreciation which the employer is entitled to add to
the amount of the allowance for depreciation for any succeeding accounting
year or years under sub-section (2) of section 32 of the Income-tax Act;
(b) where the employer is a religious or a charitable institution to which the
provisions of section 41 do not apply and the whole or any part of its income is
exempt from the tax under the Income-tax Act, then, with respect to the income so
<< 236 >>

exempted, such institution shall be treated as if it were a company in which the public
are substantially interested within the meaning of that Act;
(c) where the employer is an individual or a Hindu undivided family, the tax
payable by such employer under the Income-tax Act shall be calculated on the basis
that the income derived by him from the establishment is his only income;
(d) where the income of any employer includes any profits and gains derived
from the export of any goods or merchandise out of India and any rebate on such
income is allowed under any law for the time being in force relating to direct taxes,
then, no account shall be taken of such rebate;
(e) no account shall be taken of any rebate other than development rebate or
investment allowance or development allowance or credit or relief or deduction (not
hereinbefore mentioned in this section) in the payment of any direct tax allowed
under any law for the time being in force relating to direct taxes or under the relevant
annual Finance Act, for the development of any industry.
Set on and set 36. (1) Where for any accounting year, the allocable surplus exceeds the amount of
off of maximum bonus payable to the employees in the establishment under section 26, then, the
allocable
surplus.
excess shall, subject to a limit of twenty per cent. of the total salary or wage of the employees
employed in the establishment in that accounting year, be carried forward for being set on
in the succeeding accounting year and so on up to and inclusive of the fourth accounting
year to be utilised for the purpose of payment of bonus in such manner as may be prescribed
by the Central Government.
(2) Where for any accounting year, there is no available surplus or the allocable
surplus in respect of that year falls short of the amount of minimum bonus payable to the
employees in the establishment under section 26, and there is no amount or sufficient
amount carried forward and set on under sub-section (1) which could be utilised for the
purpose of payment of the minimum bonus, then, such minimum amount or the deficiency,
as the case may be, shall be carried forward for being set off in the succeeding accounting
year and so on up to and inclusive of the fourth accounting year in such manner as may be
prescribed by the Central Government.
(3) The principle of set on and set off as may be provided in rules by the Central
Government under this Code shall apply to all other cases not covered by sub-section (1)
or sub-section (2) for the purpose of payment of bonus under this Code.
(4) Where in any accounting year any amount has been carried forward and set on or
set off under this section, then, in calculating bonus for the succeeding accounting year,
the amount of set on or set off carried forward from the earliest accounting year shall first be
taken into account.
Adjustment of 37. Where in any accounting year,—
customary or
interim bonus (a) an employer has paid any puja bonus or other customary bonus to
against bonus employee; or
payable under
this Code. (b) an employer has paid a part of the bonus payable under this Code to an
employee before the date on which such bonus becomes payable,
then, the employer shall be entitled to deduct the amount of bonus so paid from the amount
of bonus payable by him to the employee under this Code in respect of that accounting year
and the employee shall be entitled to receive only the balance.
Deduction of 38. Where in any accounting year, an employee is found guilty of misconduct causing
certain financial loss to the employer, then, it shall be lawful for the employer to deduct the amount
amounts from
bonus payable.
of loss from the amount of bonus payable by him to the employee under this Code in
respect of that accounting year only and the employee shall be entitled to receive the
balance, if any.
<< 237 >>

39. (1) All amounts payable to an employee by way of bonus under this Code shall be Time limit for
paid by crediting it in the bank account of the employee by his employer within a period of payment of
bonus.
eight months from the close of the accounting year:
Provided that the appropriate Government or such authority as the appropriate
Government may specify in this behalf may, upon an application made to it by the employer
and for sufficient reasons, by order, extend the said period of eight months to such further
period or periods as it thinks fit; so, however, that the total period so extended shall not in
any case exceed two years.
(2) Notwithstanding anything contained in sub-section (1), where there is a dispute
regarding payment of bonus pending before any authority, such bonus shall be paid, within
a period of one month from the date on which the award becomes enforceable or the
settlement comes into operation, in respect of such dispute:
Provided that if, there is a dispute for payment at the higher rate, the employer shall
pay eight and one-third per cent. of the wages earned by the employee as per the provisions
of this Code within a period of eight months from the close of the accounting year.
40. (1) If in any accounting year an establishment in public sector sells any goods Application
produced or manufactured by it or renders any services, in competition with an establishment of this
Chapter to
in private sector, and the income from such sale or services or both, is not less than twenty establishments
per cent. of the gross income of the establishment in public sector for that year, then, the in public
provisions of this Chapter shall apply in relation to such establishment in public sector as sector in
they apply in relation to a like establishment in private sector. certain cases.
(2) Save as otherwise provided in sub-section (1), nothing in this Chapter shall apply
to the employees employed by any establishment in public sector.
41. (1) Nothing in this Chapter shall apply to–– Non-
applicability
(a) employees employed by the Life Insurance Corporation of India; of this
Chapter.
(b) seamen as defined in clause (42) of section 3 of the Merchant Shipping
44 of 1958. Act, 1958;
(c) employees registered or listed under any scheme made under the Dock
9 of 1948. Workers (Regulation of Employment) Act, 1948, and employed by registered or listed
employers;
(d) employees employed by an establishment under the authority of any
department of the Central Government or a State Government or a local authority;
(e) employees employed by––
(i) the Indian Red Cross Society or any other institution of a like nature
including its branches;
(ii) universities and other educational institutions;
(iii) institutions including hospitals, chamber of commerce and social
welfare institutions established not for purposes of profit;
(f) employees employed by the Reserve Bank of India;
(g) employees employed by public sector financial institution other than a
banking company, which the Central Government may, by notification, specify, having
regard to —
(i) its capital structure;
(ii) its objectives and the nature of its activities;
(iii) the nature and extent of financial assistance or any concession given
to it by the Government; and
(iv) any other relevant factor;
<< 238 >>

(h) employees employed by inland water transport establishments operating on

routes passing through any other country; and
(i) employees of any other establishment which the appropriate Government
may, by notification, exempt having regard to the overall benefits under any other
scheme of profit sharing available in such establishments to the employees.
(2) Subject to the provisions of sub-section (1) and notwithstanding anything
contained in any other provisions of this Chapter, the provisions of this Chapter shall apply
to such establishment in which twenty or more persons are employed or were employed on
any day during an accounting year.
CHAPTER V
ADVISORY BOARD
Central 42. (1) The Central Government shall constitute the Central Advisory Board which
Advisory shall consist of persons to be nominated by the Central Government—
Board and
State Advisory (a) representing employers;
Boards.
specified in clause (a);
Board; and
(d) five representatives of such State Governments as may be nominated by the
Central Government.
(2) One-third of the members referred to in sub-section (1) shall be women and a
member specified in clause (c) of the said sub-section shall be appointed by the Central
Government as the Chairperson of the Board.
(3) The Central Advisory Board constituted under sub-section (1) shall from time to
time advise the Central Government on reference of issues relating to––
(a) fixation or revision of minimum wages and other connected matters;
(b) providing increasing employment opportunities for women;
(c) the extent to which women may be employed in such establishments or
employments as the Central Government may, by notification, specify in this
behalf; and
(d) any other matter relating to this Code,
and on such advice, the Central Government may issue directions to the State Government
as it deems fit in respect of matters relating to issues referred to the Board.
(4) Every State Government shall constitute a State Advisory Board for advising the
State Government—
(a) in fixation or revision of minimum wages and other connected matters;
(b) for the purpose of providing increasing employment opportunities for women;
(c) with regard to the extent to which women may be employed in such
establishments or employments as the State Government may, by notification, specify
in this behalf; and
(d) in any other matter relating to this Code, which the State Government may
refer from time to time to the Board.
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(5) The State Advisory Board may constitute one or more committees or sub-committees
to look into issues pertaining to matters specified in clauses (a) to (d) of sub-section (4).
(6) The State Advisory Board and each of the committees and sub- committees thereof
shall consist of persons––
Board or committee or sub-committee, as the case may be.
(7) One-third of the members referred to in sub-section (6) shall be women and one
among the members specified in clause (c) of the said sub-section shall be––
(a) appointed by the State Government as the Chairperson of the Board;
(b) appointed by the State Advisory Board as the Chairperson of the committee
or sub-committee, as the case may be.
(8) In tendering its advice in the matters specified in clause (b) or clause (c) of
sub-section (4), the State Advisory Board shall have regard to the number of women
employed in the concerned establishment, or employment, the nature of work, hours of
work, suitability of women for employment, as the case may be, the need for providing
increasing employment opportunities for women, including part time employment, and such
other relevant factors as the Board may think fit.
(9) The State Government may, after considering the advice tendered to it by the State
Advisory Board and after inviting and considering the representations from establishment
or employees or any other person which that Government thinks fit, issue such direction as
may be deemed necessary.
(10) The Central Advisory Board referred to in sub-section (1) and the State Advisory
Board referred to in sub-section (4) shall respectively regulate their own procedure including
that of the committees and sub-committees constituted by the State Advisory Board, in
such manner as may be prescribed.
(11) The terms of office of the Central Advisory Board referred to in sub-section (1)
and the State Advisory Board referred to in sub-section (4) including that of the committees
and sub-committees constituted by the State Advisory Board, shall be such as may be
prescribed.
CHAPTER VI
PAYMENT OF DUES, CLAIMS AND AUDIT
43. Every employer shall pay all amounts required to be paid under this Code to every Responsibility
employee employed by him: for payment
of various dues.
Provided that where such employer fails to make such payment in accordance with
this Code, then, the company or firm or association or any other person who is the proprietor
of the establishment, in which the employee is employed, shall be responsible for such
payment.
Explanation.––For the purposes of this section the expression "firm" shall have the
9 of 1932. same meaning as assigned to it in the Indian Partnership Act, 1932.
44. (1) Subject to the other provisions of this Code, all amounts payable to an employee Payment of
under this Code shall, if such amounts could not or cannot be paid on account of his death various
undisbursed
before payment or on account of his whereabouts not being known,—
dues in case of
(a) be paid to the person nominated by him in this behalf in accordance with the death of
employee.
rules made under this Code; or
<< 240 >>

(b) where no such nomination has been made or where for any reasons such
amounts cannot be paid to the person so nominated, be deposited with the such
authority, as may be prescribed, who shall deal with the amounts so deposited in the
manner as may be prescribed.
(2) Where in accordance with the provisions of sub-section (1), all amounts payable
to an employee under this Code—
(a) are paid by the employer to the person nominated by the employee; or
(b) are deposited by the employer with the authority referred to in clause (b) of
sub-section (1),
then, the employer shall be discharged of his liability to pay those amounts.
Claims under 45. (1) The appropriate Government may, by notification, appoint one or more
Code and authorities, not below the rank of a Gazetted Officer, to hear and determine the claims which
procedure
thereof.
arises under the provisions of this Code.
(2) The authority appointed under sub-section (1), while deciding the claim under
that sub-section, may order, having regard to the circumstances under which the claim
arises, the payment of compensation in addition to the claim determined, which may extend
to ten times of the claim determined and endeavour shall be made by the authority to decide
the claim within a period of three months.
(3) If an employer fails to pay the claim determined and compensation ordered to be
paid under sub-section (2), the authority shall issue a certificate of recovery to the Collector
or District Magistrate of the district where the establishment is located who shall recover
the same as arrears of land revenue and remit the same to the authority for payment to the
concerned employee.
(4) Any application before the authority for claim referred to in sub-section (1) may
be filed by,––
(a) the employee concerned; or
(b) any Trade Union registered under the Trade Unions Act, 1926 of which the 16 of 1926.
employee is a member; or
(c) the Inspector-cum-Facilitator.
(5) Subject to such rules as may be made, a single application may be filed under this
section on behalf or in respect of any number of employees employed in an establishment.
(6) The application under sub-section (4) may be filed within a period of three years
from the date on which claims referred to in sub-section (1) arises:
Provided that the authority referred to in sub-section (1) may, entertain the application
after three years on sufficient cause being shown by the applicant for such delay.
(7) The authority appointed under sub-section (1) and the appellate authority
appointed under sub-section (1) of section 49, shall have all the powers of a civil court
under the Code of Civil Procedure, 1908, for the purpose of taking evidence and of enforcing 5 of 1908.
the attendance of witnesses and compelling the production of documents, and every such
authority or appellate authority shall be deemed to be a civil court for all the purposes of
section 195 and Chapter XXVI of the Code of Criminal Procedure, 1973. 2 of 1974.
Reference of 46. Notwithstanding anything contained in this Code, where any dispute arises
disputes under between an employer and his employees with respect to—
this Code.
(a) fixation of bonus or eligibility for payment of bonus under the provisions of
this Code; or
<< 241 >>

(b) the application of this Code, in respect of bonus, to an establishment in

public sector,
then, such dispute shall be deemed to be an industrial dispute within the meaning of the
14 of 1947. Industrial Disputes Act, 1947.
47. (1) Where, during the course of proceedings before— Presumption
about
(a) the authority under section 45; or accuracy of
balance sheet
(b) the appellate authority under section 49; or and profit and
(c) a Tribunal; or loss account
of
(d) an arbitrator referred to in clause (aa) of section 2 of the Industrial Disputes corporations
14 of 1947. Act, 1947, and
companies.
in respect of any dispute of the nature specified in sections 45 and 46 or in respect of an
appeal under section 49, the balance sheet and the profit and loss account of an employer,
being a corporation or a company (other than a banking company), duly audited by the
Comptroller and Auditor-General of India or by auditors duly qualified to act as auditors of
18 of 2013. companies under section 141 of the Companies Act, 2013, are produced before it, then, the
said authority, appellate authority, Tribunal or arbitrator, as the case may be, may presume
the statements and particulars contained in such balance sheet and profit and loss account
to be accurate and it shall not be necessary for the corporation or the company to prove the
accuracy of such statements and particulars by the filing of an affidavit or by any other
mode:
Provided that where the said authority, appellate authority, Tribunal or arbitrator, as
the case may be, is satisfied that the statements and particulars contained in the balance
sheet or the profit and loss account of the corporation or the company are not accurate, it
may take such steps as it thinks necessary to find out the accuracy of such statements and
particulars.
(2) When an application is made to the authority, appellate authority, Tribunal or
arbitrator, as the case may be, referred to in sub-section (1), by any Trade Union being a
party to the dispute or as the case may be, an appeal, and where there is no Trade Union,
by the employees being a party to the dispute, or as the case may be, an appeal, requiring
any clarification relating to any item in the balance sheet or the profit and loss account, then
such authority, appellate authority, Tribunal or arbitrator, may, after satisfying itself that
such clarification is necessary, by order, direct the corporation or, as the case may be, the
company, to furnish to the Trade Union or the employees such clarification within such time
as may be specified in the direction and the corporation or, as the case may be, the company,
shall comply with such direction.
48. (1) Where any claim, dispute or appeal with respect to bonus payable under this Audit of
Code between an employer, not being a corporation or a company, and his employees is account of
employers not
pending before any authority, appellate authority, Tribunal or arbitrator, as the case may be, being
as referred to in sub-section (1) of section 47 and the accounts of such employer audited by coporations
any auditor duly qualified to act as auditor of companies under the provisions of section or companies.
18 of 2013. 141 of the Companies Act, 2013, are produced before such authority, appellate authority,
Tribunal or arbitrator, then the provisions of section 47 shall, so far as may be, apply to the
accounts so audited.
(2) When the authority, appellate authority, Tribunal or arbitrator, referred to in
sub-section (1), as the case may be, finds that the accounts of such employer have not been
audited by any such auditor and it is of opinion that an audit of the accounts of such
employer is necessary for deciding the question referred to it, then, such authority, appellate
authority, Tribunal or arbitrator, may, by order, direct the employer to get his accounts
audited within such time as may be specified in the direction or within such further time as
it may allow by such auditor or auditors as it thinks fit and thereupon the employer shall
comply with such direction.
<< 242 >>

(3) Where an employer fails to get the accounts audited under sub-section (2), the
authority, appellate authority, Tribunal or arbitrator, referred to in sub-section (1), as the
case may be, may, without prejudice to the provisions of section 54, get the accounts
audited by such auditor or auditors as it thinks fit.
(4) When the accounts are audited under sub-section (2) or sub-section (3), the
provisions of section 47 shall, so far as may be, apply to the accounts so audited.
(5) The expenses of, and incidental to, any audit under sub-section (3) including the
remuneration of the auditor or auditors shall be determined by the authority, appellate
authority, Tribunal or arbitrator, referred to in sub-section (1), as the case may be, and paid
by the employer and in default of such payment shall be recoverable by the authority
referred to in sub-section (3) of section 45 from the employer in the manner provided in that
sub-section.
Appeal. 49. (1) Any person aggrieved by an order passed by the authority under sub-section
(2) of section 45 may prefer an appeal, to the appellate authority having jurisdiction appointed
by the appropriate Government, by notification, for such purpose, within ninety days from
the date of such order, in such form and manner as may be prescribed:
Provided that the appellate authority may entertain the appeal after ninety days if it
satisfied that the delay in filing the appeal has occurred due to sufficient cause.
(2) The appellate authority shall be appointed from the officers of the appropriate
Government holding the post at least one rank higher than the authority referred under
(3) The appellate authority shall, after hearing the parties in the appeal, dispose of the
appeal and endeavour shall be made to dispose of the appeal within a period of three
months.
(4) The outstanding dues under the orders of the appellate authority shall be recovered
by the authority referred to in section 45, by issuing the certificate of recovery in the manner
specified in sub-section (3) of that section.
Records, 50. (1) Every employer of an establishment to which this Code applies shall maintain
returns and a register containing the details with regard to persons employed, muster roll, wages and
notices.
such other details in such manner as may be prescribed.
(2) Every employer shall display a notice on the notice board at a prominent place of
the establishment containing the abstract of this Code, category-wise wage rates of
employees, wage period, day or date and time of payment of wages, and the name and
address of the Inspector-cum-Facilitator having jurisdiction.
(3) Every employer shall issue wage slips to the employees in such form and manner
(4) The provisions of sub-sections (1) to (3) shall not apply in respect of the employer
to the extent he employs not more than five persons for agriculture or domestic purpose:
Provided that such employer, when demanded, shall produce before the Inspector-
cum-Facilitator, the reasonable proof of the payment of wages to the persons so employed.
Explanation.—For the purposes of this sub-section, the expression "domestic
purpose" means the purpose exclusively relating to the home or family affairs of the employer
and does not include any affair relating to any establishment, industry, trade, business,
manufacture or occupation.
<< 243 >>

CHAPTER VII
INSPECTOR-CUM-FACILITATOR
51. (1) The appropriate Government may, by notification, appoint Inspector-cum- Appointment
Facilitators for the purposes of this Code who shall exercise the powers conferred on them of Inspector-
cum-
under sub-section (4) throughout the State or such geographical limits assigned in relation Facilitators
to one or more establishments situated in such State or geographical limits or in one or more and their
powers.
establishments, irrespective of geographical limits, assigned to him by the appropriate
Government, as the case may be.
(2) The appropriate Government may, by notification, lay down an inspection scheme
which may also provide for generation of a web-based inspection and calling of information
relating to the inspection under this Code electronically.
(3) Without prejudice to the provisions of sub-section (2), the appropriate Government
may, by notification, confer such jurisdiction of randomised selection of inspection for the
purposes of this Code to the Inspector-cum-Facilitator as may be specified in such
notification.
(4) Every Inspector-cum-Facilitator appointed under sub-section (1) shall be deemed
45 of 1860. to be public servant within the meaning of section 21 of the Indian Penal Code.
(5) The Inspector-cum-Facilitator may––
(a) advice to employers and workers relating to compliance with the provisions
of this Code;
(b) inspect the establishments as assigned to him by the appropriate
Government,
subject to the instructions or guidelines issued by the appropriate Government from time to
time.
(6) Subject to the provisions of sub-section (4), the Inspector-cum-Facilitator may,—
(a) examine any person who is found in any premises of the establishment,
whom the Inspector-cum-Facilitator has reasonable cause to believe, is a worker of
the establishment;
(b) require any person to give any information, which is in his power to give
with respect to the names and addresses of the persons;
(c) search, seize or take copies of such register, record of wages or notices or
portions thereof as the Inspector-cum-Facilitator may consider relevant in respect of
an offence under this Code and which the Inspector-cum-Facilitator has reason to
believe has been committed by the employer;
(d) bring to the notice of the appropriate Government defects or abuses not
covered by any law for the time being in force; and
(e) exercise such other powers as may be prescribed.
(7) Any person required to produce any document or to give any information required
by a Inspector-cum-Facilitator under sub-section (5) shall be deemed to be legally bound to
45 of 1860. do so within the meaning of section 175 and section 176 of the Indian Penal Code.
2 of 1974. (8) The provisions of the Code of Criminal Procedure, 1973 shall, so far as may be,
apply to the search or seizure under sub-section (5) as they apply to the search or seizure
made under the authority of a warrant issued under section 94 of the said Code.
<< 244 >>

CHAPTER VIII
Cognizance of 52. (1) No court shall take cognizance of any offence punishable under this Code,
offences. save on a complaint made by or under the authority of the appropriate Government or an
officer authorised in this behalf, or by an employee or a registered Trade Union registered
under the Trade Unions Act, 1926 or an Inspector-cum-Facilitator. 16 of 1926.
(2) Notwithstanding anything contained in the Code of Criminal Procedure, 1973, no 2 of 1974.
court inferior to that of a Metropolitan Magistrate or Judicial Magistrate of the first class
shall try the offences under this Code.
Power of 53. (1) Notwithstanding anything contained in section 52, for the purpose of imposing
officers of penalty under clauses (a) and (c) of sub-section (1) and sub-section (2) of section 54 and
appropriate
Government sub-section (7) of section 56, the appropriate Government may appoint any officer not
to impose below the rank of Under Secretary to the Government of India or an officer of equivalent
penalty in rank in the State Government, as the case may be, for holding enquiry in such manner, as
certain cases. may be prescribed by the Central Government.
(2) While holding the enquiry, the officer referred to in sub-section (1) shall have the
power to summon and enforce attendance of any person acquainted with the facts and
circumstances of the case to give evidence or to produce any document, which in the
opinion of such officer, may be useful for or relevant to the subject matter of the enquiry and
if, on such enquiry, he is satisfied that the person has committed any offence under the
provisions referred to in sub-section (1), he may impose such penalty as he thinks fit in
accordance with such provisions.
Penalties for 54. (1) Any employer who—
offences.
(a) pays to any employee less than the amount due to such employee under the
provisions of this Code shall be punishable with fine which may extend to fifty
thousand rupees;
(b) having been convicted of an offence under clause (a) is again found guilty
of similar offence under this clause, within five years from the date of the commission
of the first or subsequent offence, he shall, on the second and the subsequent
commission of the offence, be punishable with imprisonment for a term which may
extend to three months or with fine which may extend to one lakh rupees, or with
both;
(c) contravenes any other provision of this Code or any rule made or order
made or issued thereunder shall be punishable with fine which may extend to twenty
thousand rupees;
(d) having been convicted of an offence under clause (c) is again found guilty
of similar offence under this clause, within five years from the date of the commission
of the first or subsequent offence, he shall, on the second and the subsequent
commission of the offence under this clause, be punishable with imprisonment for a
term which may extend to one month or with fine which may extend to forty thousand
rupees, or with both.
(2) Notwithstanding anything contained in sub-section (1), for the offences of
non-maintenance or improper maintenance of records in the establishment, the employer
shall be punishable with fine which may extend to ten thousand rupees.
(3) Notwithstanding anything contained in clause (c) of sub-section (1) or
sub-section (2), the Inspector-cum-Facilitator shall, before initiation of prosecution
proceeding for the offences under the said clause or sub-section, give an opportunity to
the employer to comply with the provisions of this Code by way of a written direction,
which shall lay down a time period for such compliance, and, if the employer complies with
<< 245 >>

the direction within such period, the Inspector-cum-Facilitator shall not initiate such
prosecution proceeding and, no such opportunity shall be accorded to an employer, if the
violation of the same nature of the provisions under this Code is repeated within a period of
five years from the date on which such first violation was committed and in such case the
prosecution shall be initiated in accordance with the provisions of this Code.
55. (1) If the person committing an offence under this Code is a company, every Offences by
person who, at the time the offence was committed was in charge of, and was responsible to companies.
the company for the conduct of business of the company, as well as the company, shall be
deemed to be guilty of the offence and shall be liable to be proceeded against and punished
accordingly:
Provided that nothing contained in this sub-section shall render any such person
liable to any punishment if he proves that the offence was committed without his knowledge
or that he exercised all due diligence to prevent the commission of such offence.
(2) Notwithstanding anything contained in sub-section (1), where an offence under
this Code has been committed by a company and it is proved that the offence has been
committed with the consent or connivance of, or is attributable to any neglect on the part of,
any director, manager, secretary or other officer of the company, such director, manager,
secretary or other officer shall also be deemed to be guilty of that offence and shall be liable
to be proceeded against and punished accordingly.
Explanation.––For the purposes of this section,––
(a) "company" means anybody corporate and includes—
(i) a firm; or
(ii) a limited liability partnership registered under the Limited Liability
6 of 2009. Partnership Act, 2008; or
(iii) other association of individuals; and
(b) "director" in relation to a firm means a partner in the firm.
2 of 1974. 56. (1) Notwithstanding anything contained in the Code of Criminal Procedure, 1973, Composition
any offence punishable under this Code, not being an offence punishable with imprisonment of offences.
only, or with imprisonment and also with fine, may, on an application of the accused person,
either before or after the institution of any prosecution, be compounded by a Gazetted
Officer, as the appropriate Government may, by notification, specify, for a sum of fifty per
cent. of the maximum fine provided for such offence, in the manner as may be prescribed.
(2) Nothing contained in sub-section (1) shall apply to an offence committed by a
person for the second time or thereafter within a period of five years from the date— (i) of
commission of a similar offence which was earlier compounded; (ii) of commission of similar
offence for which such person was earlier convicted.
(3) Every officer referred to in sub-section (1) shall exercise the powers to compound
an offence, subject to the direction, control and supervision of the appropriate Government.
(4) Every application for the compounding of an offence shall be made in such manner
(5) Where any offence is compounded before the institution of any prosecution, no
prosecution shall be instituted in relation to such offence, against the offender in relation to
whom the offence is so compounded.
(6) Where the composition of any offence is made after the institution of any
prosecution, such composition shall be brought by the officer referred to in sub-section (1)
in writing, to the notice of the court in which the prosecution is pending and on such notice
of the composition of the offence being given, the person against whom the offence is so
compounded shall be discharged.
<< 246 >>

(7) Any person who fails to comply with an order made by the officer referred to in
sub-section (1), shall be punishable with a sum equivalent to twenty per cent. of the
maximum fine provided for the offence, in addition to such fine.
(8) No offence punishable under the provisions of this Code shall be compounded
except under and in accordance with the provisions of this section.
CHAPTER IX
MISCELLANEOUS
Bar of suits. 57. No court shall entertain any suit for the recovery of minimum wages, any deduction
from wages, discrimination in wages and payment of bonus, in so far as the sum so claimed—
(a) forms the subject of claims under section 45;
(b) has formed the subject of a direction under this Code;
(c) has been adjudged in any proceeding under this Code;
(d) could have been recovered under this Code.
Protection of 58. No suit, prosecution or any other legal proceeding shall lie against the appropriate
action taken Government or any officer of that Government for anything which is in good faith done or
in good faith.
intended to be done under this Code.
Burden of 59. Where a claim has been filed on account of non-payment of remuneration or
proof. bonus or less payment of wages or bonus or on account of making deductions not authorised
by this Code from the wages of an employee, the burden to prove that the said dues have
been paid shall be on the employer.
Contracting 60. Any contract or agreement whereby an employee relinquishes the right to any
out. amount or the right to bonus due to him under this Code shall be null and void in so far as
it purports to remove or reduce the liability of any person to pay such amount under this
Code.
Effect of laws 61. The provisions of this Code shall have effect notwithstanding anything
agreements, inconsistent therewith contained in any other law for the time being in force or in the terms
etc.,
inconsistent
of any award, agreement, settlement or contract of service.
with this
Code.
Delegation of 62. The appropriate Government may, by notification, direct that any power exercisable
powers. by it under this Code shall, in relation to such matters and subject to such conditions, if any,
as may be specified in the notification, be also exercisable—
(a) where the appropriate Government is the Central Government, by such
officer or authority subordinate to the Central Government or by the State Government
or by such officer or authority subordinate to the State Government, as may be
specified in the notification;
(b) where the appropriate Government is a State Government, by such officer or
authority subordinate to the State Government as may be specified in the notification.
Exemption of 63. Where an employer is charged with an offence under this Code, he shall be
employer entitled upon complaint duly made by him, to have any other person whom he charges as
from liability
in certain
the actual offender, brought before the court at the time appointed for hearing the charge;
cases. and if, after the commission of the offence has been proved, the employer proves to the
satisfaction of the court—
(a) that he has used due diligence to enforce the execution of this Code; and
(b) that the said other person committed the offence in question without his
knowledge, consent or connivance,
<< 247 >>

that other person shall be convicted of the offence and shall be liable to the like punishment
as if he were the employer and the employer shall be discharged from any liability under this
Code in respect of such offence:
Provided that in seeking to prove, as aforesaid, the employer may be examined
on oath, and the evidence of the employer or his witness, if any, shall be subject to
cross-examination by or on behalf of the person whom the employer charges as the actual
offender and by the prosecution.
64. Any amount deposited with the appropriate Government by an employer to secure Protection
the due performance of a contract with that Government and any other amount due to such against
attachments
employer from that Government in respect of such contract shall not be liable to attachment of assets of
under any decree or order of any court in respect of any debt or liability incurred by the employer with
employer other than any debt or liability incurred by the employer towards any employee Government.
employed in connection with the contract aforesaid.
65. The Central Government may, for carrying into execution of the provisions of this Power of
Code in the State give directions to the State Government, and the State Government shall Central
Government
abide by such directions. to give
directions.
66. Nothing contained in this Code shall be deemed to affect the provisions of the Saving.
42 of 2005. Mahatma Gandhi National Rural Employment Guarantee Act, 2005 and the Coal Mines
46 of 1948. Provident Fund and Miscellaneous Provisions Act, 1948, or of any scheme made thereunder.
67. (1) The appropriate Government may, subject to the condition of previous Power of
publication, make rules for carrying out the provisions of this Code. appropriate
Government
(2) In particular and without prejudice to the generality of the foregoing power, such to make rules.
rules may provide for all or any of the following matters, namely:––
(a) the manner of calculating the wages under sub-section (4) of section 6;
(b) the arduousness of work to be taken into account in addition to minimum
rate of wages for certain category of workers under clause (b) of sub-section (6) of
section 6;
(c) the norms under clause (c) of sub-section (6) of section 6;
(d) the cases and circumstances in which an employee employed for a period of
less than the requisite number of hours shall not be entitled to receive wages for a full
normal working day, under section 10;
(e) the extent and conditions, which shall apply in relation to certain classes of
employees under sub-section (2) of section 13;
(f) the longer wage period for fixation of minimum rate of wages as referred to in
section 14;
(g) the manner of deducting loans made from any fund constituted for the
welfare of labour under sub-clause (ii) of clause (f) of sub-section (2) of section 18;
(h) the manner of recovery of excess of amount under sub-section (4) of
section 18;
(i) the authority to provide approval for imposition of fine under sub-section (1)
of section 19;
(j) the manner of exhibition of the acts and omissions to be specified in the
notice under sub-section (2) of section 19;
(k) the procedure for the imposition of fines under sub-section (3) of
section 19;
(l) the form of the register to record all fines and all realisations thereof under
(m) the procedure for making deductions for absence from duty under
<< 248 >>

(n) the procedure for making deductions for damage or loss under sub-section (2)
of section 21;
(o) the form of the register to record all deductions and all realisations thereof
under sub-section (3) of section 21;
(p) conditions for recovery of advance of money given to an employee after the
employment began under clause (b) of section 23;
(q) conditions for recovery of advances of wages to an employee not already
earned under clause (c) of section 23;
(r) deductions for recovery of loans and the rate of interest payable thereon
under section 24;
(s) the manner of regulating the procedure by the Central Advisory Board and
the State Advisory Board, including that of the committees and sub-committees
constituted by the State Advisory Board, under sub-section (10) of section 42;
(t) the terms of office of members of the Central Advisory Board, the State
Advisory Board, including that of the committees and sub-committees constituted
by the State Advisory Board, under sub-section (11) of section 42;
(u) the authority and manner of depositing with such authority, various
undisbursed dues under clause (b) of sub-section (1) of section 44;
(v) the form of single application in respect of a number of employees under
(w) the form for making an appeal to the appellate authority under sub-section
(1) of section 49;
(x) the manner of maintenance of a register by the employer under sub-section (1)
of section 50;
(y) the form and manner of issuing wage slips under sub-section (3) of
section 50;
(z) the other powers to be exercised by the Inspector-cum-Facilitator under
(za) the manner of imposing fine under sub-section (1) of section 56;
(zb) the manner of composition of offence by a Gazetted Officer specified under
(zc) any other matter which is required to be, or may be, prescribed under the
provisions of this Code.
(3) The Central Government may, subject to the condition of previous publication,
make rules for,—
(a) the manner of fixing floor wage under sub-section (1) of section 9;
(b) the manner of consultation with State Government under sub-section (3) of
section 9;
(c) the manner of making set on or set off for the sixth accounting year under
clause (i) of sub-section (7) of section 26;
(d) the manner of making set on or set off for the seventh accounting year
under clause (ii) of sub-section (7) of section 26;
(e) the manner of calculating gross profit under clauses (a) and (b) of
section 32;
(f) such further sums in respect of employer under clause (c) of section 34;
(g) the manner of utilising the excess of allocable surplus to be carried forward
for being set on in the succeeding accounting year and so on up to and inclusive of
the fourth accounting year under sub-section (1) of section 36;
(h) the manner of utilising the minimum amount or the deficiency to be carried
forward for being set off in the succeeding accounting year and so on up to and
inclusive of the fourth accounting year under sub-section (2) of section 36; and
<< 249 >>

(i) the manner of holding an enquiry under sub-section (1) of section 53.
(4) Every rule made by the Central Government under this section shall be laid, as
soon as may be after it is made, before each House of Parliament, while it is in session, for
a total period of thirty days which may be comprised in one session or in two or more
successive sessions, and if, before the expiry of the session immediately following the
session or the successive sessions as aforesaid, both Houses agree in making any
modification in the rule or both Houses agree that rule should not be made, the rule shall
thereafter have effect only in such modified form or be of no effect, as the case may be; so,
however, that any such modification or amendment shall be without prejudice to the validity
of anything previously done under that rule.
(5) Every rule made by the State Government under this section shall, as soon as
possible after it is made, be laid before the State Legislature.
68. (1) If any difficulty arises in giving effect to the provisions of this Code, the Power to
Central Government may, by order published in the Official Gazette, make such provisions remove
difficulties.
not inconsistent with the provisions of this Code, as may appear to be necessary for
removing the difficulty:
Provided that no such order shall be made under this section after the expiry of a
period of three years from the commencement of this Code.
(2) Every order made under this section shall be laid, as soon as may be after it is
made, before each House of Parliament.
4 of 1936. 69. (1) The Payment of Wages Act, 1936, the Minimum Wages Act, 1948, the Payment Repeal and
11 of 1948. of Bonus Act, 1965 and the Equal Remuneration Act, 1976 are hereby repealed. savings.
21 of 1965.
25 of 1976. (2) Notwithstanding such repeal, anything done or any action taken under the enactments
so repealed including any notification, nomination, appointment, order or direction made
thereunder or any amount of wages provided in any provision of such enactments for any
purpose shall be deemed to have been done or taken or provided for such purpose under the
corresponding provisions of this Code and shall be in force to the extent they are not contrary
to the provisions of this Code till they are repealed under the corresponding provisions of this
Code or by the notification to that effect by the Central Government.
(3) Without prejudice to the provisions of sub-section (2), the provisions of
10 of 1897. section 6 of the General Clauses Act, 1897 shall apply to the repeal of such enactments.
————
DR. G. NARAYANA RAJU,

Secretary to the Govt. of India.
UPLOADED BY THE MANAGER, GOVERNMENT OF INDIA PRESS, MINTO ROAD, NEW DELHI–110002
AND PUBLISHED BY THE CONTROLLER OF PUBLICATIONS, DELHI–110054.
MGIPMRND—2589GI(S3)—08-08-2019.
<< 250 >>

A08
Writ Petition
21535/2019
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A09
IBA Affidavit
dt.27.11.2019
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A10
Writ Petition
2670/2020
<< 275 >>

1
IN THE HIGH COURT OF JUDICATURE AT MADRAS

(SPECIAL ORIGINAL JURISDICTION)
W.P. No. of 2020
L. Alex,
S/o. A.R.Lourdusamy,
Manager Retd. Canara Bank,
D-408, Aiswarya Apartments,
Kavanur Road,
Potheri,
Chennai 603 203. … Petitioner
-Vs-
1. The Secretary
Ministry of Finance,
3rd Floor, Jeevan Deep Building,
Sansad Marg, New Delhi – 110 001.
2. The Chief Labour Commissioner (Central),

Ministry of Labour & Employment
Shram Shakti Bhawan, Rafi Marg,
New Delhi
3. The Secretary,
Indian Banks Association
World Trade Centre 6th Floor
Cuffee Parade, Mumbai – 400 005

All India Bank Officer’s Confederation
1, Strand Road, P.B.No, 2874 ( GPO)
Kolkatta – 700 001. … Respondents
AFFIDAVIT
I, L.Alex S/o. A.R.Lourdusamy, aged about 61 years, residing at D-408,
Aiswarya Apartments, Kavanur Road, Potheri, Chennai 603 203, do hereby
solemnly affirm and sincerely state as under:
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2
1. I am the Petitioner herein and as such I am well acquainted with the facts of
the case.
2. I submit that I am residing in the above said address. I have joined in the
services of Canara Bank on 04.10.1982. After rendering 35 years of service in
Canara Bank, I was superannuated on 31.01.2018 as Manager.
3. I submit that the 11th Bipartite settlement which fell due from 1st day of
November 2017, and I have retired on 31.01.2018 after the due date of the
11th Bipartite settlement. I will automatically be a beneficiary if any wage
revision, Settlement is signed by the United forum of Bank Unions
representing the bank employees and officers with the Indian Banks
Association.
4. I submit that the overall controlling authority for Banks including the service
conditions and fixation of salary vests with the 1st Respondent being the
appropriate Government for the Banking Industry.
5. I submit that Managerial and the Supervisory staff employed in Banks are
covered under the Code on Wages-2019 Act which Act came into force by Gazette
Notification on 8-8-2019. The 2nd Respondent is the implementing authority for the
Act.
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3
6. I submit that as per the Sec 2 (d) and (k), the Code on wages -2019 Act,
Bank Officers and the Managers are also covered under the Act. More so, as per
the Sec 61 of the Code on Wages-2019 Act, the provisions of this code shall have
effect notwithstanding anything inconsistent therewith contained in any other law
for the time being in force or in the terms of any award, agreement, settlement or
contract of service. Therefore, the Act prevails over any settlement or agreement
already in force or proposed in contravention of the Act.
7. I submit that the Code on Wages-2019 Act stipulates a need based minimum
wage payable in respect of the work done in such employment but not related to
the paying capacity or profit of the institutions. The Act discards the load factor
and stipulates salary commensurate with the nature of the work and risk attendant
on that job and enables one to maintain the decent living standard required to
match the status for that job. Moreover, as per the Act, the Contribution towards
pension and the interest accrued shall not form part of financial issues.
8. I submit that the 4th Respondent as the majority of Officer’s representative
body submits Charter of Demands (COD in short) to the 3rd Respondent for salary
revision as and when due. The 4th Respondent finalise the salary structure for the
Officers who are all otherwise called as Managerial Cadre from Junior
Management Scale -1 to Senior Management working in the Banking Industry by
holding salary revision negotiations with the 3rd Respondent. This Process is
called bi-partite salary revision. The 11th bi-partite salary revision between the 4th
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4
and the 3rd Respondent is in progress and though retired, I am entitled for the 11th
bi-partite salary revision.
9. I submit that the 3rd respondent body of Indian Bank’s Association (I.B.A.,
in short) is comprised of Managing Directors or Chief Executive Officers from
Public Sector Banks and they negotiate the common salary structure with the 4th
Respondent and sign a “ Settlement “ for workmen and sign a “ Joint Note” on
the proposed salary for Officers and the Managerial cadre. The “Joint Note” shall
be implemented with the clearance by the 1st Respondent and with the concurrence
of the 2nd Respondent so as to make it binding.
10. I submit that the 7th Central Pay Commission, hereinafter referred to as
Central Pay Commission recommendations were implemented since 1-1-2016 for
the Central Government Employees. It is submitted that the 7th Central Pay
Commission scientifically formulated the bench mark for National Minimum
Wages right from the entry level lowest cadre to Cabinet Secretary level which
includes various stages and cadres by rightly taking into account the
recommendations of International Labour Organisation, hereinafter referred to as
I.L.O Minimum Wage Fixing Convention,1970 (No.131). It is submitted that the
I.L.O. convention stipulated that minimum wage is one that is payable to a
person employed in respect of his employment or of work done in such
employment, but not related to the profit or paying capacity of the Institutions.
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5
11. I submit that therefore the benchmark National Minimum Wage structure
for each cadre which is also mandated in the Code on Wages-2019-Act to fix a
“need based minimum wage to Bank officers” is formulated and presented in the
7th C.P.C., itself by discarding the paying capacity of the employer or the load
factor on the wage bill.
12. I submit that the necessity to fix equivalence of posts with regard to their
salary drawn in Government Sector and other Public Sector Undertakings has
arisen as the consequence of the upward revision of salary consequential to the
7th C.P.C., implementation. It is submitted that the Union Cabinet, therefore, in
their considered decision of fixing income standards, while notifying equivalence
of pay drawn cadres, equated Junior Management Grade Scale I (J.M.G.-Scale 1)
in public sector banks with that of the Group “A” in Government of India vide
their letter No. 19/4/2017- Welfare, Government of India Dt. 19-4-2017.
13. I submit that the Union Cabinet notified that both J.M.G.-Scale 1 in public
sector banks and those in Group “A” in Govt. Service are equals with regard to
their pay and income and therefore notified that both to fall under creamy layer
for OBC reservation.
14. I submit that therefore the Union Government notification of putting
together both the Group “A” Government Service and the J.M.G.-Scale 1 in banks
as equivalent posts follows that the minimum pay for both the cadres shall not be
unequal.
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6
15. I submit that in all fairness when there is equivalence of cadre, obviously
there ought to be equivalence of minimum pay. It is therefore submitted that when
the minimum pay for Grade-A officer in Government service as per the 7th C.P.C.
is Rs.56,100/-, the minimum pay for J.M.G.-Scale-1 ought to be equal to
Rs.56,100/- or more than that on the relevant date of 1-1-2016.
16. I submit that as the 11th bi-partite salary revision in Banking Industry is due
from 1-11-2017 and the present wage revision negotiations in Banks are being held
after the implementation of 7th C.P.C. to the Central and State Government
employees. Therefore it naturally follows that the Banking Industry ought not to be
an exception and excluded from taking into account the 7th C.P.C. formula in fixing
the starting minimum pay for officers.
17. I submit that the 4th respondent therefore submitted to the 3rd Respondent the
charter of demands for the current wage revision of 11th bi-partite settlement by
putting forth starting minimum pay of Grade-A officer in Government service as
the starting minimum pay for J.M.G.-Scale 1 at Rs. 56,100/.- on the relevant date
of 1-1-2016. Further, this demand in only in conformity with the 7th C.P.C.
recommendations being adopted as the bench mark for salary structure by other
Government sectors and in accordance with the need based minimum wages
outlined in the Code on Wages- Bill which has since become the Act. It is also
consonance with the Union cabinet’s notification of categorizing the J.M.G.-Scale
-1, as the equivalent cadre for Group “A” officer in Government service.
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7
Accordingly, in page No.36 of COD – Table 3, Rs. 61,000/- was demanded as the
starting pay for J.M.G.Scale-1.
18. I submit that the 11th bi-partite talks are being held by the 3rd Respondent on
the context of paying capacity instead of adopting the need based minimum wage
formula adopted by the 7th C.P.C., and /or in accordance with the Code on Wages -
2019 Act.
19. I submit that in that Writ Petitions it is to everyone’s knowledge the 4th
Respondent has filed their supportive counter Affidavit stating that in the matter of
revision of salary and allowances, this time demand has been raised by all the four
apex bodies of Trade Unions to ensure relativity with minimum salary in line with
Central Government Group “A” officers initial Pay. The Charter of Demand has
addressed the need to align our wages on the concept of “Minimum Wages”. It is
further submitted in their Affidavit that in the 11 th bi-partite settlement negotiation,
there has been a demand raised by all the 4 Trade Unions representing Officers of
the Banks to get minimum salary in line with Grade ”A” officers in the Central
Government Service. Thus, there is total unanimity amongst Bank Officer’s
Association on the demand for minimum salary in line with Central Govt. Group
“A” officers initial pay.
20. I submit that the 3rd Respondent, after having signed 10 bi-partite
settlements so far since the year 1962 with Bank men Associations and after
having held for the past two years, more than 35 rounds of negotiations with Bank
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8
Officer Associations in the current 11th bi-partite process, has now changed their
stand as a “Facilitator”. It is to every ones’ knowledge that the 3rd Respondent in
Writ Petition W.P.(MD).No.22161 of 2018 pending before the Hon’ble Madurai
Bench of Madras High Court, have filed their Counter wherein they solemnly
affirmed in their affidavit that they are only a “Facilitators’ and “ have no authority
of its own either to agree or decide in fixing the salary”….. (of Bank Officers).
21. I submit that a facilitator shall come into picture only when the parties to the
dispute agree for his role as per the terms of the contract or as per the Arbitration
Act so as to resolve the dispute between them within the specified time frame
agreed by the parties. But the Unions and/ or the Bank managements had never
entered into an agreement for the role of 3rd Respondent as the Facilitator. The
self-declaration by the 3rd Respondent as a facilitator raises the question as to who
is sitting on the other side of the Unions to accept Union’s demands. All along, the
11th bi-partite salary revision negotiations are held between Bank Officers
Associations on the one side and the Bank managements namely the 3rd
Respondent as the opposite rival side party. More so, the 3rd Respondent even after
filing their affidavit by claiming themselves as a Facilitator, continues to negotiate
with the employees as the opposite party status of employer. This dual role
intended by the 3rd Respondent to remain as the Facilitator tagged to the employer
status is arbitrary, illegal and unconstitutional.
22. I submit that Equity, Justice and Fair Play demands that a Facilitator ought
to be an independent authority to resolve the dispute and cannot simultaneously sit
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9
and argue as the opposite party to the dispute. The 3rd Respondent is playing the
dual role of an umpire as well as the player in one and the same match which is
against Natural Justice.
23. I submit that, I reliably understand that the representative of the Ministry of
Finance, Indian Banks Association and United Forum of Banks Union participated
in the discussion organized by the 1st Respondent on 27.01.2020 and discussed the
issue of Wage revision negotiation held on 13.01.2020 with the Negotiation
Committee of the 3rd Respondent. The meeting also discussed about the proposed
strike notice given by the United Forum of Banks union on 31.01.2020 and
1.02.2020 and 1st Respondent also requested the United Forum of Banks Union to
consider to defer their proposed strike. The 1st Respondent also advised the
Negotiation Committee of the 3rd Respondent to arrange a meeting urgently either
on 29.01.2020 or 30.01.2020 and further discussion should be made with open
mind by all Stake Holders afresh to that long pending Wage revision matter could
be resolved amicably on priority basis.
24. I submit that the 3rd respondent by his communication dated 28.01.2020 has
informed the 4th Respondent and 8 other Bank Employees Union to attend the
meeting by their authorized representative on 30.01.2020 at 11 A.M. before the
Chairman Negotiating Committee of the 3rd Respondent. As per the notice dated
28.01.2020 the 3rd Respondent conducted meeting and held discussions with the 4th
Respondent and the other representatives of Bank Employees union for the Wage
revision. However not fruitful discussion had taken place and hence the Bank
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10
Employees Union decided to go ahead with All India Bank Strike on 31.01.2020
and 01.02.2020.
25. I submit that it is very unfortunate, illegal and quite atrocious on the part of
the 3rd Respondent by issuing a Public Notice in “The Hindu” English Daily dated
31.01.2020 and has gone to the extent of uncalled for remarks against the
Employees of the Bank for pressing for their legitimate demands for which they
are legally entitled to and allowed by the 1st Respondent. The uncalled for remarks
given by the 3rd Respondent in the Public notice is as follows;
“we regret the inconvenience caused to the General Public because of
irresponsible behavior of the unions”
26. I submit that it is agonizing to note that the 3 rd respondent is taking
inconsistent stand in claiming their status. They filed a counter Affidavit in Writ
Petition W.P.(MD).No.22161 of 2018 pending before the Hon’ble Madurai Bench
of Madras High Court, wherein they solemnly affirmed that they are only a
“Facilitators’ and “ have no authority of its own either to agree or decide in fixing
the salary “….. (of Bank Officers). On contrary they issued a letter to the 4th
Respondent and 8 Bank Employees Unions requesting to participate in the 11th Bi-
Partite proceedings on 30.01.2020 and has gone to the extent of giving public
notice pointing out about the failure in discussion held by the 3 rd Respondent
Negotiation Committee and the united Forum of Banks Union for the wage
revision of bank employees. The 3rd respondent has behaved irresponsibly and has
committed a perjury by filing a misleading Counter Affidavit in Writ Petition
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11
W.P.(MD).No.22161 of 2018 pending before the Hon’ble Madurai Bench of
Madras High Court, on the contrary calling the unions of the Bank Employees for
negotiation and issuing Public Notification expressing its regret for the
inconvenience caused to general public irresponsibly.
27. I submit that I have been informed that the 3 rd Respondent has postponed the
Negotiation meetings with the representatives of the Bank employees (Unions) to
6th February 2020 by informing the Unions orally on 30.01.2020. Therefore there is
urgency in obtaining order of injunction from this Hon’ble High Court.
28. I submit that by not considering the Code on Wages-2019 Act and by
implementing the 7th C.P.C. minimum pay fixed for each cadre, if the 3rd
Respondent is allowed to proceed to fix the pay, it shall in turn impose an
unrealistic relativity Load norms thereby putting into cold storage the Union
Cabinet decisions on equating the J.M.G.-Scale-1 pay with that of the Group -A
officers in Govt. Sector much to the detrimental of J.M.G.- Scale -1. It is submitted
that as the Fourth respondent is determined to finalize the 11th bi-partite settlement
by ignoring the Union Government’s Notification with regard to their equivalence
of income with Group “A” , and as the 3rd Respondent’s actions are much to the
detriment of Bank officers and is in against the Code on Wages-2019 Act and is
violative of Article 14 of the Constitution of India and hence I am left with no
other alternative remedy except to seek the protection of this Hon’ble Court under
Article 226 of the Constitution of India seeking a direction.
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12
I submit that the 3rd respondent Negotiation Committee has no legal sanctity
and if they allowed to proceed further in the negotiation talks without any legal
status it will have a huge impact in my monetary and retirement benefits.
It is submitted that unless this Hon’ble Court restrains the 1st respondent
from allowing the 3rd respondent in engaging or participating in 11 th Bi-Partite
proceedings in any manner whatsoever either presented in form of “Joint Note” or
“Settlement” the petitioner will put to untold mental agony, great hardship and
financial loss. The balance of convenience is in favour of the petitioner.
It is therefore prayed that this Hon’ble court may be pleased to grant an
order of interim injunction restraining the 1st respondent from allowing the 3rd
respondent in engaging or participating in 11th Bi-Partite proceedings in any
manner whatsoever either presented in form of “Joint Note” or “Settlement” with
the representatives of Bank Employees (Unions) pending disposal of the Writ
petition and thus render justice.
In the above circumstances, it is prayed that this Hon’ble court may be
pleased to issue a Writ of Mandamus or any other writ, order or direction of a like
nature forbearing the 1st respondent from allowing the 3rd respondent in engaging
or participating in 11th Bi-Partite proceedings in any manner whatsoever either
presented in form of “Joint Note” or “Settlement” without authorizing or giving
Legal status to the 3rd respondent to negotiate or arrive at settlement with
representatives of Bank Employees (Unions) since the 3 rd respondent is only a
“Facilitators’ and “ have no authority of its own either to agree or decide in fixing
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13
the salary “….. (of Bank Officers) as admitted by them in the sworn Counter
Affidavit in Writ Petition W.P.(MD).No.22161 of 2018 pending before the
Hon’ble Madurai Bench of Madras High Court and pass such further or other
orders as this Hon’ble Court may deem fit and proper in the circumstances of the
case and thus render justice.
Solemnly affirmed at BEFORE ME,

on this 31st day of January 2020
and signed his name in my presence.
Advocate, Chennai.
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14
MEMORANDUM OF WRIT MISCELLANEOUS PETITION FILED UNDER ARTICLE

226 OF THE CONSTITUTION OF INDIA
M.P.No. OF 2020
IN
W.P.No. OF 2020
L. Alex,
Kavanur Road,
Potheri,
-Vs-
1. The Secretary

New Delhi
3. The Secretary,

INJUNCTION PETITION
For the reasons stated in the accompanying affidavit, it is therefore prayed

that this Hon’ble court may be pleased to grant an order of interim injunction
restraining the 1st respondent from allowing the 3rd respondent in engaging or
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15
participating in 11th Bi-Partite proceedings in any manner whatsoever either

presented in form of “Joint Note” or “Settlement” in the meeting scheduled to be
held on 30.01.2020 as advised by the 1st Respondent pending disposal of the Writ
petition and thus render justice.
Dated at Chennai on this the 28th day of January 2020
COUNSEL FOR PETITIONER
MEMORANDUM OF WRIT PETITION FILED UNDER ARTICLE 226 OF THE

CONSTITUTION OF INDIA
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16

W.P. No. OF 2020
L. Alex,
Kavanur Road,
Potheri,
-Vs-
1. The Secretary

New Delhi
3. The Secretary,

WRIT PETITION
The address for service of all notices and processes on the petitioner is that
that of his counsels, P.CHNADRASEKARAN, P.VENKATRAMAN, C.MEERA
ARUMUGAM & M.SANKARI having office at No.231, Addl. Law Chambers,
High Court, Chennai 600 104.
The address for service on the respondents is as stated above.
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17
For the reasons stated in the accompanying affidavit, it is therefore prayed
that this Hon’ble court may be pleased to issue a Writ of Mandamus or any other
writ, order or direction of a like nature forbearing the 1 st respondent from allowing
the 3rd respondent in engaging or participating in 11th Bi-Partite proceedings in
any manner whatsoever either presented in form of “Joint Note” or “Settlement”
in the meeting scheduled to be held on 30.01.2020 as advised by the 1 st Respondent
without authorizing or giving Legal status to the 3 rd respondent to negotiate or
arrive at settlement with representatives of Bank Employees (Unions) since the 3rd
respondent is merely an Association of Indian Banks and not an institution of
either Government or Quasi Government and also in view of the fact that the 3 rd
respondent is not amenable to Writ Jurisdiction as held by the Hon’ble High Court
of Bombay in W.P.No.2796 of 2005 and W.P.No.1338 of 2006 dated 06.09.2018
and pass such further or other orders as this Hon’ble Court may deem fit and
proper in the circumstances of the case and thus render justice.
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18

W.P. No. OF 2020
L. Alex,
Kavanur Road,
Potheri,
-Vs-
1. The Secretary
& 3 Others … Respondents
INDEX TO TYPED SET OF PAPERS

Sl.No. Date Description of Document Page No.
1. 05.06.2017 Charter of Demands
2. 06.12.2017 Office Memorandum issued by 1st
Respondent
3. 06.09.2018 Order made in W.P.No.2796 of 2005 and
W.P.No.1388 of 2006
4. 29.01.2019 Counter filed by the 4th respondent in W.P.
(MD) No.19947 of 2018
5. 08.08.2019 Code on Wages -2019 Act
6. 27.11.2019 Counter filed by the 3rd respondent in W.P.
(MD) No.22161 of 2018
7. 21.01.2020 Letter issued by the 3rd Respondent
8. 28.01.2020 Letter issued by the 3rd Respondent for
meeting
Certified that the above are true copies of their originals
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19

W.P. No. of 2020
L. Alex,
Kavanur Road,
Potheri,
-Vs-
1. The Secretary
& 3 Others … Respondents
DATES AND EVENTS

Sl.No. Date Description of Document
1. 05.06.2017 Charter of Demands on Wage revision submitted by
the representative of officers Association to the 3 rd
respondent
2. 06.12.2017 Office Memorandum issued by 1st Respondent
establishing equivalence of post in Central Public
Sector Undertakings, Banks with Post in Goverment
3. 06.09.2018 The Hon’ble High Court of Bombay in W.P.No.2796
of 2005 and W.P.No.1388 of 2006 has held that the
3rd Respondent is not amenable to Writ Jurisdiction
4. 29.01.2019 Counter filed by the 4th respondent in W.P. (MD)
No.19947 of 2018 supporting the Wage Revision
should be fixed based on the Minimum Wages
principles
5. 08.08.2019 Code on Wages -2019 Act
6. 27.11.2019 Counter filed by the 3rd respondent in W.P. (MD)
No.22161 of 2018 stating that they are only
“Facilitators’ and “ have no authority of its own either
to agree or decide in fixing the salary “….. (of Bank
Officers)
7. 21.01.2020 Letter issued by the 3rd Respondent requesting
representatives (Unions) of the Bank Employees not
to go on strike
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20
8. 28.01.2020 Letter issued by the 3rd Respondent requesting the 4th

Respondent and 8 other Bank Employees Union to
attend the meeting by their authorized representative
on 30.01.2020 at 11 A.M. before the Chairman
Negotiating Committee of the 3rd Respondent
SYNOPSIS
1. It is submited that the petitioner had joined the services of Canara Bank on
04.10.1982. After rendering 35 years of service in Canara Bank, he was
superannuated on 31.01.2018 as Manager. It is further submitted that I submit
that the 11th Bipartite settlement which fell due from 1st day of November
2017, and he retired on 31.01.2018 after the due date of the 11 th Bipartite
settlement. Hence he will automatically be a beneficiary if any wage
revision, Settlement is signed by the United forum of Bank Unions
representing the bank employees and officers with the 3rd Respondent.
2. It is submitted that the overall controlling authority for Banks including the
service conditions and fixation of salary vests with the 1 st Respondent further
the Managerial and the Supervisory staff employed in Banks are covered under
the Code on Wages-2019 Act which came into force by Gazette Notification
on 8-8-2019. The 2nd Respondent is the implementing authority for the Act.
3. It is submitted that the 3rd Respondent, after having signed 10 bi-partite

settlements so far since the year 1962 with Bank men Associations and after
having held for the past two years, more than 35 rounds of negotiations with
Bank Officer Associations in the current 11th bi-partite process, has now
changed their stand as a “Facilitator”. It is to every ones’ knowledge that the
3rd Respondent in Writ Petition W.P.(MD).No.22161 of 2018 pending before
the Hon’ble Madurai Bench of Madras High Court, have filed their Counter
wherein they solemnly affirmed in their affidavit that they are only a
“Facilitators’ and “ have no authority of its own either to agree or decide in
fixing the salary “….. (of Bank Officers).
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21
4. It is submitted that a facilitator shall come into picture only when the parties to
the dispute agree for his role as per the terms of the contract or as per the
Arbitration Act so as to resolve the dispute between them within the specified
time frame agreed by the parties. But the Unions and/ or the Bank
managements had never entered into an agreement for the role of 3 rd
Respondent as the Facilitator. The self-declaration by the 3rd Respondent as a
facilitator raises the question as to who is sitting on the other side of the
Unions to accept Union’s demands. All along, the 11 th bi-partite salary
revision negotiations are held between Bank Officers Associations on the one
side and the Bank managements namely the 3rd Respondent as the opposite
rival side party. More so, the 3rd Respondent even after filing their affidavit by
claiming themselves as a Facilitator, continues to negotiate with the employees
as the opposite party status of employer. This dual role intended by the 3rd
Respondent to remain as the Facilitator tagged to the employer status is
arbitrary, illegal and unconstitutional.
5. It is submitted that by not considering the Code on Wages-2019 Act and by

implementing the 7th C.P.C. minimum pay fixed for each cadre, if the 3 rd
Respondent is allowed to proceed to fix the pay, it shall in turn impose an
unrealistic relativity Load norms thereby putting into cold storage the Union
Cabinet decisions on equating the J.M.G.-Scale-1 pay with that of the Group -
A officers in Govt. Sector much to the detrimental of J.M.G.- Scale -1. It is
submitted that as the Fourth respondent is determined to finalise the 11 th bi-
partite settlement by ignoring the Union Government’s Notification with
regard to their equivalence of income with Group “A” , and as the 3 rd
Respondent’s actions are much to the detriment of Bank officers and is in
against the Code on Wages-2019 Act and is violative of Article 14 of the
Constitution of India further the 3rd respondent is proceeding further and called
for an meeting on 30.01.2010 and hence I and hence the petitioner approaches
this Hon’ble Court.
Dated at Chennai on this the 28th day of January 2020.
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22
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A11
AINBOF Strike
Notice
<< 298 >>

<< 299 >>
<< 300 >>
ALL INDIA NATIONALISED BANK OFFICERS’ FEDERATION (AINBOF)
STRIKE NOTICE/ 2020/01 Place: Chennai

Date: 13th January, 2020
FORM – 1
NOTICE OF STRIKE
NAME OF UNION: ALL INDIA NATIONALISED BANK OFFICERS‟ FEDERATION (AINBOF)
NAMES OF ELECTED REPRESENTATIVES

1 Shri. Sunil Kumar, President, AINBOF
2 Shri. G V. Manimaran, General Secretary, AINBOF
Dated the 13th January, 2020
To
The Chairman
Indian Banks‟ Association
World Trade Centre, Cuffe Parade
Mumbai
Sir,
In accordance with the provisions contained in sub-section (1) of Section 22 of the Industrial Dispute Act 1947,
we hereby give you notice that AINBOF, a conglomeration of Officers’ Unions/Federations in
Nationalised Banks under the umbrella of All India Bank Officers’ Confederation (AIBOC), propose to go
on STRIKE from 31st January, 2020 to 01st February, 2020, from 11th March, 2020 to 13th March, 2020
and INDEFNITE STRIKE from 01st April, 2020, on the following issues:
Opposing 1 Mergers & Amalgamations in banking sector as it is a prelude for privatization.

Demanding6 2 Expeditious Wage Revision as per Minimum Wages formula adopted in CPC, equivalent to
wages paid to Grade-A officers of Central Government.
3 Merger of Special Pay Component with the Basic Pay
4 Introduction of Running Scale of Pay
5 Introduction of 5 day week in full
6 6 Uniform definition of Business Hours, Lunch hours etc in branches, Reduction of cash transaction
hours and Defined working hours for officers
5 7 Settlement of issues pertaining to retirees-Updation of Pension as per RBI formula/Revision of
Family Pension without any ceiling, quantum and percentage; Medical Insurance on par with
serving employees.
8 Exemption from Income Tax on retirement benefits without ceiling
9 Scrapping of NPS and reintroduction of Defined Pension Payment Scheme
10 Allocation of Staff Welfare fund based on Operating Profits

11 Introduction of Leave Bank
The Statement of the Case is appended.

Yours sincerely,
(Sunil Kumar) (G.V. Manimaran)

President General Secretary
<< 301 >>

Encl: 1. Statement of the Case
Copy to:
1. Chief Labour Commissioner (Central), New Delhi

2. CMDs/MDs/CEOs of all Nationalised Banks
3. Chief Executive, IBA, Mumbai
4. The Secretary, Department of Financial Services, Govt. of India
Yours sincerely,
(Sunil Kumar) (G.V. Manimaran)

President General Secretary
<< 302 >>

STATEMENT OF THE CASE
1. Whereas, the Government of India on 30th August, 2019 announced merger of Oriental Bank of
Commerce and United Bank of India with Punjab National Bank, Allahabad Bank with Indian Bank,
Syndicate Bank with Canara Bank and Andhra Bank and Corporation Bank with Union Bank of India, thus
pruning these 10 Public Sector Banks in to 4. This decision of the Government of India is without analyzing
the ill effects of earlier mergers of Associate Banks with State Bank of India and merger of Dena Bank and
Vijaya Bank with Bank of Baroda. These earlier mergers have not been beneficial either to the country or
to the customers. Further by merging, these banks have not shown any positive growth and could not
reduce the NPAs as pictured by the Government of India.
Whereas, in response to the strike call given by four officers‟ organizations viz., All India Bank Officers
Confederation (the umbrella body of All India Nationalised Bank Officers Federation), All India Bank
Officers Association, Indian National Bank Officers‟ Congress and National Organisation of Bank Officers in
September, 2019, the Department of Financial Services, Union Ministry of Finance, represented by
the Union Finance Secretary had intervened and assured among other things to constitute a high-
powered committee involving all stake holders and
Whereas the Department of Financial Services, Union Ministry of Finance has failed to comply with all the
assurances given including constitution of a High Powered Committee involving all stake holders and
2. Whereas, Settlement/Joint Note was signed by the Indian Banks‟ Association with the employees‟
unions and officers organisations in the Banks on 25-05-2015 covering revision of wages and
improvements in other service conditions for the period from 1-11-2012 to 31-10-2017 and
Whereas, the operation of the said Settlement/Joint Note was to end by 31-10-2017 and
Whereas, the need would arise to revise the emoluments and service conditions with effect from 1-11-2017
and
Whereas, the Unions and Associations submitted common Charter of Demands to the Indian Banks‟
Association in February, 2017 and May, 2017 with a plea to the IBA to take up the demands for discussions
and early resolution so that the revised pay scales, allowances and service conditions can be implemented
from the due date i.e. 1-11-2017 and
Whereas, having regard to the delay in negotiations and finalising the Settlements in the past, as early as
12-1-2016, the Department of Financial Services, Ministry of Finance, Government of India advised all the
Banks as well as the Indian Banks‟ Association to initiate the process of wage revision and conclude it prior
to the effective date i.e. 1-11-2017 and
Whereas, having regard to avoid the delay in arriving at a settlement, the Department of Financial
Services, Ministry of Finance, Government of India reminded the Banks and IBA several times with their
reminder communications to complete the wage revision process without delay and
Whereas, the IBA commenced the discussions with the Unions on 02-05-2017 with the assurance that the
discussions would be completed by October, 2017 and
Whereas, in the Conciliation Meeting held on 28.05.2018 CLC (Central) had directed that existing system
of settling the wages for officers up to scale 7 to be continued and
Whereas, the Negotiating Committee of the IBA held negotiations with the Unions on various dates, the
latest being on 13th January, 2020 and
<< 303 >>

3. Whereas, there have been several attempts to create a smoke screen to divert attention from the
real issues that continue to surround and plague the banks. The core issues are highlighted as below:
1 Mergers & Amalgamations in banking sector as it is a prelude for privatization.

2 Expeditious Wage Revision as per Minimum Wages formula adopted in CPC, equivalent to wages paid to
Grade-A officers of Central Government.
3 Merger of Special Pay Component with the Basic Pay
4 Introduction of Running Scale of Pay
5 Introduction of 5 day week in full
6 6 Uniform definition of Business Hours, Lunch hours etc in branches, Reduction of cash transaction hours
and Defined working hours for officers
5 7 Settlement of issues pertaining to retirees-Updation of Pension as per RBI formula/Revision of Family
Pension without any ceiling, quantum and percentage; Medical Insurance on par with serving employees.
8 Exemption from Income Tax on retirement benefits without ceiling
9 Scrapping of NPS and reintroduction of Defined Pension Payment Scheme
10 Allocation of Staff Welfare fund based on Operating Profits

11 Introduction of Leave Bank
1. Mergers & Amalgamations in banking sector:
We strongly oppose and protest the Government‟s move of merger/consolidation of Public Sector Banks,
which was announced on 30th August 2019. In the name of consolidation, number of Banks are being
reduced. The advantages have been misquoted. Just adding two balance sheets will not make a resultant
balance sheet stronger. It is very evident, from across the experiences globally, that bank mergers have
never been a success. On the other hand, Mergers and Acquisitions created huge organizations, too-big-
to-manage and have a detrimental effect on the economy as a whole. In the garb of branch
rationalization, branches will be closed, which is evident from the recent announcement of the merged
Bank of Baroda to close down numerous branches of the erstwhile Vijaya Bank. We have also seen this
when Associate Banks were merged with State Bank of India. In the name of rationalization, right-sizing
of human resources, Voluntary Retirement was offered, which is nothing but instigated termination of
services and loss of employment to millions who are directly or indirectly connected with the Public
Sectors Banks. In addition, such situation creates tremendous pressure on the officers and staff who are
continuing in service as they have to manage the work-load of the personnel who retired voluntarily, also.
These will have cascading effect on customer services and deprive banking facilities to the common and
needy populace.
Mergers and Acquisitions will result in the monopoly of the banking environment in the country. Every
monstrous component of monopolistic environment surfaces and affects customers – like depriving
banking next door due to closure of branches, rise in charges and fees, fewer banks, fewer products, less
competition and ultimately, deterioration in customer service. The mergers would result in driving the loyal
customers of public sector banks into the fold of new generation private sector banks and NBFCs, which
would be inimical to the interest of the common man as they will have to shell out more for basic banking
services.
The core problem faced by the Indian banking industry is the enormous pile up of NPAs that have
accumulated on account of faulty lending practices, absence of any effective strategy to recover the
amounts from corporate houses and large borrowers and the volatile IRAC norms which are deliberately
being changed frequently by the regulators to ensure that PSBs do not earn net profit at all.. The much-
publicized Insolvency and Bankruptcy Code (IBC) process has not succeeded in recovering NPAs. On the
other hand, it has resulted in substantial haircuts, leading to losses in banks and undue benefits to Willful
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Corporate Defaulters. The absence of strong penal action against the corporate willful defaulters and
fraudsters reflect the lack of political will on the part of the Union government and exploitation of inherent
system weaknesses by large borrowers than anything else.
In this backdrop, the announced merger/amalgamation of public sector banks is nothing but a diversion
away from the core issue of NPA recovery and the overall economic situation of the country. Mergers
cannot resolve or clean up the balance sheets; rather the NPAs of the merged entities would simply add it
up. The improvement in certain ratios, if any, would amount to mere financial engineering and a mis-
adventure, without resolving the actual problems. The recent experience of merger of the SBI Associates
with the SBI has already led to humongous losses and NPA accumulation subsequent to merger. The
results of the combined entity formed out of merger of Bank of Baroda, Vijaya Bank and Dena Bank for
the first year of operation are yet to come. Yet, the Finance Ministry seems to have learnt no lesson from
it. In a note to the parliamentary Estimates Committee on Bank NPAs, former RBI Governor Dr.
Raghuram Rajan had termed bank mergers as a “non-solution” to the NPA problem.
The organizational disruption arising out of mergers would relegate every other activity to the backstage.
Banks involved have to invest their precious time to do fire-fighting for next few years, in order to integrate
personnel, processes and procedures adversely affecting other banking activities. Mergers will result in
different classes of officers & staff within same organization. The industrial relations within the bank is
bound to affect not only the officers & employees, but ultimately the very functioning of bank. The
announcement of mergers will in no way contribute to the ambitious $ 5 trillion economy of the
government as Public Sector Banks are expected to drive the growth engine. In fact it would definitely
derail the progress towards the target because of the reduction in the number of branches of the Public
Sector Banks.
Hence, taking into consideration the overall welfare of the people of our country and towards building a
healthy economic environment, we urge that mergers, amalgamation, consolidation and any such
proposals be scrapped.
2. Expeditious Wage revision as per Minimum Wages formula adopted in CPC, equivalent to wages
paid to Grade-A officers of Central Government.
Negotiations have not been carried out on the lines of the Charter of Demands submitted by us, which is
based on minimum wages concept. IBA has not shown inclination, in letter and spirit, to conduct meaningful
negotiations based on the basic principles on which our Charter of Demands were arrived and submitted –
i.e., minimum wages concept, delinking from paying capacity, equal work-equal wage, external parity, spirit
of Pillai Committee Report to restore parity with civil service officers, against unscientific categorization of
branches, to provide conducive and globally accepted norms in working environment to women officers,
uniform perks and facilities in the Industry, improvement and updation in pension to ensure a decent retired
life to the officers, running scale of wages, rolling back to bank-level 100% medical reimbursement facilities
for officers and the dependents etc. With utter dismay, it is being observed that the negotiation is being
attempted by IBA completely bypassing what is stipulated in the charter of demand. Rather, new-fangled
words/ other extraneous factors viz. Performance Linked Pay/ Incentive based on gross operating profits
and Return on Assets are being tabled. We demand wage revision only as per the charter of demand
submitted.
In the light of the ambitious $5 trillion economy, the Bank officers are expected to a major role in driving
the growth engine and have to shoulder humongous workload to fulfil such expectations, which they have
been doing despite acute shortage of manpower and other constraints. It is the bank officers who are
implementing all the schemes of the government through their dedication, diligence. Hence, we demand
that bank officers deserve equity and justice.
<< 305 >>

3. Merger of Special Pay Component with the Basic Pay
At the time of signing the previous Joint Note in the year 2015, a new component in the Pay Structure viz.,
Special Pay was introduced. This amount was not meant to be taken for the purpose of pension. This has
caused huge reduction in the Pension who have retired since 2012. It has been held by various courts of
law that Pension is not a charity and is a deferred payment of salary. In that situation, the concept of
Special Pay is to be revisited and has to be compulsorily merged with the Basic Pay so that the Officers are
not deprived of the Pension resulting out of the said component.
4. Introduction of Running Scale of Pay
The Group „A” Government officers are getting their increments uninterruptedly whereas in case of the
bank officers the increments are linked to promotions which would otherwise reach stagnation in case of
non promotion. Further, the promotions are not in the hands of the individual bank officers and it purely
depends on the Individual Banks performance and presence of the branches which also would vary bank to
bank.
Besides, on stagnation, the 7th Pay Commission notes, “The new pay structure has been laid out by and
large broadly as an open ended, layered matrix, for civilians as well as for the armed forces
personnel. It has been kept in view that a person should not stagnate but should have fair
opportunity to progress by dint of merit and secure better emoluments so that frustration does not
set in”.
5. Immediate introduction of 5-day week in full
The 4 officers‟ organisations have submitted a substantiated and logical reasoning for introduction of 5 Day
week Banking. Across the globe 5-day week is a norm. Even in our country, most of the progressive,
forward-looking corporates, organizations, Government and quasi-Government Organizations have been
functioning 5 days a week, which enables the officers and employees to have balanced work life so that
they are motivated and can contribute significantly.
With the focus on digital banking, Alternate channels, Internet Banking, POS facilities, on-line payment
systems have led to the augmentation of digital transactions. As such, declaring remaining Saturdays as
holidays will have no impact.
6. Uniform definition of Business Hours, Lunch hours etc in branches, Reduction of cash
transaction hours and Defined working hours for officers
Now, banks are conducting cash transactions till one hour prior to close of office hours. Thus, the branches
are left with only one hour to aggregate, verify and complete the process of cash counting, re-counting and
lodging into the vault. This has a telling effect on closure of the branches for the day, elongating working
hours of officers, constraining them to overstay in the branches. Now a very substantial numbers of bank
branches are single officer branches. Till the closure of cash, officers will be constrained to handle cash
related transactions and are confined to the desk, depriving of much required attention to other areas like
lending, business development and compliance related work.
Now that ATMs have been deployed in every part of the country with high density, digital banking like
internet banking, mobile banking has occupied pivotal place in transactional banking. Further, the
Government has been propagating digital and electronic banking in a big way to reduce the importance
and volume of physical cash transactions. In view of these, it would be in fitness of things to reduce the
cash transaction hours to 4 hours. This will have the following advantages:
<< 306 >>

a. Dependency on cash in the society will be reduced
b. Citizenry will adopt better and faster digital, electronic mode of banking
c. Will bring down the cost of operations of banks, paving way for reduced service charges
d. Will bring down the cost of printing currency and its management by Reserve Bank of India
e. Provide much needed time to operating functionaries to complete the day‟s work well on time.
f. Enable officers to engage themselves in compliances and business development activities.
Apart from the above, every Bank has its own time of functioning and the customers are confused with the
bank timings. While the banks are supposed to work on specific days and have common holidays, it is but
logical for the public to expect that they work on common timings too. Few banks do not even provide
specific lunch timing to their staff. To avoid confusion among the public, it is required that all banks adopt
uniform business hours including fixed and defined lunch break for the Officers.
While the office hours of banks are well defined, officers have been subjected to unregulated working
hours. Each officer in the industry is made to work unreasonably beyond office hours. While it is an
accepted international norm that one cannot work efficiently, applying mental faculty, beyond 8 hours,
officers are forced to work for 10-12 hours a day, exposing not only the officers to health risks, but also
multiplying the consequential operational risks to the banks. Longer working hours have negative impact on
the level of performance, quality of decision, culture of the organization and the industry, in addition to
enslaving him to work, discarding familial and social obligations.
IBA/Government has not shown any demonstrative inclination on the issue.
7. Settlement of issues pertaining to retirees - Updation of Pension as per RBI formula/Revision of

Family Pension without any ceiling, quantum and percentage; Medical Insurance at par with
serving employees
Retirees of the banking Industry are the worst hit. Their basic pay is frozen on the date of
superannuation, and is never revised in subsequent Bipartite settlements/ Joint Notes. Worst kind of
discrimination is prevailing amongst different groups of retirees in the matter of payment of Dearness
Allowance. Pension on Special Grade Pay is denied. Family Pension to the spouse of the deceased
employees is too meagre depriving them to lead even a minimum level of dignified life. Although Bank
Pension Regulations are framed on the lines of RBI/ Central Government Pension Scheme, no steps
have been taken to remove the discrimination in respect of updation of pension/ family pension and
place it at par with RBI/Central Government employees.
Steep increase in medical insurance premium: Similarly, a meaningful medical insurance scheme
needs to be introduced to take care of the ones who have contributed the major part of their life to the
Organisation. Regarding Medical facilities for the retirees our objections have been that:
 The policies for serving employees and Retirees have not commenced from a common date as was
suggested.
 Retirees have not given multiple options to choose from i.e. coverage of Rs 1 lakh, Rs 2 Lakh, Rs 3
lakh and Rs 4 lakh to broaden the coverage of the policy. This flexibility needs to be extended for the
super top up policy also.
 The premium imposed for medical treatment in respect of officer retirees is absolutely unfair, illogical
and unacceptable. It appears that this pricing has been fixed in such a manner so as to drive away
the retirees from the purview of the scheme. This issue requires immediate intervention and suitable
initiatives to be taken for logical reduction of premium.
 Our suggestion for lesser premium rate for single beneficiary like family pensioners, etc. has been
ignored.
<< 307 >>

 IBA should send communiqué to all Banks to subsidise/bear the Insurance premium of Retirees as is
done for EDs/MDs of Banks as most retirees are likely to face extreme difficulty in arranging funds
for the renewal.
 IBA may advise member banks to give interest free loans to retirees recoverable in easy instalments
for payment of premium.
The spirit of the Department of Financial Services‟ communication to IBA and Banks to design a suitable
insurance scheme to both retired and service should be interpreted that it is a direction to extend such
benefits to staff till their life time. As such viewing retired officers / employees as a separate lot and
collecting more premium from them, amounts to exploitation. Instead this should be considered as an
extended benefit to the retired employees / officers who have put in their heart and soul for the
development of the Bank. It would be more prudent, logical, legal to view the entire bank employees as one
lot and calculate the premium by carrying out an actuarial analysis instead of treating the serving and
retired as different group.
Also, with more than two third of the our bank‟s workforce in the age group of below 35 years, which was
not so at the time of introduction of the subject scheme, the premium is bound to come down and there will
be parity in the premium charged for serving employees and the retired employees.
Our other suggestions were that a comprehensive affordable health care policy covering the interest of
bank men (both Serving & retiree) should be negotiated upon. It is also suggested that instead of annual
renewal, the policy should co-terminate with the validity of wage settlement period with further provision of
renewal on payment of pro rata premium post termination of policy date and delay in finalisation of future
wage accord. IBA should also approach the Ministry of Finance to exempt GST on Banks‟ health care
policy being a part of staff welfare measure not strictly falling within the definition of business transaction.
IBA has not addressed the issues raised by us and unilaterally implemented the revised scheme.
8. Exemption from Income Tax on retirement benefits without ceiling
At present the contribution towards the Provident Fund is exempt from Income Tax at the hands of the
Officer who has retired. Similarly Gratuity is exempt from Income Tax to a maximum amount of Rs. 20 lakh.
Encashment of the Privilege Leave is exempt from Income Tax to a maximum amount of Rs. 3 lakh. It may
be observed that these amount have accrued from the deferred amount of salary payable to such officers. It
may also be noted that all these amounts in a way contribute to the “Internal Borrowings” to the exchequer
since these amounts are available to the Government in such a way. Hence all the retirement benefits
received at the time of retirement by an Officer should be exempted from the purview of Income Tax. It is but
natural that such a person will continue to pay Income Tax on the income earned out of such benefits in the
consequent years,
9. Scrapping of NPS and reintroduction of Defined Pension Payment Scheme
Pension under National Payment System (NPS) is not defined and hence uncertain. In existing Pension
scheme in Banking Industry, Pension is pre-determined. But in NPS, while contribution is determined, the
return is not defined. It depends on the capacity of the fund to generate return causing frustration
amongst those who were recruited subsequent to April 2010. In NPS, an employee has to indicate his risk
appetite at the time of joining in the fund viz. Low risk, Medium Risk and High Risk. But as no switching is
allowed, and the performance of the fund may vary depending upon risk pattern indicated at the time of
joining, the market behaviour will determine the Pension to be received by an employee. Further, the
contribution is made @10 % of Basic Pay + DA of the concerned employee leading to a huge
accumulation of fund. But the rate of return on any established fund sometime shows negative return over
a time horizon leading to apprehension that at the time of retirement the corpus fund may not be sufficient
to generate a pension benefit befitting the living standard at that particular time. Pensionary benefits are
vital for the leading a dignified life post-retirement and should not be left to the vagaries of capital market.
<< 308 >>

Removal of uncertainty is pre condition for ensuring whole hearted alignment with job and for this
superannuation benefit should be defined. There has been no initiative on the part of IBA and
Government to review NPS.
10. Allocation of Staff Welfare fund based on Operating Profits:
The officers of all Banks contribute their blood and sweat to bring in new business to their respective banks
and to achieve their corporate objectives. All the efforts put in by them yield the profits for their banks. As per
the present guidelines prevailing, various provisions are being made out of the operating profit earned and
the net profit is arrived. Based on this net profit the respective Banks come out with different Staff Welfare
Schemes to benefit their staff.
It is to be noted that the officers as well as the award staff give their best to their organisation and they are
responsible for the operating profit earned by their bank. Out of the policies framed by the Government
provisioning is made for which the officers and staff are not at all responsible. Hence, it would be logical to
meet out the expenses of the Staff Welfare Schemes from the operating profit of the banks.
***************
<< 309 >>

A12
AIBOC
Affidavit
<< 310 >>

t
(
BEFORE THE MADURAI BENCH OF MADRAS HIGH COURT
W.P.(MD) NO.19947 OF 2018
S. Dhanasekar
S/o M.M. Subramanian
Plot No.130 l'.r
S.R.V. Nqgar Main Road

Thirunagar
Madurai- 625006
Petitioner
-Vs-
The Secretrary, lndian Banks'Association & Ors'
Respondents
couNTER THE RE9PONDENT NO' 3

^FFIDAVITOF
l,soumyaDatta,SonofLate'ManabDattaagedaboutS6years'by
occupation - Service-hotder and working for gain at State Bank of lndia do
]tl
hereby solemnly affirm and sincerely state as follows:-
1 lamtherespondentno.3hereinandlamwellacquaintedwiththe
facts and circumstances of the case'
2. I have gone through a copy of the writ petition appearing to have
been affirmed on 17th Septembe'r, 2018 and I hav.e understood the
meaning, intent and purport thereof'
petition
3. I crave leave of this Hon'ble Court not to deal with the writ
paragraph-wise; rather to express the stand of All lndia Bank officers'

Confederation on the issue involved.
4. I say that irr banking industry, for the officers,:certain conditions of
service are negotiated in an industry-wise manner, culminating in
J
<< 311 >>
ffirARr
,
setilement, at . a lever (commonry known as Apex Level) through the

. , +--)^ I t-l
representing the
participation of various Apex Level Body of Trade unions
cause of the officers on the one hand and lndian

Banks'Association on the
settlements bind the

other hand. lt is worth mentioning that such bipartite
rservice conditions of ofiicers not only in nationalized banks' but also in
Regional
many old generation private banks andlor banking companies,
Rural Banks which come under the lndian Banks' Association'
by All
5.. A joint charter of demands was submitted on 5s June, 2017
,arct llnnfaderafio
lndia Bank Officers' Confederation (AIBOC)' All lndia Bank Officers'
I
,tr tFiA/|\ -
(INBOC) and
Association (AIBOA), lndian National Bank fficers'Congress
National Organisation of Bank Offtcers (NOBO)' Copy of

the said charter of
demands is annexed and marked as "R-1"'
The charter of demands envisages not only revision of salary

and
6.
Farc Conession'
allowances, but also medical facillties, perquisite, Leave
sup€rannuation
Leave Travel Concession, issues conceming lady ofii@rs,
action,
benefits, non-monetary issues, like appointment, disciplinary
bilateral relation, disciplinary and vigilance proceedings.
7. I state that in the matter,of revision of salary and allovrlances, this

Trade unions
time demand has been raised by all the four apex bodies of
to en$ure relativi$ with minimum salary in line with central Govemment

the
Group-A Officers' initial pay. The charter of Demand has addressed
qeed to align our wages on the concept of 'Minimum wages'.
the
On that sgore, the claim made by the writ petitioner is in line with
petitioner is a
subiect matter of charter of demands under negotiation' The
JMGS-I officer and a merhber of 'the Ganara Bank fficsrs' Assoclation'
The said Association is affitiated to AIBOC'
<< 312 >>1,'..

Affi
\ fereoc)
I
3
1r
8. ln banks, Service conditions of officers have been historically

process for a few decades' This also
d'etermined through the negotiatory
maintenanc€ of a harmonious
helps in economic growth of the country and
bilateral relationship to augment optimum utilization

of workforce at the
officers'level.
negotiation was
9. tt is stated that in relation to the charter of demands,
held on 20s July, 2017,27th October,2017,sth

May,2018,30th July,20{8,
2gth september, 2018, 1zth Octobei, 2018

and 30th Novembei, 2018 which
Banks, IBA representatives in

was participated by representatives from the
theNegotiatingCommittee'TheBanksaremostly,representedby
Executive officers or Deputy
chairman-cum-Managing Directors or chief
lndia)'
Managing Director (for State Bank of
service conditions of officers

10. The charter of demands pertains to the
I (JMG-|) to Top Executive Grade
vll
from Junior lyanagement Grade scale
oEG-Vll).
ll.lfurthermoreSaythatpresentlytheratioofpayofofficersofbankin
per the subsisting 10s Bipartite
relation to the subordinate cad1e, as
offtcers is 2'47 time that
set$ement is 1:2.47;that is to say that basic pay of
of the basic PaY of sub-staff'
as 1:3'11' keeping in line

The present demand is to revise such ratio
employeBs as per the
with the minimum salary of central Government
grades of officers in the Banks
minimum wages concept. There are various
andinallthepreviousbipartitesettlementstheyhavebeengranted
different revision of salaries'
12. On-going negotiation process over the charter of demands
4 Apex Body'Trade unions will determine the

service
submitted by the
conditions of officers of Banks of various

grades and levels'
'Yv's' t
<< 313 >>

Wnnr
I
,
13. ln the 116 Bipartite Settlement negotiation, there has been a demand
raised by alt the 4 Trade Unions representing officers of the banks to get
minimum salary in line tvtth Gr. A officers in the Central Govemment

service.
14. The statements contained in foregoing paragraphs 1, 2, 3, 7, 10 are
true to my knowledge, those cohtained in paragraphs 4, 5, 6, 8, 9, 11 and
13 based upon information derived from the records of the Association and
rest is my respectful submission to this Hon'ble Gourt.
SOLEMNLY AFFIRMED AT CALCUTTA ON

THIS DAY OF 21+TNNUARY, 2A19 AND SI GNED
HIS NAME IN MY PRESENCE.
n
<f;a^f -Y?L,&^
Soumyd Majumder
ADVOCATE CALCUTTA
ENROLMENT NO. WB./1 31 9/95
ADDRESS: 6, OLD POST OFFICE STREET,
ROOM NO.63
KOLKATA.TOO OO1
<< 314 >>

<< 315 >>
MADURAI DISTRICT
!
IN THE HIGH COURT OF

JUDICATUNT UNDRAS
MADURAI BENCH
W.P.(MD) NO. L9947 OF 201-8
\
Ir
COUNTERAFFIDAVIT OF
THE R ESP ONDENT .3
v.CHAN DRASEKAR Bsc-,B.1 tgrglrggo)

&
I zotzl
A. DAVI D OLIVER (Ls7 3
1s7,MAHARANI DELUXE
VAIAR NAGAR
MADURAI
9443t50129
<< 316 >>

A13
CBOA
Counter Affidavit
<< 317 >>

1

MADURAI BENCH
[Special Original Jurisdiction]
W.P.(MD)No.22161 of 2018
R. Saravanan M/A 30 years,

S/o. M. Ramaiah Pillai,
BF3, Aparna Garden,
Velmurugan Nagar,
Bye Pass Road,
Madurai – 625 003. … Petitioner
-Vs-
1. The Secretary,
Indian Banks‘ Association,
World Trade Centre, 6th Floor,
Centre-I Building, Cuffe Parade,
Mumbai – 400 005.

M/s.Canara Bank,
Human Resources Wing,
112, J.C.Road, Head Office,
Bangalore – 560 002.
3. The General Secretary,

All India Bank Officers‘ Confederation,
6th Floor, E-Block, Samriddhi Bhavan,
1, Strand Road,
Kolkata – 700 001.
4. The Secretary,
Department of Financial Services,
Ministry of Finance, Government of India,
2nd Floor, Jeevan Deep Buildings,
Sansad Marg,
New Delhi – 110 001.
5. The General Secretary,

Canara Bank Officers‘ Association,
216, Royapettah High Road,
Royapettah, Opp. Deccan Plaza Hotel,
Chennai – 600 014.

Canara Bank, Circle Office,
St.Marys Campus, East Veli Street,
Madurai – 625 001. … Respondents
Page 1
Corrns.
<< 318 >>

2
COUNTER AFFIDAVIT FILED BY THE 5TH RESPONDENT
I, G.V.Manimaran, S/o. Gurusamy Varadharaj, aged 57

years, holding the position of General Secretary of Canara
Bank Officers‘ Association (Regd) and having its principal office
at Royapettah, Chennai–600 014, having temporarily come
down to Madurai, do hereby solemnly affirm and sincerely state
as follows :
1. I submit that I am the 5th respondent herein and as

such I am well acquainted with the facts of the case and I am
filing this Affidavit on behalf of Canara Bank Officers‘
Association (CBOA- in short). I read over the Affidavit petition
filed by the petitioner herein. I submit that the following are the
underlying facts and the prevailing facts in answer for the
petitioner‘s averments.
2. It is submitted that the fifth respondent CBOA is the

overwhelming majority organization of officers employed in the
Second respondent Canara Bank. It is further submitted that
the fifth respondent CBOA is the only recognized officer
Association in Canara Bank to finalise and settle with them all
the issues concerning officers other than the salary structure.
3. It is submitted that the salary structure is finalized by

the first respondent viz., Indian Banks Association (I.B.A. - in
short) which is the association of Bank managements by
holding negotiations mainly with the All India Bank Officers‘
Confederation (AIBOC – in short), the third respondent herein.
The third respondent AIBOC is the major non-political majority
apex body of various Officers‘ Associations affiliated to it and
the fifth respondent CBOA is an affiliate of the third respondent
AIBOC.
Page 2
Corrns.
<< 319 >>

3
4. It is submitted that in the year 1974, the Union

Government constituted the Pillai Committee to formulate the
external relativity of salary between bank officers and Group ‗A‘
officers of the Central Government and also to bring about
equality in officers salary amongst banks. Pillai committee was
constituted by the Government and was made applicable to
officers in banks who form the managerial and supervisory
cadre.
5. It is submitted that the P.C.R. was implemented in

banks with effect from July 1, 1979, and the pay scales of the
lowest rung of officers in banks were fixed on par with the pay
scales of the lowest rung of Group ‗A‘ officers of the Central
Government and both of their minimum starting pay was kept
at one and the same of Rs.700/- in the year 1979.
6. It is submitted that prior to the implementation of

P.C.R., since the year 1979, in some Banks viz., Canara Bank,
Bank of India, starting pay for officers‘ was more than the
Group ‗A‘ officers of the Central Government. As a
standardization move, the Canara Bank, Bank of India officers
were paid the then drawing higher pay till their next annual
increment was due and thenceforth they were fitted in the
corresponding fitment as per the P.C.R. So, even before the
P.C.R., could bring in equivalence of Bank officers pay with
that of Group ‗A‘ Government officers, during the year 1979
Canara Bank Officers were getting higher salary than the Group
‗A‘ officers in Govt. service. However, the parity which was
established by implementing the P.C.R., was not adhered to by
the first respondent –the I.B.A. - in the successive wage revision
settlements for officers.
7. It is submitted that though the Bank Officers were

branded as the High Wage islands in the 1970s, their wage
Page 3
Corrns.
<< 320 >>

4
structure and the consequent pension has steadily eroded over

the years. It is because, in the subsequent wage revision
settlements, the first respondent IBA did not maintain the
external relativity with Group ‗A‘ officers in Government as
formulated by the P.C.R., by taking into account the Central
Pay Commission formula. The maximum disparity took place
when in the Sixth Pay Commission, the salary of Group ‗A‘
officers zoomed past the salary of the bank officers.
8. It is submitted that despite the fact that the external

relativity with Group ‗A‘ Government Officers was not continued
and not implemented for Bank officers, promotion in Banks is
also subject to one‘s performance and not one of accelerated or
automatic promotion that is prevailing in the Government
service.
9. It is submitted that though the P.C.R., gave due

weightage for the financial risk, responsibility, transferability
and accountability for bank officers which is severe, stringent
and deadly harsh, their emoluments in the subsequent wage
revisions does not match to such adverse working conditions
being faced by officers. Thus the existing wage structure and
model being implemented by the first respondent I.B.A., by
disregarding the P.C.R. formula to equate with the Central Pay
Commissions, majority of the officers are struck with Stagnation
of Pay which has further reduced and freezed their eligible
emoluments.
10. It is submitted that the present salary revision for

officers in Banks was due for revision from 1-11-2017.
Therefore, the fifth respondent CBOA after hearing the views of
members submitted the salary revision demand proposals to the
apex Officers‘ Association AIBOC – the third respondent herein
which in turn submitted the officers‘ salary revision Charter of
Page 4
Corrns.
<< 321 >>

5
demands along with three other apex associations‘ to the I.B.A.,

the first respondent herein.
11. The salient features of salary revision proposals as

contained in the officer Apex Association‘s charter of demands
submitted to the first respondent I.B.A., are :
- The expectation of the increasing number of youth who are

joining the banks and their aspirations should be fulfilled. They
are tech savvy, they analyse the markets trends in salary and
allowances, compare with Govt Salary, RBI Salary, LIC salary
and Private Sector. So there is a need to provide better salary
and allowances to attract talents to meet the challenges and to
contribute to the growth of the nation.
- There cannot be any link to paying capacity of the banks

because the gross profit of the Banks and the business are
increasing year by year due to the contribution of the officers
and employees.
- Net profit is down due to mounting NPA for which the

causative factors are the grim global scenario from 2008, ever
changing accounting procedure and standards, Government
and Controllers‘ policies and principles, Country‘s priorities and
preferences and certainly the officers and employees are not
responsible.
- Besides, the objective of wage revision must be to attract

real talents to the Industry and thus it should be constructed
on factors like Risk, Responsibility, Accountability and
Transferability.
- The Pillai committee recommendations were the basic

premise and precursor to the Historical Bipartite settlements,
our endeavour must be to recall and restore the parities we
Page 5
Corrns.
<< 322 >>

6
enjoyed within the banking system and also with the civil
service officers.
- Though the Indian youths entry and employment in to

the Banking sector is through common process, their placement
and promotion is primarily rested on the premise of respective
Bank's presence and business which ultimately decides the pay
and perks. As the promotion and placement is not in the hands
of the large Indian youths joined in the banking industry with
huge educational qualifications and expectations, we must
ensure the running scale up to the end which would at least
keep the officers morale up.
- Bank officers are much more dedicated and perform

duties with greater risk and accountability. So the salary should
be commensurate with the risk and responsibility.
- The charter of demand also incorporated relevant

portions of the Seventh Pay commission‘s and its important
observations.
- Pay commissions are appointed by the GOI headed by

eminent personalities in the field of Administration and Justice
to decide the salary structure for their own employees from the
entry level of lowest cadre in the hierarchy to the level of
Cabinet Secretary – the topmost civil servant in the Govt. Setup.
- The very idea of forming such commissions in a periodical

interval is primarily to carry out a holistic review on the global
socio economic transformations and relate such findings to the
similar scenario of our country and suggest the administrative
reforms to attain such global standards and also to offer
suitable and acceptable compensation to the workforce who are
employed to attain such standards to ultimately compete and
achieve excellence in achieving the objectives.
Page 6
Corrns.
<< 323 >>

7
- the Seventh Pay Commission report, which says, ―What

should be the norms for governance? This has been a moot
point through ages and the norms of the governance have
changed from time to time. If we go to the past history of
ancient India, we have many scriptures which have dealt with
issues of governance and those norms are also relevant in the
present time. Bhagwat Gita tackles many management issues at
the grass root level and offers feasible solutions on the
principles of value-based ethics, enlightened leadership and
human quality development. Bhagawat Geetha says Whatever
action is performed by a great man, common men follow in his
footsteps. And whatever standards he sets by exemplary acts,
all the world pursues. It is further stated in the Gita ―where
there is Dharma there is victory‖ or, in other words, success
goes hand in hand with righteousness. Chanakya also, in his
celebrated discourse ―Arthashashtra,‖ emphasized that the
Dharma Sukti is applicable to both, a ruler and the common
man. It is necessary to follow Dharma in all walks of human life.
Therefore, if we have a dedicated bureaucracy, then they will
provide a good leadership and good governance‖.
- The Seventh Pay Commission also says that, ―In this 21st
century, the global economy has undergone a vast change and
it has seriously impacted the living conditions of the salaried
class. The economic value of the salaries paid to them earlier
has diminished. The economy has become more and more
consumer economy. Therefore, to keep the salary structure of
the employees viable, it has become necessary to improve the
pay structure of their employees so that better, more competent
and talented people could be attracted for governance.‖
- The Seventh Pay Commission has done exhaustive studies

as seen below; ―To gain insight into the principles of
emoluments, workshops were organized in association with IIM,
Page 7
Corrns.
<< 324 >>

8
Bangalore, Administrative Staff College of India, Hyderabad and

SVP National Police Academy, Hyderabad. The local country
office of the World Bank was requested to provide inputs on
best global practices in remuneration. The World Bank team
made several presentations on relevant subjects, viz.,
international trends in public sector pay, allowances, pension
etc.‖ and noted that,
―The expectation of employees in Government will be similar to

the key expectation of employees at all levels is that there
should be a significant increase in their pay and improvement
in other facilities.‖
- ―Representatives of some of the recognised organisations

have staked their claims for grant of a pay structure comparable
to that of the private sector. At the core of this demand is the
economic development, the country has witnessed in recent
times, resulting in the avenues for talented young persons
having opened up; several of them are being employed by the
private sector for emoluments much higher than in the
government sector.
- The Commission bestowed its best of consideration and

has dealt with all the issues in appropriate chapters. It may be
observed at the outset that government service is not merely a
contract service, it provides a status in society which cannot be
monetised in terms of money value.
- The focus for the Commission was that emoluments

should be such which attract the right kind of talent by a
transparent method, keeping in mind the financial limitations of
the government. The attempt has been to provide wages
commensurate with comfortable living.
Page 8
Corrns.
<< 325 >>

9
- The pay structure should also need to address any

significant deterioration in real value of emoluments as a
consequence of inflation.‖―One should get proper and adequate
compensation for his merit. The increase in pay structure
cannot keep pace with the market forces, at the same time it
should not be so unattractive that talent is not attracted to
government service.‖
―Therefore, we have attempted a pay structure which has as its

basis the Aykroyd formula, which reflects the basic average cost
of living in the country. The attempt has been to arrive at a
proper pay package so that the essentials of life can be availed
comfortably.‖
- The Pay Commission says ―While finalising the levels of

salaries, allowances and other perquisites of compensation
structure, we have tried to take a holistic approach. We also
commissioned three studies by expert bodies towards this end
as under ‖
:: Study by IIM, Ahmedabad to understand the nature

and quantum of total compensation of select job profiles in the
government sector vis-à-vis similarly placed profiles in the
CPSUs and the private sector.
:: Study by Institute of Defence Studies and Analyses

on nature, quantum and components of defence expenditure
and defence pension.
:: Study by IIM, Kolkata on fiscal implications of

implementation of the V and VI CPC on the finances of the
Union and State Governments.‖
Page 9
Corrns.
<< 326 >>

10
- On stagnation, the 7th Pay Commission notes, ―The new

pay structure has been laid out by and large broadly as an open
ended, layered matrix, for civilians as well as for the armed
forces personnel.
It has been kept in view that a person should not stagnate but
should have fair opportunity to progress by dint of merit and
secure better emoluments so that frustration does not set in.
- The remuneration package is such that employees would

feel that they are valued and they are fairly paid and their
remuneration is not less than a person who is similarly situated
in another organisation.‖The Pay Commission has also
recommended that there is no need for commission once in 10
years and it recommends as:
- ―It is also recommended that the matrix may be reviewed

periodically without waiting for the long period of ten years. It
can be reviewed and revised on the basis of the Aykroyd formula
which takes into consideration the changes in prices, of the
commodities that constitute a common man's basket, which the
Labour Bureau at Shimla reviews periodically. It is suggested
that this should be made the basis for revision of that matrix
periodically without waiting for another Pay Commission.‖
- On the National Pension System the Commission says:

―We have also kept in view the needs of the pensioners under
the old pension system, (employees who joined before
01.01.2004) and suggested some measures to alleviate their
plight. They should also not be left in straitened circumstances.
- We have suggested their proper fixation in the new pay

matrix which will provide them a respectable living. Almost the
whole lot of government employees appointed on or after
01.01.2004 were unhappy with the new pension scheme.
Page 10
Corrns.
<< 327 >>

11
- While the National Pension System does not form a part

of our Terms of Reference, we have recorded the sentiments of
the affected employees. The government should take a call and
step in to look into their complaints.‖
- It is pointed out in the charter of demand that the basic

essence of pension as listed in the pensions regulations 1995,
section 35 (it is for employees retired between 1.1.86 &
31.10.87) and the various court's judgements must be effected
in letter and spirit as the pension is not the gratis and it is the
basic right of an officer who dedicated his life and career for the
Institution and the pension updation and improvement in
family pension must be settled.
- The Commission also talks about salary based on the

status in the society. It says, ―As we have mentioned above,
government service is not a contract. It is a status. The
employees expect a fair treatment from the government. The
States should play role model for the services. In this
connection, it will be useful to quote the observations in the
case of Bhupendra Nath Hazarika and another vs. State of
Assam and others (reported in 2013(2)Sec 516) wherein the
Apex Court has observed as follows:‖ It should always be borne
in mind that legitimate aspirations of the employees are not
guillotined and a situation is not created where hopes end in
despair. Hope for everyone is gloriously precious and that a
model employer should not convert it to be deceitful and
treacherous by playing a game of chess with their seniority. A
sense of calm sensibility and concerned sincerity should be
reflected in every step. An atmosphere of trust has to prevail
and when the employees are absolutely sure that their trust
shall not be betrayed and they shall be treated with dignified
fairness then only the concept of good governance can be
concretised. We say no more.‖
Page 11
Corrns.
<< 328 >>

12
- As regards the Minimum Pay requirement, the VII

Central Pay Commission (CPC) used the norms set by the 15th
Indian Labor Conference (ILC) in 1957 to determine the need-
based minimum wage for a single industrial worker. The norms
set by the ILC are as below:
: A need-based minimum wage for a single worker

should cover all the needs of a worker's family. The normative
family is taken to consist of a spouse and two children below
the age of 14. With the husband assigned 1 unit, wife, 0.8 unit
and two children, 0.6 units each, the minimum wage needs to
address 3 consumption units.
: The food requirement per consumption unit is shown in

the Annexure to this chapter. The specifications were derived
from the recommendations of Dr. Wallace Aykroyd, the noted
nutritionist, which stated that an average Indian adult engaged
in moderate activity should, on a daily basis, consume 2,700
calories comprising 65 grams of protein and around 45-60
grams of fat. Dr Aykroyd had further pointed out that animal
proteins, such as milk, eggs, fish, liver and meat, are
biologically more efficient than vegetable proteins and suggested
that they should form at least one-fifth of the total protein
intake.
: The clothing requirements should be based on per

capita consumption of 18 yards per annum, which gives 72
yards per annum (5.5 meters per month) for the average
worker's family. The 15th ILC also specified the associated
consumption of detergents, which can be seen in the Annexure.
: For housing, the rent corresponding to the minimum

area provided under the government's industrial housing
Page 12
Corrns.
<< 329 >>

13
schemes is to be taken. The 15th ILC kept it at 7.5 percent of

the total minimum wage.
: Fuel, lighting and other items of expenditure should

constitute an additional 20 percent of the total minimum wage.
: The Central Pay Commission considered additional

components of expenditure to cover for children's education,
medical treatment, recreation, festivals and ceremonies. This
followed from the Supreme Court's ruling in the Raptakos Brett
Vs Workmen case of 1991 for determination of minimum wage
of an industrial worker. The Supreme Court had prescribed this
amount at 25 percent of the total minimum wage calculated
from the first five components. However, in considering this
additional component the VI CPC took note of the educational
allowance and medical facilities being provided by the
government.
- It was after considering all relevant factors the

Commission is of the view that the minimum pay in government
recommended at Rs.18000/- per month, w.e.f. 01.01.2016, is
fair and reasonable and one which, along with other allowances
and facilities, would ensure a decent standard of living for the
lowest ranked employee in the Central Government.
- It is further submitted that in the charter of demands

given to the First respondent I.B.A., the apex officers‘
associations have put forth that as most of the
recommendations of the seventh pay commission were fully
accepted by the GOI gives credentials to the methodology
adopted for arriving compensatory package for the various levels
and there cannot be a second opinion to adopt the same
principle for the IBA too.
Page 13
Corrns.
<< 330 >>

14
- More so, as the Pay Commission has adopted the

principles to draw the wage structure taking into account the
salary structure of different sectors including the private sector
and the same has been accepted by GOI for implementation, the
same principles have to be followed by and for the Banking
sector also in the bi-partite negotiations.
It is also put forth further in the Bank Officer

Associations‘ charter of demands that
- The remuneration package of the Bank officers needs

to be framed in such a manner that officers would feel that they
are valued and fairly paid considering their work load and
undertaking of enormous risks and responsibilities. They
should be treated at par with Government officials and PSU
officers. As stated in the 7th Pay Commission Report the status
of an officer in the society should also be taken into account
while fixing the salary.
- Remuneration of officers is an important element of

proactive functioning in Banks in this era of competitive
scrimmage and their commitment, dedication and hard labour
towards the progress of the economy of the country. In general,
the level and structure of salary / remuneration / compensation
should aim to achieve four objectives as under:
- Salary Structure should be sufficient to attract and retain

quality officers.
- Salary Structure should motivate officers to work hard.
- Remuneration should induce other human resource

management reforms.
- Salary should be set at a level to ensure relativity with

minimum salary in Banks and officers' initial pay in line with
Page 14
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15
compression ratio, as shown below, of Central Government

Group A officers' initial pay.
- Salary should take into account the Risk, Responsibility,

Accountability and also the Transferability of Officers.
- The Bank Officers have a status similar to the Govt

Officials and to maintain that status the salary should be
adequate, by offering additional cushion.
- As promotions depend only on vacancies which depends

on the presence and business of the individual banks nobody
should be allowed to stagnate and running scale should be
introduced.
- The anguish, agony and the aspirations of lady officers

should be taken into account.
- Superannuation benefits should help one to live a

respectable life after retirement.
- The hard work and contribution of the bankers for the

development of the economy should be acknowledged through
decent salary hike and allowances.
- A standardisation of salary and allowances for Bank staff

has been done by a Committee famously known as the Pillai
Committee which gave certain recommendations in 1974 which
were further discussed and rationalised and implemented in
1979.
- Pillai Committee had taken into account the guidelines of

UN publication, handbook of Civil Service Law and practices
1966, which mentioned 3 major requirements of sound pay
structure viz..Inclusiveness (pay structure in relation to other
sectors of economy) comprehensibility (an easy quick picture of
gross emoluments) and adequacy (to attract right type of
Page 15
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<< 332 >>

16
persons and retain them).The Pillai Committee added two more

viz. rationality (functions and responsibility of posts) and career
planning.
- It said in view of the importance of the national

approach to wage problems we consider it necessary to make
the pay structure in nationalised banks broadly similar to that
obtaining in the State Bank Group, in the Central Government
and in Public Sector undertakings (Para 5-2, vii)
- The committee also said, ― If the objective of attracting

the best talent in the country is to be achieved, the pay of the
bank officers at the entry level should not be anything less than
that obtaining in Class I services and Public Sector industries‖
(Para 5-10)
- The Parliamentary Committee on Subordinate legislation

in its 141 report has also endorsed these principles.
- However between 1979 and now there is a huge

downward trend in the Bank Officials salary which has to be
rectified now.
Bank Officers LIC OFficers

Date of Effect Basic Pay Date of Effect Basic Pay
01.11.1992 4250 01.08.1992 4250
01.11.1997 7100 01.08.1997 7535
01.11.2002 10000 01.08.2002 11110
01.11.2007 14500 01.08.2007 17240
01.11.2012 23700 01.08.2012 32795
: As on 01.11.1992 the Basic Pay of officers of Bank and

LIC at entry level were same.
Page 16
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17
: As on 01.11.2007 LIC officers were getting 14.40% higher

salary than Bank officers.
: As on 01.11.2012 LIC officers were getting 18.58% higher

salary than Bank officers.
: So, it is crystal clear that the Bank Officers' salary is

drastically being reduced gradually resulting in erosion of wage
even in comparison to LIC officers.
: while salary of Central Govt employees gets revised at 10

years interval, Bank employees' salary is being revised at 5
years interval. It is apparent that despite salary revision at 5
years interval salary of Bank officers is lagging behind during
last 23 years duration in comparison to salary of Central Govt
Officers Group- A, at entry level onwards.
: Besides, 7th Pay Commission has recommended that

without waiting for next pay commission the salary should be
revised based on the data given by Simla based Labour Bureau.
Period of Minimum Basic Period of Minimum

CPC Pay of Grade‖ A‖ Bipartite Basic Pay of
Officer settlements Bank Officers
(Rs.) (Rs.)
III CPC
700
(1973 to 700 Pillai Committee
1175
1985) 4th BPS
IV CPC 5th BPS 2100
(1986 to 2200
1995) 6th BPS 4250
V CPC 7th BPS 7100

(1996 to 8000
2005) 8th BPS 10000
VI CPC 9th BPS 14500

21000
(2006 to
(15600+5400)
2015) 10th BPS 23700
VII CPC
(2016 56100 11th BPS ?
onwards)
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18
: From 01.11.1992 to 01.01.2016 the salary of Central

Govt Group A officers has been increased by 1293.44% (56100-
4026=52074/4026 X 100) at entry level.
: From 01.11.1992 to 01.01.2016 the salary of Bank

officers has been increased by 708.81% (35701—
4414=31287/4414 X 100) at entry level.
; Moreover the 7th Pay Commission has recommended that

there is no need for a commission once in 10 years. It has
recommended that based on the Labour Bureau reports the
increase can be done periodically.
: In case of RBI officers, the starting basic pay which was

Rs 17100 has been increased to Rs 28150 and at entry level.
They also get a local allowance of 5% of pay, family allowance of
4% of Pay, Grade allowance of Rs.6000 and a special allowance
of Rs.6000 (Rs.1625 for those who joined in 2016) which is
eligible for DA. So their salary structure is much superior to
other bank officers.
: Thus we shall also follow the principles of VII pay

commission in fixing minimum salary, of course to be
calculated as on 1st November 2017 after adding the cushion
discounted by the pay commission to the Government
employees for the ― Status‖ they enjoyed and also after adding
the additional cushion for the Risk, Responsibility,
Transferability and Accountability the bank officers are
subjected to, in the same ratio fixed between the employees and
officers,
: We have to take into account the inflation projected for

Nov.17.
Page 18
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19
: We shall also uphold views expressed in offering the

running scale without stagnation and also in scrapping the
NPS.
As the Pay Commission has adopted the principles to draw the

wage structure taking into account the salary structure of
different sectors including the private sector and the same has
been accepted by GOI for implementation, the same principles
have to be followed by and for the Banking sector also in the
11th Bi-partite negotiations.
: The code of wages bill No. 163 of 2017 was introduced in

Loksabha which relates to wages to the working class in the
country. A parliamentary committee formed to seek the views of
various institutions visited Syndicate bank too to ascertain the
views of the Bankers on 24th Jan 2018 and had discussion with
the representatives of the officers and employees besides the
management. It‘s salient features are:
: Government will form the Advisory board which includes

the representatives of the employees too to fix the minimum
wages to be given to the Employees and Workers of the
appropriate Government which includes the clerks and
supervisory strength working in the public sector banks and the
insurance companies.
: Such minimum wage is payable to a person employed in

respect of his employment or of work done in such employment,
but not related to the profit or paying capacity of the
Institutions.
; Such minimum wage does not include any contribution

paid by the employer to any pension or provident fund, and the
interest which may have accrued thereon, means that the
Page 19
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20
contribution towards pension should not be termed as a load or

burden while deciding the wage revision.
: Application of this formula in the 11th bi-partite

negotiations on the lines of CPC does not affect the wage
revision to happen once in five years as the 7th Pay Commission
has recommended that without waiting for next pay commission
the salary should be revised based on the data given by Simla
based Labour Bureau every five years for the Government
employees too.
- the charter of demands submitted by the Bank officers‘

Apex Associations insisted only for the adoption of 7th C.P.C.
formula in the 11th bi-partitie wage negotiations and not
demanded for the constitution of any new Pay Commission for
Bank Officers.
12. It is submitted that consequent upon the 7th Central

Pay Commission implementation (7th C.P.C. in short), the Union
Cabinet, while revising the income criteria to exclude socially
advanced persons / sections from the purview of reservation for
OBC, equated the post of Junior Management Grade -1 (J.M.G-
Scale-1) in Public Sector Banks with that of the Group ‗A‘
officers in Government of India. The fourth respondent – the
Union Ministry of Finance, the controlling authority for the first
respondent – the I.B.A., has sent notification vide their letter
No.19/4/2017 – Welfare, Government Of India Ministry of
Finance Department of Financial Services dt.6-12-2017 to the
first respondent I.B.A. specifically as the seventh addressee for
implementation. The notification that was sent to the first
respondent about one year back is binding on the first
respondent.
Page 20
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21
13. It is submitted that by the equivalence of posts

notification by the Fourth respondent, Group ‗A‘ Government
Officers and J.M.G.-Scale-1 Bank officers constitute one class
and form a homogeneous class and the first respondent
withholding the Government notification of equivalence of posts
and hence their pay is discriminatory and is violation of Article
14 and 16 of the Constitution.
14. It is submitted that when there is equivalence of

posts admittedly there is equivalence of minimum starting scale
pay. The minimum starting pay for the Group ‗A‘ Govt. officer
which is the equivalent to J.M.G.-Scale-1 post is stipulated in
the 7th C.P.C. The present minimum pay for Group ‗A‘ officer as
per the 7th C.P.C. formula is 56,100/-. It is submitted that the
CBOA‘s demand for the implementation of 7th C.P.C formula
first respondent IBA was vindicated and endorsed by the
Government‘s notification of equating J.M.G.-Scale 1 posts with
Group ―A‖ posts in Government of India and hence their
equal pay.
15. It is submitted that as per the Government

notification of equating J.M.G. Scale-1 post to that of Group ‗A‘
Officers in Government, the minimum starting pay for all J.M.G.
Scale-1 officers ought to be minimum starting pay of Group-A
as per the 7th C.P.C. formula. The minimum starting pay for
Group-A officers in Government service as per the 7th C.P.C.
formula is 56,100/-. Therefore, in all fairness the minimum
starting pay for J.M.G.-Scale-1 shall be at 56,100/- or more.
16. It is submitted that when the minimum scale of pay

for J.M.G.-Scale -1 itself is set to begin at Rs.56,100/- as per
the 7th C.P.C.,formula, any further wage revision negotiation for
settlement by the first respondent I.B.A. could be over and
above the prevailing 7th C.P.C. minimum starting pay of
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22
Rs.56,100/-. More so, the negotiations could only be on the

stages of pay, incremental pay on the bench-marked minimum
starting pay of Rs.56,100/- to be fixed accordingly as on 1st
November 2017.
17. It is submitted that in banks there is no

discrimination in pay amongst the officers belonging to OBC
and other categories. What is the pay applicable to OBC is
equally applicable to officers belonging to non-OBC officers also.
Therefore, the Government notification on equivalence of posts
and hence their equivalence of starting pay is relevant and
applicable to all Officers.
18. It is submitted that as per the 7th C.P.C. formula, the

minimum starting pay is to be taken for J.M.G. Scale-1 serving
officers. As a consequence, for all the retirees also there ought
to be updated pension as per the 7th C.P.C. formula. For the
past 22 years, since 1-1-1996, pension was not revised nor
updated for the bank retiree officers.
19. It is submitted that the Bank Pension Scheme was

formulated at the same rate on the basis of the Central
Government Pension Rules in 1993. It is submitted that the
consequent non-revision of bank officers‘ pension ever since it
was introduced way back on 1st January 1986 has adversely
affected the retired bank officers and put them to untold
sufferings. Retirees‘ pension is serviced from their pension fund
which is robust, generating huge income from the fund
investments and leaving huge surpluses to remain in the
Pension fund after paying pension.
20. It is submitted that both the serving officers and

retired officers are deprived of their decent life commensurate
with their status of employment though it was mainly stressed
by the covenants of the International Labour Organisations‘
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23
Convention (I.L.O.) from time to time and also agreed by the

Government of India for implementation by tabling the code of
wages Bill, 2017, whereby the Union Government intends to
bring about that
a) The minimum wage is fixed for having employed in the

institution and not linked with the Profit and paying
capacity.
b) The contribution towards pension and the interest

accrued shall not be taken for the Load factor.
c) Supervisory strength of both Banking and insurance

companies are also included for getting benefit under
the Bill.
21. It is submitted that so far many rounds of wage

revision negotiations were held by the First respondent I.B.A.
with the representatives of Apex body of Bank Officers‘
Associations.
The I.B.A., by sticking on to the discarded load factor, paying

capacity in the negotiations, is acting in violation of the I.L.O.‘s
fair wages declaration adopted by the Union Government
despite the fact that it was also incorporated by the Union
Government in the Code on Wages Bill - 2017.
Moreover, the I.B.A.‘s non-adherence to the basic feature of

Pillai Committee norms of maintaining one and the same
starting pay for both the Bank Officers and the Group-A
Government Officers is against all cannons of Equity, Justice
and Good Conscience.
Also, the I.B.A.‘s non-compliance of Government notification on

equivalence of posts and their failure to maintain the pay of
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24
Bank Officers to remain on par with the equivalent Group-A

Government Officers is unjust.
Further, the I.B.A.‘s non-implementation of the 7th C.P.C.

formula for the Bank officers by not taking the Government
Group-A officers pay of Rs.56,100/- as the starting scale for
Bank officers and the consequent non-updation of pension to all
retirees as per the 7th C.P.C. formula, are in total violation of
natural justice besides unconstitutional.
Thus, the first respondent‘s action of giving great hardship to

the Bank officers as aforesaid and putting them into suffer a
huge monetary loss by not implementing the Union Cabinet‘s
decisions notified by the Fourth Respondent are the main facts
in issue submitted before this Honorable Court for adjudication
and for rendering justice.
22. In the aforesaid circumstances and against the

backdrop of events and facts submitted supra, it is prayed that
this Hon‘ble Court may be pleased to pass an appropriate order
in Writ Petition in W.P.(MD)No.22161 of 2018 in the interest of
justice and thus render Justice.
Solemnly affirmed at Madurai,

and it is Certified that the
contents of this affidavit were
read out in my presence to the
executant who appeared perfectly Before Me.
able to understand the same
and made his signature in my
presence on this day of
Advocate, Madurai.
November 21, 2018.
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25
DISTRICT :
HIGH COURT :: MADRAS

MADURAI BENCH
W.P.(MD)No.22161 of 2018
(On the file of this Hon‘ble Court)
COUNTER AFFIDAVIT FILED BY

THE 5 TH RESPONDENT
Page 25
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A14
IBA Circular on its
legal status
<< 343 >>

<< 344 >>

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ALL INDIA NATIONALISED

BANKS OFFICERS FEDERATION’S

STRIKE - AINBOF DEMANDS and JUSTIFICATIONS

Consequent to nationalisation of Banks, Government of India constituted Pillai

Starting For For Difference in

As on 01.11.2017 Rs.23700/- Rs.56100/- Rs.32400/-

In between Department of Financial Services, Ministry of Finance, Government of

Mr.S.Dhanasekar’s WP 19947/2018 (19.09.2018) (A04) prayed for Equal Pay

Expeditious Wage Revision as per Minimum Wages formula adopted in CPC,

Merger of Special Pay Component with the Basic Pay

Introduction of Running Scale of Pay

Introduction of 5 day week in full

Uniform definition of Business Hours, Lunch hours etc in branches, Reduction

Exemption from Income Tax on retirement benefits without ceiling

Scrapping of NPS and reintroduction of Defined Pension Payment Scheme

Allocation of Staff Welfare fund based on Operating Profits

On 30th August 2019 the announcement on merger / consolidation of Public Sector

In the name of branch rationalization, branches are bound to be closed, as is evident

By proposing right sizing of human resources, Voluntary Retirement will be introduced

In this backdrop, the announced merger/amalgamation of public sector banks cannot

Hon’ble Supreme Court also, in a in civil appeal by the Workmen represented by

3. Merger of Special Pay Component with the Basic Pay

4. Introduction of Running Scale of Pay

The Government officers are getting their increments uninterruptedly whereas in

5. Immediate introduction of 5-day week in full

Even in our country, most of the progressive, forward-looking corporates,

As such, declaring remaining Saturdays as holidays will have no impact on the

6. Uniform definition of Business Hours, Lunch hours etc in branches,

This will also have the following advantages:

a. Dependency on cash in the society will be reduced

f. Enable officers to engage themselves in compliances and business

7. Settlement of issues pertaining to retirees - Updation of Pension as per RBI

Updation of pension / Revision of Family Pension without any ceiling

Medical Insurance Scheme at par with SBI employees

Steep increase in medical insurance premium: A meaningful medical insurance

 The premium imposed for medical treatment in respect of officer retirees is

 IBA should send communiqué to all Banks to subsidize/bear the Insurance

Instead this should be considered as an extended benefit to the retired employees /

8. Exemption from Income Tax on retirement benefits without ceiling

9. Scrapping of NPS and reintroduction of Defined Pension Payment Scheme

10. Allocation of Staff Welfare fund based on Operating Profits

A01 – Charter of Demands

The Basic principle of our wage revision should be

CHAPTERS Page No.

Introduction to Charter of Demands 5

Part I Salary Revision and Allowances 23

Part II Perquisites, allowances, welfare facilities viz., leave rules, 35

Part III The issues concerning Lady Officers. 39

Part IV Superannuation Pension, Provident Fund, Gratuity Etc., 43

Part V Non monetary issues, comparable position in the 51

Part VI: General Bilateral Relationship. 55

Annexure 1. Disciplinary and Vigilance Proceedings 59

2. Note on Five Day Week 69

3. Regulated working hours 76

6. Judgement on accumulation of leave 82

(D.T. FRANCO) (S. NAGARAJAN) (K.K. NAIR) (Dr. S. U. DESHPANDE)

ALL INDIA BANK OFFICERS' CONFEDERATION [AIBOC]

OPPORTUNITY COST OF GOVERNMENT DIRECTED SCHEMES

Bank Name RURAL URBAN TOTAL NO. OF AADHAAR BAL IN

COMPENSATION SYSTEM TODAY

SALARY & ALLOWANCES

The remuneration package of the Bank officers needs to be framed in such a

Cen tra l Pay Minim u m Ba sic M inim um B asic P ay C om p ressi