SIGNIFICANT VICTORY IN COURTS

StanChart Employees Struggle Shows The Way

P N Subramanyan

EVER since the onset of liberalised economic reforms in our country, various multinational banks operating in the country have violated the banking and labour laws with impunity. These violations reached a peak during the notorious securities scam in 1992, due to which lakhs of small investors and ordinary middle class families, who were lured into the stock markets, suffered very badly. Both the Janakiraman Committee, appointed by the Reserve Bank of India, and the Joint Parliamentary Committee (JPC) have in their reports squarely blamed the three foreign banks – Citibank, Grindlays Bank and Standard Chartered Bank for the scam. Yet, no action has been taken by successive governments till date to punish the guilty persons or impose any monetary penalty. Contrast this with the experience of our State Bank of India in the US. Recently, US authorities slapped the SBI with billions of dollars as penalty alleging a technical violation of US banking regulations. This shows the true face of reforms operating in the globalised market-driven economy!

BACKGROUND OF THE CASE

The significance of the present case being dealt with in this article lies in the fact that it is for the first time in the banking industry that a powerful multinational bank has not been allowed to get away with its brazen violations of existing labour laws. The bank has been snubbed by the judiciary at all levels – Tribunal, High Court Single Judge Bench, Supreme Court and lastly High Court Division Bench. The final outcome of this case and the judgements will surely be of assistance to many trade unions involved in fighting such banks unfair labour policies.

The largest British foreign bank operating in India has been Grindlays Bank, followed by Standard Chartered Bank. Both banks merged in August 2003, and the combine is now operating as Standard Chartered Bank with total employee strength of nearly 6,000 employees. Since 1985, this number has been frozen in the Grindlays Bank by the Award of the National Tribunal, an achievement of the 100 days strike in 1979-80, which the bank union took advantage of.

However, things began to change since 1996 when the management freely resorted to hire and fire policy. More than 5,000 persons are employed as contract labour through the bank’s subsidiary ‘Scope International Pvt Ltd’. At present, there are nearly 300 permanent employees who have been made to sit idle as a prelude to their firing. Even as these changes began to be imposed, the unions were weakened and ultimately finished in all centres of the bank operations by 1998 except in Kolkata and Mumbai. In each of these two centres, there were only 70 permanent employees, and almost all of them were made to sit idle. With the All India Grindlays Bank Employees Federation launching a vigorous campaign of agitation, the Bank could not make much headway.

THE LEGAL BATTLE – PHASE I

In Mumbai, the Grindlays Bank established an artificial department in separate premises in May 2000 and transferred 35 workmen who were made to sit idle. In their place the Bank recruited contract labour. The only difference in Mumbai was that the Bank did not resort to wholesale transfers like it did in other centres. The union launched an agitation and workmen observed one day protest strike. Ten activists of the union refused to submit to the illegal transfers. At the intervention of the Bombay High Court, the central government was forced to refer the dispute to the Central Government Industrial Tribunal, Mumbai, by an order dated April 24, 2001. During the pendency of the dispute, the bank once again resorted to mass transfer of about 100 workmen in September 2002 for the same purpose. Simultaneously, the bank announced two early ‘exit schemes’ covering all workmen with the benefit of Rs 4,000 per month as pension (even to those with less than 10 years service), waiver of loans besides other cash benefits. When the Tribunal permitted the union to incorporate these facts in the claim statement, the Bank challenged it but failed before Single Judge bench as well as before Division Bench of the Bombay High Court.

The tribunal gave its award on October 29, 2002 and its findings were as follows:

“Thus going through the evidence as a whole, the written submission and rulings filed by both sides, discussion of evidence supra and the circumstances, it is apparent that the management bank creating artificial section in the name of RMC/AMER transferred the Award staff where there is no work with the sole object to give the work of permanent employees to those on contract basis. Therefore the transfer is totally against the principles of natural justice, equity, good conscience and against the provisions of law and consequently not bonafide. Therefore the action of the management is totally unjustified. In view of the decision in Canara Banking Corporation and Syndicate Bank since the transfers are malafide and made with ulterior motive and Tribunal can interfere and set aside the same directing the management bank to place the transferees to their original posts”

Based on this, the industrial tribunal passed the following order:

“The action of the management of Standard Chartered-Grindlays Bank to transfer award staff to RMC/AMER, Mumbai, is unjustified and consequently management bank is directed to place the transferred workmen back in their original posts.”

PHASE II

The bank challenged the Award before Single Judge of Bombay High Court in WP No 398 of 2003, but it was dismissed. The judgement at end of Para 11 read as follows:

“I am satisfied that the action of petitioner-bank to transfer its employees was a malafide exercise of power. Sole object appears to me of transferring the award employees under guise of restructuring, reorganisation and rationalisation was to make them sit idle in RMC/AMER, humiliate them and force them to quit by accepting the VRS, which cannot be permitted. I have no manner of doubt that the petitioner bank has used the weapon of transfers with ulterior motive and it was malafide exercise of power with the sole object of giving work of permanent employees to the contractors and to make permanent employees sit idle in the so-called RMC/AMER department and drive them to quit their jobs by accepting VRS.”

The bank filed an appeal WP 293 of 2003 before Division Bench against the judgement of the Single Bench and the same was heard on April 21, 2003 and passed the order, which is as follows:

“1) Mr Sanghavi, learned Counsel appearing for the appellant bank stated that the concerned employees at RMC/AMER shall be repatriated to their parent department and shall be provided with same or similar work as they were doing in the past or they will be accommodated in other branches or establishments as per the service conditions including Tulpule Award and shall be given same or similar work. He stated that transfers would be effected within six months from today. The statement made by the learned counsel is accepted.

2) If the appellant bank fails to abide by the above statement the award of the Tribunal as confirmed by the learned Single Judge shall come into force and in that event the appellant bank shall implement the award within a period of two weeks.”

PHASE III

Instead of implementing the said consent order the bank took out notice of motion to modify the award and the Division Bench, Bombay High Court dismissed the same and directed the bank to implement the Award by its order dated August 18, 2003.

The bank filed petitions for Special Leave to Appeal against all the judgements of the Bombay High Court before the Supreme Court and the same was called for hearing on February 23, 2004. After the hearing, the Court dismissed the petitions.

The Award of the industrial Tribunal as confirmed by the orders/judgement of Single Judge and Division Bench High Court has come into operation on February 23, 2004. It is incumbent upon the bank management to repatriate all the transferees to RMC/AMER back to their original posts. No employer can deprive a permanent employee of his job to entrust it to contract labour and coerce the employees to quit the job.

This is the significance of the victory in this long-drawn battle and it establishes that if workmen assert their rights and fight with conviction, the hire and fire policy of the employers can be stalled and ultimately defeated.