Restrictions on strikes under Industrial Disputes Act apply to bank employees: Kerala High Court

The Kerala High Court recently held that restrictions on strikes or lockouts under the Industrial Dispute Act, 1947, particularly during the pendency of conciliation proceedings to settle disputes, apply to bank employees, even if they do not fall under the category of "workmen" under the Act [The Federal Bank Ltd v Federal Bank Officers Association & anr].

A Division Bench Justice Sushrut Arvind Dharmadhikari and Justice Syam Kumar VM highlighted that Section 22 (1)(d) of the Act lays down that "no person employed in a public utility service" shall go on strike in breach of contract, particularly during the pendency of conciliation proceedings.

The Bench explained that the phrase "no person" implies that the restriction on strikes and lockouts under the Act is not just restricted to "workmen."

Since bank employees are employed in connection with a public utility service (PUS), the restrictions on carrying out strikes under Section 22(1)(d) would apply to them too, the Court ruled.

In doing so, the Court also commented on why employees engaged in the provision of public utility services, such as banking services, are restricted when it comes to strikes.

"Strikes or lockouts as modes of protest are statutorily prohibited because they have the effect of paralyzing the functioning of establishments of immense public utility, such as the banking sector, which is at the forefront of the Indian economy," the Court noted.

It added that a strike by bank employees would affect the ordinary, common citizen the most. This too prompted the Court to reject the argument that restrictions on calling of strikes do not apply to banking employees as they are not "workmen."

"If bank officers go on strike, it is the common citizen, the lower-middle-class or poor citizens, who are most adversely affected, not the wealthy. This is because the banking sector’s interface today is far more with ordinary citizens than with the affluent. Even for basic services such as issuing a money order or demand draft, ordinary citizens must wait in long queues, running from one counter to another … In a PUS, the law safeguards the public first - no strike or lockout can trump the larger interest of the nation," the Court said.

The Division Bench passed the ruling while allowing an appeal filed by Federal Bank. The case arose from a dispute between Federal Bank and an association of its officers. A Regional Labour Commissioner had issued notices initiating conciliation proceedings under Section 22 after the association called for a strike.

The bank officers' association challenged these proceedings before the High Court, arguing that its members were not 'workmen' as per the definition under Section 2(s) of the Act and therefore, the Act's provisions relating to strike and conciliation did not apply to them.

A single-judge Bench of the High Court accepted this argument and quashed the conciliation proceedings.

The single-judge reasoned that without the existence of "workmen" among the bank officers, no industrial dispute would arise. Therefore, the single judge Bench ruled that the labour commissioner lacked jurisdiction to initiate conciliation proceedings under the Act. This also meant that there was no bar on the bank officers continuing their strike.

The bank challenged this single-judge decision in appeal and argued that Section 22 of the Act imposed restrictions on striking on 'any person' employed in a public utility service and was not confined to workmen alone.

The association of officers maintained that its members performed managerial and supervisory functions and fell outside the statutory definition of workmen. Therefore, they contended that the striking restrictions under the Act would not apply to them.

The Division Bench disagreed.

"The very definition of ‘strike’ under Sec. 2(q) of the ID Act contemplates that officers and non-workmen employees are included within the expression “body of persons employed in any industry”. Had Parliament intended a limited scope, it could have used the term ‘workman’ instead of ‘body of persons,'" it pointed out it.

It also held that the trigger point for conciliation under the Act need not be an "industrial dispute."

"We, therefore, hold unhesitatingly that even a call for strike, if communicated to the employer, entitles him to trigger conciliation proceedings. It is not necessary that such proceedings be preceded by an ‘industrial dispute’ at the behest of workmen when the provisions of Section 22(1) of the ID Act are applicable. Acceptance of the opposite argument would mean that strike or lockout could never serve as a ground for initiating conciliation proceedings, thereby defeating the Parliament’s objective and intent in enacting these provisions," the Court said.

The Court also reiterated that the right to strike is not a fundamental right. It stated that while workers and employees have the right to form associations under Article 19(1)(c) of the Constitution, this did not include an unrestricted right to stop work or paralyse public services.

It proceeded to set side the single-judge ruling, effectively restoring the conciliation process in this case as well as the embargo on strikes while such settlement talks are on.

"Once conciliation proceedings have been triggered by virtue of the call for strike, the call for strike cannot be carried forward or acted upon by the employees during the continuance of such proceedings," it said.

Senior counsel CU Singh and Benny P Thomas appeared for the Federal Bank along with advocates Abel Tom Benny, D Prem Kamath and Tom Thomas (Kakkuzhiyil).

Senior counsel P Chidambaram appeared for the Federal Bank Officers Association assisted by advocate P Ramakrishnan.

The Regional Labour Commissioner (Central) was represented by central government counsel PR Ajith Kumar.

[Read Judgment]