The Kerala High Court has ruled that statutory restrictions on strikes and lockouts under the Industrial Disputes Act, 1947 apply to bank employees even if they are not “workmen” under the Act. The ruling came in The Federal Bank Ltd v Federal Bank Officers Association & Anr.
A Division Bench of Justice Sushrut Arvind Dharmadhikari and Justice Syam Kumar VM held that Section 22(1)(d) of the Act uses the expression “no person employed in a public utility service.” The Court emphasised that the legislature chose the phrase “no person,” not “workman.” Therefore, the restriction is not limited to workmen.
Since banking qualifies as a public utility service (PUS), the Court held that the statutory bar on strikes during conciliation proceedings applies to bank officers as well.
Court on Impact of Strikes in Banking Services
The Bench explained the legislative intent behind restricting strikes in public utility services. It observed that strikes and lockouts can paralyse institutions that provide services of immense public importance.
The Court noted that banking sits at the forefront of the Indian economy. A strike by bank officers, it said, would directly affect ordinary citizens. Lower-middle-class and poor citizens would face the greatest hardship because they rely on banking services for basic transactions.
In public utility services, the law prioritises public interest. A strike or lockout, the Bench stated, cannot override the larger national interest.
Appeal by Federal Bank; Conciliation Proceedings Restored
The Division Bench delivered the ruling while allowing an appeal filed by Federal Bank against a single-judge decision.
The dispute began after the Regional Labour Commissioner issued notices initiating conciliation proceedings under Section 22. The Commissioner acted after the Federal Bank Officers Association gave a strike call.
The association challenged the proceedings before the High Court. It argued that its members did not qualify as “workmen” under Section 2(s) of the Act. On that basis, it claimed that the strike and conciliation provisions did not apply to them.
A single-judge Bench accepted this argument and quashed the conciliation proceedings. The single judge held that no industrial dispute could arise in the absence of workmen. The Court therefore ruled that the Labour Commissioner lacked jurisdiction to initiate conciliation. It also held that no statutory bar prevented the officers from continuing their strike.
Federal Bank challenged this decision in appeal. The Bank argued that Section 22 restricts strikes by “any person” employed in a public utility service. It submitted that the provision does not limit itself to workmen.
The officers’ association maintained that its members performed managerial and supervisory functions. Therefore, they fell outside the definition of workmen, and the strike restrictions did not apply to them.
Definition of “Strike” and Trigger for Conciliation
The Division Bench disagreed with the single-judge view.
The Court examined the definition of “strike” under Section 2(q). It noted that the provision refers to a “body of persons employed in any industry.” The legislature did not use the term “workman.” If Parliament intended to restrict the scope to workmen, it could have done so expressly.
The Bench also clarified that conciliation proceedings do not require a pre-existing industrial dispute. Once employees communicate a strike call to the employer, the employer may trigger conciliation proceedings.
The Court warned that accepting the contrary argument would defeat the legislative purpose. If a strike could not trigger conciliation, then a strike or lockout would never form the basis for preventive intervention under the Act.
The Bench further reiterated that the right to strike is not a fundamental right. While Article 19(1)(c) protects the right to form associations, it does not confer an unrestricted right to stop work or disrupt essential public services.
Final Directions
The Division Bench set aside the single-judge ruling and restored the conciliation proceedings.
The Court held that once conciliation begins due to a strike call, employees cannot pursue or act upon the strike during the pendency of those proceedings.
Appearances
Senior counsel CU Singh and Benny P Thomas appeared for 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.
Central Government counsel PR Ajith Kumar represented the Regional Labour Commissioner (Central).
