AIBOC CIRCULAR NO. 80 DATED 20.08.2011

AIBOC issued its circular No. 80 dated 20.08.2011 on Supreme Court’s judgement on eligibility of pension to the persons who resigned from the services. We are reproducing the same here for our readers.

CIRCULAR NO.80                                                     20.08.2011

TO ALL AFFILIATES/MEMBERS:

LANDMARK JUDGEMENT OF THE SUPREME COURT - RESIGNING FROM SERVICE - OFFICERS’ OF NEW INDIA ASSURANCE COMPANY LTD., - AFTER COMPLETING PENSIONABLE SERVICE, ELIGIBLE FOR PENSION

We have been pursuing with IBA, the cause of Officers who had resigned from service of Banks after completing more than 20 years of service and by giving three months advance notice, to be made eligible for pensionary benefits in the wake of settlement on 2nd Option on Pension. IBA has not responded positively to our correspondence on the issue. Now the Supreme Court of India in the Civil Apex Case No. 6013 of 2011 in respect of Sri.Sheelkumar Jain Vs The New India Assurance Company Ltd. and others, have in unambiguous terms, delivered a landmark judgement in favour of the petitioners and have averred that the Officer who has resigned from the service of the Company after completing 20 years of service and by giving three months notice, is eligible for Pension benefits.

The same analogy applies to officers who have resigned from the service of the Banks after completing pensionable service of 20 years and giving 3 months notice expressing their desire to quit the Bank.

We have addressed a letter to the IBA to consider the cases of Officers who have resigned from the service of different Banks for pensionary benefits.  The text of the letter is annexed.

Further developments will be informed to you.

With greetings,

Sd/-

(G.D. NADAF)

GENERAL SECRETARY

No./1452/297/11                                           20th August, 2011

To,

The Chairman,

The Indian Banks’ Association,

World Trade Centre Complex,

Centre 1, 6th Floor, Cuffe Parade,

MUMBAI – 400 005.

Dear Sir,

IMPLEMENTATION OF SECOND OPTION ON PENSION IN THE WAKE OF 9TH BIPARTITE SETTLEMENT - DENIAL OF OPTION TO JOIN THE PENSION SCHEME TO OFFICERS WHO HAVE RETIRED UNDER VOLUNTARY RETIREMENT SCHEME OR RESIGNED FROM THE SERVICES OF THE BANKS

We draw your kind attention to our correspondence on the captioned issue, resting with you. We regret to note that, you have not responded to our correspondence positively. In the meanwhile, the Supreme Court of India in the Civil Appeal No.6013 of 2011, pertaining to the case of Sri.Sheelkumar Jain Vs. New India Assurance Company Ltd., and others has delivered a landmark judgement wherein, the learned judges have averred that:

The officer-employee of the Insurance Company who has put in the qualifying service for Pension and given up his service voluntarily after serving 90 days notice; in accordance with the Voluntary Retirement Scheme is eligible for pensionary benefits.

Clause 22 of the General Insurance Pension Scheme 1995, stated that, resignation of an employee from the service of the Corporation or a Company should entail forfeiture of his entire past service and consequently should not qualify for pensionary benefits, but did not define the term “Resignation”.

Under Clause 30(1) of the Pension Scheme 1995, an employee who have completed 20 years of qualifying service by giving notice of not less than 90 days in writing to the appointing authority, to retire from service under clause 30(2) of the Pension Scheme 1995. The notice of Voluntary Retirement should require acceptance by the appointing authority. Since “Voluntary Retirement” unlike “Resignation” did not entail forfeiture of past service and instead qualified for pension, an employee to whom clause 30 of the Pension Scheme 1995 applied should not be considered to have “resigned” from service.

In the instant case, appellant had completed 20 years of qualifying service and had given notice of not less than 90 days in writing to the appointing authority of his intention to leave service, and the appointing authority had accepted notice of the appellant and relieved him from service.

Hence, clause 30 of the Pension Scheme 1995 applied to the Appellant even though in his relieving letter to the General Manager of the respondent he had used the word “resign”. Further clauses 22 and 30 of the Pension Scheme 1995 should not be so construed as to deprive of an employee of an Insurance Company, such as the appellant, who had put in the qualifying service for Pension and who had voluntarily given up his service after serving 90 days notice in accordance with Clause 5(1) of the Scheme”.

It is crystal clear that, the Officers who have completed 20 years or more of service, retired from the service of the Bank by giving 3 months notice to the competent authorities concerned and Management accepting such applications submitted by the Officers’ offering to resign from the service of the Banks, should have been treated on par with the officers retiring under the Regular Voluntary Retirement Scheme as per the Bank Employees’ Pension Regulation 1995, Clause No.29. Such Officers should be made eligible for pensionary benefits.

Keeping in view the judgement of the Supreme Court as mentioned Supra, we request you to reconsider giving an option to all the Officers who resigned from the service of the Bank after completing 20 years of service, and qualify for pensionary benefits, should be given an option to join the Pension scheme of the Banks.  As the number of such officers in the entire banking industry is very small, it should not be a problem for Banks to grant an option to these officers to join the pension scheme as per the Joint Note signed by us on 27.04.2010.

Forwarded herein a copy of the Supreme Court Judgement for your kind perusal and suitable action in the matter. We are sure, you will be able to take a positive view on the issue and provide a relief to the affected officers.

Please expedite.

Thanking you,

Yours faithfully,

Sd/-

(G.D. NADAF)

GENERAL SECRETARY