On 2nd January, 2020 the Madras High court while disposing the writ petition filed by the Canara Bank Employees Union and Canara Bank officers association ruled that the bank does not have any right to interfere in the admission of staffs in trade union. The writ petition challenged the validity of the circular issued to all nationalized banks by the Department of Financial Services, the Union Finance Ministry on 29/10/2019 regarding auto-deduction of the union membership fees from the salary of employees.
On 29th November, 2019, the Department of Financial Services, The Union Finance Ministry issued a circular to all nationalized banks regarding the online facility that enables the employees to modify or record their mandate to auto-deduct the subscription fee for the membership of the union. Pursuant to the above circular, the Canara Bank issued a circular to its employees informing the implementation of the circular issued by the finance ministry.
The Canara Bank Employees’ Union and Canara Bank Officers’ Association filed two separate writ petitions seeking declaration of the circular issued by the finance ministry as invalid and non-est in law stating that the said circular violates the right of the trade union to admit and remove the members of the union on valid grounds.
In the present case, the petitioner trade union is a registered body having its own bye-laws which has well-defined rules for admission of members, payment of subscription fees for membership and removal of members from the union on valid grounds. The petitioners contended that no employee can become the member of the union by mere payment of subscription of fees as the union requires the employee to pay the subscription fees only after the verification of application made by the employee for the membership of union.
It further contended that the present circular enables the employee to claim membership of the union upon modifying the mandate to auto deduct the subscription fees and there are high probabilities that an employee can mandate the payment of subscription fees without even being the member of the union which is against the tenets of the trade union as it is at the instance of the employee such mandate is recorded or modified.
On the other hand, the respondent bank defended stating that even after the implementation of the circular the bank plays no role in admission or maintenance of membership of an employee in the trade union. The circular intends only to digitalize the process of issuing mandate for auto-deduction of subscription fees which was earlier submitted by the employees in physical format, thereby aligning with the advancement of technology. Hence the apprehension of the trade union that the circular violates the rights of the trade union is baseless. The bank also contended that the subscription fees shall be deducted only upon the mandate of the employee which can be modified by the employee only between 7th and 14th of every month.
The court after hearing both sides observed that there are no disputes with respect to the rights of the trade union as the bank had clearly stated that it had no intention to interfere with affairs of the trade union. Hence right of admission and removal of members in the union vests with the trade union alone and further the petitioner does not have any objections in bank deducting the subscription fees from the salary of the employees.
The court however further observed that the apprehension of the trade union that any employee can become a member of the union by mere payment of subscription as per the circular issued is found to be reasonable as the list of employees from whom the subscription fees are to be deducted is not provided by the trade union. Instead it is at the instance of the employee the same is being deducted.
1. The court while ruling the writ petitions modified the circular dated 25th November, 2019 issued by the Union Finance ministry.
2. It observed that it is essential for the bank to verify with the trade union before deduction of subscription fees, the status of membership of an employee who has modified his mandate, in particular the membership status of the employee who claims to be a member of the union.
3. The court therefore directed the bank to inform the list of employees who recorded or modified the mandate regarding auto-deduction of the payment of subscription fees for the union on or before 20th of every month.
4. The court further directed the union in turn to verify the status of membership of those employees and communicate the same to the bank on or before 25th of every month.
5. The court stated that based on the communication received from the union, the deduction of subscription fees shall be made.
On 2nd January, 2020 the court by passed a common order for the two separate writ petitions filed by the Canara Bank Employees Union and Canara Bank Officers Union. The court therefore while modifying the circular issued by the union ministry, held that the bank do not have a say in the admission of staff in the union and the right of admission and removal of members in the union shall solely vests with the trade union. It also observed that the circular shall be read in alignment with the above order.
Edited by J. Madonna Jephi
Approved & Published – Sakshi Raje
1. Canara Bank Employees Union and another Vs. Canara Bank and others, High Court of Madras, W.P. Nos. 34160 & 34258 of 2019.
2. Times of India, Madras HC: Banks can’t have a say on staff union membership, http://www.google.com/amp/s/m.timesofindia.com/city/chennai/hc-banks-cant-have-a-say-on-staff-union-membership/amp_articleshow/73363634.cms (last visited on 20th January, 2020).