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Customary Bonus

Staff Welfare Activities Circle Welfare Committee Customary Bonus State Bank Of India Staff Co-operative Credit Society Limited State Banks’ Staff Union T.v. Loganathan Towers Golden Jubilee Merit Award Scheme Gjmas State Banks’ Staff Union Shri V. Ganesan Trust Death-cum-accident-cum- Retirement Benefit Scheme Achievements Of Our / Union Federation
Customary Bonus

The members of staff including temporary and part time employees were paid two months basic pay as Bonus for every year since 1943. After the Payment of Bonus Act came into force in 1965 also, due to the persistent efforts of our Union / Federation, it was ensured that the two months basic wages was paid to all our members.

InIn 1975, the Central Government issued an ordinance called "Payment of Bonus Amendment Ordinance" inter alia removing the Banks from the purview of the Bonus Act. In view of the above Ordinance, the Bank stopped payment of Customary Bonus and the Bonus as per the provisions of Payment of Bonus Act was only paid since then.

At the instance of our Union, the Federation Council decided to challenge the decision of the Management in stopping the Customary Bonus and accordingly a Writ Petition was filed by our Union before the Hon'ble High Court, Madras on 16.06.1976 and another Writ Petition was filed before the Hon'ble Supreme Court under Article 32 of the Constitution contending that the right to customary bonus had become a property right.

The Hon'ble Supreme Court delivered their judgment that it would be appropriate and satisfactory to have the entire matter considered by an Industrial Tribunal and as per their direction our Union filed representation on 20.12.1979 before RLC (C) Madras for reference of the dispute.

After protracted struggle and efforts taken by our Union the dispute came up for hearing and the Hon'ble Arul Raj, Industrial Tribunal gave a verdict upholding our contention viz. "The payment of 2 months minimum bonus to State Bank of India employees irrespective of the salary they draw has become an implied service condition, customary and deferred wage and that they are entitled to such bonus from the second-half year of 1975. The Award was Gazetted on 14.01.1984. On 09.02.1984 the Management obtained an ex-parte order staying the implementation of the provisions of the above Award. Our Union's petition to vacate the exparte stay order was heard by the Hon'ble Justice Sathiadev who passed the order in favour of State Bank men. Against this Order, the Management again preferred an appeal before the First Bench of the Hon'ble High Court, Madras. Hearing the arguments of both sides on the Bank's petition, the Hon'ble First Bench consisting of Hon'ble Chief Justice and Mr.Justice Gokulakrishnan confirmed the order of Mr.Justice Sathiadev with slight modifications. As per the terms of the Hon'ble High Court, 50% arrears to all the employees in service were disbursed throughout the Country. With a view to nullify the effect of the Bonus Award, The Banking Laws (Amendment) Bill (Bill No.62-C of 1984) was passed by the Lok Sabha and the Rajya Sabha amidst protest and walk-out by almost all the opposition parties in October 1984. The President of India gave his assent to the Bill and Sec.43 (A) was incorporated in State Bank of India act. This amendment was brought mainly with a view to deprive the State Bank employees of the right to Customary Bonus. Consequent upon steps initiated by our Union a writ petition was filed before the Hon'ble Supreme Court challenging the validity of the Amendment and the Hon'ble Supreme Court directed to file the petition before the Hon'ble High Court under Article 226. Accordingly, in June 1986 a writ petition was immediately filed by our Union challenging the validity of the above Amendment before the Hon'ble High Court, Madras. Meanwhile, the writ petition filed by the Bank challenging the Arulraj Award was taken up for hearing for final disposal before Hon'ble Mr.Justice Nainar Sundaram, who gave the historical judgement upholding the Hon'ble Arulraj Award and dismissing the Banks' Writ petition. The benefit of the judgement of the Hon'ble High Court, Madras covered approximately One lakh award staff and about 10,000 officers who were promoted between 1976-1984. The amount involved, as per the claims made by the Bank before the Hon'ble High Court is around 15 Crores. In short, the sustained efforts of our Union amidst various odds for 20 years i.e. from 1966 have brought a benefit of 18 to 20 crores of rupees to employees as Customary Bonus. This is the first time, such a huge amount and large number of employees was involved in a case filed by a Trade Union.

The Hon'ble High Court, Madras, dismissed the writ petition filed by the union challenging the amendment to SBI Act in this regard, after 14 long years of wait on the ground that there is no unconstitutionality. It is unfortunate that the Supreme Court also disallowed the appeal filed by our union against the order of the High Court.