A lot of furore has emerged over the
IBA’s stand that there is no contractual obligations towards pensioners and
such indignation is well justified. It doesn’t require a tutorial for the IBA
to prove that there is a legal contract between the public sector Banks and the
pensioners.
Following the Notification of the Pension Rules in 1995, employees/retirees
were given an opportunity to decide whether they would like to be covered by the
Pension Rules or not. This was an offer as far as the individual employees/retirees
were concerned. Once an employee/retiree exercised the option in writing
agreeing to all the conditions governing the Rules, an acceptance was conveyed to the employer.
When the Bank received the acceptance letter, the contract has come into being with the
Banks having recorded his/her status as a pensioner. That is also proved by the
fact pensions at the existing rates are being paid (although the quantum of
monthly pensions is being disputed by pensioners on account of DR anomaly and
lack of upgradation).
The same situation applies to LIC pensioners
as well. The right of the pensioners to obtain upgradation on par with the wage
increases for in-service employees is under adjudication before the Supreme
Court under the three pending Civil Appeals.
If there is no contractual obligation
towards pensioners, it has to logically follow that there is no contractual
obligation towards serving employees as well considering that Supreme Court has
equated pensioners with employees when it has ruled that pension is not a
bounty or gratis but deferred wage for services rendered in employment, in its
various judgments. Supreme Court in another case has gone a step further to rule pension as
property of the pensioner which means that ownership of the right to pension is
absolute.
In the light of the above, any
argument on the part of IBA that pension is not a contractual obligation smacks
nothing short of institutional irresponsibility.
Greetings.
C H Mahadevan
