The Madras High Court has quashed a circular issued by Union Bank of India in 2010 denying monthly pension to employees who were given compulsory retirement from service as punishment.
Allowing a petition, Justice K K Sasidharan of the Madurai Bench of the court, said it was against Employees Pension Regulations, 1995 which provided for payment of pension even to those who had been retired from service compulsorily.
The judge said the Bank had framed the regulations when the pension scheme was introduced in 1995.
Some of the employees failed to submit applications expressing their desire to be a part of the scheme. Hence, acting on the basis of a general advisory issued by Indian Banks Association, the UBI issued a circular on August 27, 2010 providing one more chance to its employees to avail benefits of the pension scheme.
But the circular stated that only those who take voluntary retirement would be eligible for monthly pension and not those who had been retired compulsorily as a mode of punishment.
The judge said such a restriction was not in consonance with the pension regulations framed by the bank in 1995, adding a circular could not override the regulations which were statutory in nature.
Besides the purpose of the circular was to give another option to join the scheme. The pension scheme remained the same with valid regulation providing pension for the compulsory retirees also.
The pension regulation should be amended if the bank wanted to restrict pension to those who retired voluntarily, the judge said, allowing the plea filed by an employee.
