The Supreme Court overturned the High Court's decision in a case regarding a bank deducting wages from employees who participated in a strike. In a 3-sentence summary: The Supreme Court ruled that an employer has the right to deduct wages from employees who participate in a concerted strike or go-slow, whether the strike is legal or illegal, as employees know they may lose wages during a strike. However, deductions would not be valid for employees who genuinely wanted to work but could not due to lack of protection from management. The Court also found that inquiries are not needed in clear cases of mass conduct during strikes.

1. Bank of India Vs. T.S. Kelawala &
Ors.
Civil Appeal No.2581 of 1986
Decided on the 4th of May 1990

2. Facts:
• Two separate appeals involving a common question of law
– Whether an employer has a right to deduct wages
unilaterally and without holding an enquiry for the period
the employees go on strike or resort to go slow.
• Appellant – Nationalised Bank
• Respondents 1 & 2 – Employees of the bank
• Respondents 3 & 4 – Unions representing Employees of
the Bank

3. • Demands for wage revision made by employees to the
Bank administration were pending.
• All India Bank Employees’ Association called for a
countrywide strike in support of the pending demand.
• On the 23rd of September, the Bank issued a circular
stating that wages for those employees participating in
the strike would be deducted for the days they went on
strike.
• The strike was called to be held on the 29th of
December1977 for a period for four hours after which the
employees would resume work.

4. • On the 27th of December 1977 the bank issues a circular
which stated participation in the strike resulted in a
breach of contract on part of the employees and they
would not be entitled to draw the salary for the full day of
29th of December, thus they need not report to duty after
the four hours of the strike.
• This was done as the four hours proposed for the strike
were the crucial working hours during which most of the
work for the day was generated. Thus, if employees did
not work for those four hours they would not have any
work for the rest of the day.
• Despite such a circular, employees went ahead with the
strike from the beginning of working hours on the 29th of
December 1977 and resumed work thereafter.

5. • The Bank did not prevent the
employees from resuming work
on that day.
• On the 16th of January 1978, the
Bank issued a circular directing
it’s managers and agents to
deduct a full day’s salary of those
employees who had participated
in the strike.
• Respondents filed a writ petition
demanding that the
abovementioned circular be
quashed.

6. High Court’s
Decision:
• Allowed the petition and quashed
the circular.
• Regulations, awards or settlements
did not allow the bank to make
such deductions.
• Bank could not in good conscience
stifle the legitimate weapon of
strikes given by law to workers by
way of the impugned circular.
• Decision was appealed by the Bank
by a Letters Patent Appeal which
was dismissed, thus an appeal was
made by the bank to the SC.
*le Bank telling
employees they
can’t get paid if
they don’t work
*le employees
backed by the
HC

7. Supreme Court Decision:
• Court observed that – “where the contract, Standing
Orders or the service rules/regulations are silent on the
subject, the management has the power to deduct wages
for absence from duty when the absence is a concerted
action on the part of the employees and the absence is not
disputed.“
• Whether such deductions will be pro rata or for a longer
period would depend on the facts of the case such as
work to be done in the said period, whether the work was
in fact done and whether it was accepted and acquiesced
in, etc. It is not enough that the employees attend the
place of work.

8. • The SC also observed that – “..whether the strike is legal
or illegal, the workers are liable to lose wages for the
period of strike. The liability to lose wages does not either
make the strike illegal as a weapon or deprive the
workers of it. When workers resort to it, they do so
knowing full well its consequences.”
• Legal strikes may not invite disciplinary proceedings,
while an illegal strike may do so, but in both cases the
workers will be liable to losing their wages for the period
of the strike.
• SC also stated that disciplinary actions or inquiries were
not feasible in admitted cases of mass conduct and that
service conditions cannot be expected to provide for all
situations. Where they are silent the management should
be deemed to have the power to deal with them in
consistence with the law.

9. • The court did however state that in cases where some
employees genuinely desired to discharge duties and were
not part of the mass conduct but could not do so due to
failure by the management to give the necessary
protection or assistance then the management will not be
justified in deduction the wage of such employees and an
inquiry will be required in such a case.
• Thus, the decision of the HC was overturned and the
appeal by the Bank was allowed.

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