Case Note & Summary
The dispute arose under Section 33A of the Industrial Disputes Act, 1947, concerning the transfer of a bank employee who did not belong to the subordinate staff. The appellant, Canara Banking Corporation Ltd., had branches throughout southern India. The respondent joined the bank in 1951 and after confirmation in 1952 was posted at Udipi, later transferred to Trichur, then on representation moved to Mandvi Branch, Bombay in 1956. On May 20, 1961, the bank transferred him back to Trichur. The respondent filed an application under Section 33A on August 26, 1961 before the National Industrial Tribunal, which transferred it to the Labour Court, Ahmedabad, alleging that the transfer was mala fide, an act of victimization for lawful trade union activities, and intended to deprive him of lawful dues. He sought cancellation of the transfer and permission to continue at Bombay. The Labour Court held that under the Sastry Award a clerk like the respondent could not be transferred outside the State or language area except with consent. It rejected the allegation of victimization but concluded that the bank had not established that it had no alternative to transferring this particular clerk. It directed cancellation of the transfer and retransfer to Bombay. The bank appealed to the Supreme Court. The main legal issue was whether the Sastry Award absolutely prohibited such transfers for non-subordinate staff or whether the words 'as far as possible' left discretion with the bank. The Supreme Court examined the relevant direction in the Sastry Award, which provided that for subordinate staff there should be no transfers ordinarily and no transfers beyond the language area, but for non-subordinate staff, as far as possible there should be no transfer outside the State or language area except with consent. The Court held that the words 'as far as possible' were deliberately used to leave it to the banks to decide, on consideration of business interests, whether such a transfer could be avoided. Therefore there was no absolute prohibition. The Court further observed that a bank with branches in different parts of the country must distribute manpower according to business needs, and the management is best positioned to judge this. Industrial tribunals should ordinarily accept management's submission that a transfer was unavoidable unless there is reason to believe the transfer was mala fide, by way of victimization, unfair labour practice, or ulterior motive. Since the Labour Court had rejected the respondent's allegations of union victimization, the Supreme Court found no justification to interfere. It held that the Labour Court erred in holding the transfer was not in accordance with standing orders. Accordingly, the Supreme Court allowed the appeal, set aside the Labour Court order, and rejected the respondent's application under Section 33A, with no order as to costs.
Headnote
A) Industrial Dispute - Transfer of Bank Employee - Sastry Award Distinction Between Subordinate and Non-Subordinate Staff - Industrial Disputes Act, 1947, Sections 33 and 33A - The Sastry Award draws a clear distinction: for subordinate staff, there is absolute prohibition on transfers beyond language area, but for non-subordinate staff, transfer outside State or language area should be avoided only 'as far as possible', leaving discretion with the bank when business interests so require. The Labour Court erred in treating this as requiring employee consent for non-subordinate transfers. Held that the words 'as far as possible' preclude absolute prohibition. B) Industrial Dispute - Alteration of Service Conditions and Bona Fide Management Decision - Industrial Disputes Act, 1947, Section 33(2) - Transfer of a non-subordinate workman outside State/language area may be a material alteration in service conditions, but if the bank acted bona fide for business exigencies and no victimization or unfair labour practice was found, the transfer is in accordance with Sastry Award standing orders. The Labour Court had rejected the victimisation allegation, so no contravention of Section 33 existed. Held that the Section 33A application should be rejected. C) Judicial Review - Management Prerogative in Manpower Distribution - Industrial Disputes Act, 1947, Section 33A - Industrial adjudication should ordinarily accept management's submission that transfer was unavoidable unless mala fide, victimization, unfair labour practice, or ulterior motive is shown; tribunals are not suited to decide manpower distribution. The Labour Court was not justified in concluding transfer could be avoided without injury to bank's interests. Held that the appeal is allowed and the Labour Court order set aside.
Issue of Consideration
Whether the Labour Court erred in holding that the Sastry Award absolutely prohibited transfer of a non-subordinate bank employee outside the State or language area without consent, and whether the transfer order contravened Section 33 of the Industrial Disputes Act, 1947.
Final Decision
Appeal allowed; Labour Court order set aside; respondent's application under Section 33A rejected. No order as to costs.
Law Points
- Sastry Award distinguishes between subordinate staff and other workmen
- absolute prohibition only for subordinate staff transfers beyond language area
- for non-subordinate staff
- transfers outside State or language area should be avoided 'as far as possible' but bank retains discretion if business interests require
- management is best judge of manpower distribution
- industrial adjudication should accept management's bona fide decision unless mala fide
- victimization
- unfair labour practice
- or ulterior motive
- transfer resulting in material alteration of service conditions may be justified if in accordance with standing orders
- Section 33A application fails when transfer not in contravention of standing orders
