' S. M. Yousaf Kirmani, respondent was recruited in the State Bank of Pakistan, Lahore in 1960 as Coin/Note Examiner in the grade of Rs, 250-16- 490-EB-20-550. He received his increments in the normal course up to 1-1-1976 when he was drawing Rs, 490 as his basic pay. His next increment of Rs, 20 fell due on 1-1-1977, for which he had to cross Efficiency Bar. Increment due to the respondent on 1-1-1977 was not given to him as he was not allowed to cross Efficiency Bar with effect from 1-1- 1977. It seems that the respondent accepted this position as he did not challenge the action of the Management either by way of filing departmental appeal or filing a grievance petition before any Court of law. The next increment fell due on 1-1-1978. He was informed on 21-2-1978 that his case for crossing Efficiency Bar with effect from 1-1-1978 had been considered but he was not allowed to cross the same. The respondent feeling aggrieved with this order, wrote a letter (Exh. P. 4) to the Manager of the State Bank of Pakistan, Lahore requesting him to disclose the reasons for not allowing him to cross Efficiency Bar. The Management in their reply (Exh. P. 5) stated that the reasons for withholding the increment at an Efficiency Bar could not be disclosed under the existing Rules. The respondent, thereafter, served a grievance notice upon his employer. Vide reply Exh. P. 2 the respondent was informed that he had not been allowed to cross Efficiency Bar with effect from 1-1-1978 as he had not been found fit for crossing the same due to his unsatisfactory record of service in respect of which he had already been warned from time to time. He was further informed that his case would be reviewed on 1-1-1979. Thereupon, the respondent filed a petition under section 25-A of the Industrial Relations Ordinance, 1969 before Punjab Labour Court No, I, Lahore. In their reply the Management raised several preliminary objections and also opposed the petition on merits. The learned Labour Court vide its decision dated 6-7-1978 overruled the preliminary objections, accepted the petition and directed the Management to allow the respondent to draw his increment with effect from 1-1-1978. Feeling aggrieved with the impugned decision, the Management has filed the present appeal.
2. I have heard at length the counsel for the appellant-Bank and the respondent in person and have also perused the entire material available on the record.
3. Mr. Asad Hussain Zaidi, the learned counsel for the appellant-Bank has not seriously challenged the impugned decision of the Labour Court on merits but has vehemently contended that neither the respondent had any right to invoke the jurisdiction of the Labour Court under section 25-A, of the Industrial Relations Ordinance, 1969 nor the Labour Court had any jurisdiction to entertain his petition. According to him, the W. P. Industrial and Commercial Employment (Standing Orders)
Ordinance, 1968 is not applicable to the State Bank of Pakistan as it is covered by the first proviso to clause (c) of subsection (4) of section I of the said Ordinance. Before deciding the question of application of W. P. Industrial and Commercial Employment (Standing Orders) Ordinance, 1968 to the State Bank of Pakistan, we have to see whether the respondent as a worker or employee of the State Bank of Pakistan had claimed in his grievance petition under section 25-A, any right guaranteed to him by the said W. P. Industrial and Commercial Employment (Standing Orders)
Ordinance, 1968. It is well settled that if the employee was not claiming any right under the said Ordinance then the question of its application would not arise. In the instant case the respondent did not allege violation of any right under the W. P. Industrial and Commercial Employment (Standing Orders) Ordinance, 1968. Therefore, the question of its application would not arise.
4. The next question, however, which arises for consideration is whether the respondent, being an employee of the State Bank of Pakistan, could approach the Labour Court under section 25-A of the Industrial Relations Ordinance, 1969 claiming relief against the stoppage of his increment. Under section 25-A, a worker may bring his grievance In respect of any right guaranteed or secured to him by or under any law or any award or settlement for the time being in force. Now we have to see whether the respondent had any such right guaranteed or secured to him by or under any law or award or settlement which has been violated. The Wage Commission for Banks and Financial Institution constituted under section 38-A of the Industrial Relations Ordinance, 1969 submitted its report for 1974-75. The decisions contained in the said report are binding on both the employers and employees of Banks and Financial Institutions in terms of section 38-G of the Industrial Relations Ordinance, 1969. The learned counsel for the appellant-Bank has not been able to point out any provision of law or otherwise to show that the said report of the Wage Commission is not applicable to the State Bank of Pakistan. On the other hand, from a mere perusal of the said Wage Commission Report it is crystal clear that the said Report applies to all categories of staff and employees in the nationalised Banks including the State Bank of Pakistan and other Financial Institutions. In fact one of the terms of reference to appoint a Pay Commission for Banks and Financial Institutions was to examine the existing salaries' structure and all other types of allowances, amenities, and facilities including post retirement benefits and all such increases therein as may have been sanctioned recently admissible to all categories of staff and employees in the nationalised banks including the State Bank of Pakistan and other financial institutions. In pursuance of subsection (1) of section 38-C of the Industrial Relations Ordinance, 1969 the Federal Government WS pleased to publish the decisions and the report of the Second Wage Commission for Banks and Financial Institution constituted under the Government of Pakistan, Ministry of Finance and Planning Economic Affairs division's Notification No, SRO-1054(1)/77 dated 31-10-1977).
It is mentioned in this report that the Wage Commission was required to fix rates of wages and determine all other terms and conditions of service in respect of workers of the under-mentioned Bank and Financial Institutions specified in the aforesaid Government Notification :-
(1) State Bank of Pakistan (S. B. P.)
(2) National Bank of Pakistan (N. B. P.)
(3) Habib Bank Limited (H. B. L.)
(4) United Bank Limited (U. B. L.).
' In view of the above, there is not the slightest doubt that the First Award of the Wage Commission for Banks and Financial Institutions, 1974-75 as well as the subsequent Award of the Second Wage Commission for Banks and Financial Institutions, 1978 is applicable to all nationalised Banks including the State Bank of Pakistan and other Financial Institutions.
5. The next question which falls for consideration is whether the respondent has any right guaranteed or secured to him under the said Report or Award against the stoppage of his increment. Under paragraph 258 of the said Report, Efficiency and Discipline (Banks and Financial Institutions) Rules, 1975 have been framed. Grounds for penalties are given under rule 2 which provides that where an employee who commits breach of regulations of Banks/Financial Institutions concerned or of discipline or contravenes instructions/orders issued to him in connection with his official work, or who displays negligence, inefficiency, or indolence or who knowingly does anything detrimental to the interest of the bank/financial institution in which he is serving or is guilty of any other act of misconduct or insubordination, the competent authority may impose on him one or more of the following penalties :-
(a) reprimand;
(b) postponement or stoppage of increments or promotion ;
(c) . . .
(d)
(e) . . .
(f)
(g) . .
' Rule 3 deals with suspension. Rule 4 deals with enquiry procedure. According to this rule, before it is decided to impose any of the above penalties on an employee for an offence of which he has been reported guilty, he shall be called upon by the competent authority to render a written explanation of the charges against him and show cause by such date as may be specified in this behalf as to why disciplinary action should not be taken against him. The employee's explanation together with the charges against him shall be submitted to the authority competent to impose penalty. Under rule 5, the Authority shall either enquire into the case itself or obtain an independent report on the case in writing from an officer or a Committee of officers specifically deputed by the Authority to investigate the case. The report together with the employee's statement shall be laid before the Authority who shall then consider the matter and impose penalty as it deems proper in the circumstances. The decision of that Authority shall be conveyed in writing to the employee concerned. Rule 6 deals with the cases where enquiry procedure laid down under rules 4 and 5 shall not apply. This rule is not applicable to the facts of the instant case. Under rule 7 it is provided that in such cases it shall be just and proper for the Authority to take explanation, where possible, of the employee and award punishment. The remaining rules are not relevant for the purposes of the present case.
6. From the perusal of the above, it is clear that stoppage of increment is a penalty or punishment and before imposing such penalty, the appropriate authority should have adopted the above procedure. It is an B admitted fact that such procedure was not adopted by the Management before stopping the increment of the respondent and no opportunity whatever was afforded to the respondent to explain his position. The impugned order not allowing the usual increment to the respondent is, therefore, in the circumstances clearly against the Efficiency and Discipline Rules contained in the Wage Commission Award, which is a right guaranteed or secured to the respondent. The expression "any award" in section 25-A of the Industrial Relations Ordinance, 1969 is not used in a restricted or limited sense but has been used in a general sense to cover all kinds of legal and valid awards. Wage Commission Award will, therefore, undoubtedly be covered by this expression 'any award' used in section 25-A of the Industrial Relations Ordinance, 1969. Efficiency and Discipline Rules, framed under paragraph 258 is decision No. 73 under Chapter XVII and, therefore, binding under section 38-G of the Industrial Relations Ordinance, 1969 upon all the Banks including State Bank of Pakistan and Financial Institutions and the same, therefore, could be enforced under section 25-A of the Industrial Relations Ordinance, 1969 by a worker. In this view of the matter the Labour Court will be competent and will have the jurisdiction to adjudicate upon such dispute.
7. There is another aspect of the case. State Bank of Pakistan (Staff) Regulations have been framed by the Central Board of the State Bank of Pakistan under section 54 of the State Bank of Pak;stan Act, 1956. Regulation 22 deals with the following penalties :-
(a) Reprimand ;
(b) Delay or stoppage of increment or promotion ; ' In clause IL of this Regulation, it is provided that no employee shall be subjected to the penalties (b), (c), (d) or (e), except by an order in writing signed by the Governor in the case of an officer in Class I or above, or the officer-in-charge of an office or branch in the case of other employees and no such order shall be passed without the charge or charges being formulated in writing and given to the said employee so that he shall have reasonable opportunity to answer them in writing or in person as he prefers and in the later case his defence shall be taken down in writing and read to him. The above requirement can be waived in certain circumstances, which admittedly are not applicable to the present case. Further it is provided under Regulation 28, that no increment will be withheld except as a disciplinary measure under Regulation 22. Thus, stoppage of increment is a disciplinary action of major nature. Thus, even the State Bank of Pakistan (Staff) Regulations referred to above would be applicable to all the employees of State Bank of Pakistan and under these Regulations, the respondent had certain rights before his increments could be stopped.
Admittedly the procedure laid down under the said Regulation 22 has also not been followed by the Management and, thereby the respondent was deprived of the right guaranteed to him under the statutory Regulations framed by the Central Board of the State Bank of Pakistan under the Act, which are binding upon the employer and the employee.
8. In view of the above, it is clear that the respondent had certain rights guaranteed to him both under the Wage Commission Award and Statutory Regulations of the State Bank of Pakistan before he could be punished by stopping his increments. He has been deprived of his statutory rights which he could legitimately get enforced through the Labour Court under section 25-A of the Industrial Relations Ordinance, 1969. In this view of the matter it can safely be held that the respondent was justified to approach the Labour Court for getting his right enforced and the Labourl Court was fully competent to adjudicate upon the same.
9. According to the pleadings of the parties, the duties of the respondent as Coin/Note Examiner, consisted of counting currency notes, sorting the usable currency notes from the unusable ones, bundling and packing them and of writing of details of the daily work done, examination and counting of coins and national prize bonds/picketing and handling of prize bonds and making necessary entries in respect of the same in the relevant books. In view of these duties of the respondent, it is not denied that he is a worker/workman as defined in Industrial Relations Ordinance, 1969.
10. As regards the status of the State Bank of Pakistan, let us examine the relevant provisions of the law in this behalf. State Bank of Pakistan was established under the State Bank of Pakistan Act, 1956 (Act No. XXXI1I of 1956). According to section 3, the Bank is a body corporate and can sue and be sued in the said name. Under section 8(3), the State Bank shall create a Special Agricultural Credit Department, functions of which shall be ; (a) to maintain an expert staff to study all questions of Agricultural Credit and be available for consultation by the Federal Government, Provincial Governments, Provincial Co-operative Banks and other banking organizations and (b) to co- ordinate the operations of the Bank in connection with Agricultural Credit and its relations with the Provincial Co-operative Banks and any other organization engaged in the business of Agricultural Credit, Section 17 of the Act is rather important, which deals with villous kinds of business, which the Bank is authorised to carry on and transact namely :-
(1) The accepting of money on deposit from, and the collection of money for the Federal Government, the Provincial Governments of such Acceding States as may be approved by the Federal Government, Local Authorities, Banks and other persons : provided that no interest shall be paid on deposits received from the Federal Government, a Provincial Government, the Government of an Acceding State or a Local Authority ;
(2) (a) The purchase, sale and rediscount of bills of exchange and promissory notes drawn on and payable in Pakistan and arising out of bona fide commercial or trade transactions bearing two or more good signatures one of which shall be that of a scheduled bank, and maturing within one hundred and eighty days from the date of such purchase or rediscount, exclusive of days of grace ;
(b) The purchase, sale and rediscount of bills of exchange and promissory notes, drawn on and payable in Pakistan and bearing two or more good signatures one of which shall be that of a scheduled bank and drawn or issued for the purpose of financing seasonal agricultural operations of the marketing of crops, and maturing within fifteen months from the date of such purchase or rediscount exclusive of days of grace ;
(c) The purchase, sale and rediscount of bills of exchange and promissory notes drawn on and payable in Pakistan and bearing the signatures of a scheduled bank, and issued or drawn for the purpose of holding or trading in securities of the Federal Government, a Provincial Government or the Government of such Acceding States, as may be approved by the Federal Government and maturing within ninety days from the date of such purchase or rediscount, exclusive of days of grace ;
(d) The purchase, sale and rediscount of bills of exchange and promissory notes drawn and payable in Pakistan and bearing two or more good signatures one of which shall be that of a scheduled bank, or any corporation approved by the Federal Government and having as one of its objects the making of loans and advance in cash or kind, drawn and issued for financing the development of agriculture, or of agricultural or animal produce or the needs of the industry, having maturities not exceeding ten years from the dates of such purchase or rediscount : ' Provided that the Bank may from time to time issue to a Corporation which may have dealings with the time under this sub-clause any directions which can be issued to a Banking Company under the Banking Companies Ordinance, 1962 (LVII of 1962) and in the event of anybody, while carrying out any direction, hereunder, either wilfully making a false statement or wilfully omitting to make a material statement shall be punishable under subsection (1) of section 53 of the said Ordinance and in the event of any contravention or default in compliance with any direction, any Director or Officer who is knowingly a party to the contravention or default shall be punishable under subsection (6) of section 83 of the said Ordinance, and the provisions of section 84 of the said Ordinance shall apply to such proceedings as if such corporation were a Banking Company ;
(e) the purchase, sale and rediscount of such debentures issued by a Public Company or Corporation established by or under any law for the time being in force as the Bank may from time to time approve in this behalf ;
(3) (a) The purchase and sale of approved foreign exchange ;
(b) The purchase, sale and rediscount of bills of exchange including treasury bills, drawn in or on any place in countries whose currency has been declared as approved foreign exchange and maturing within one hundred and eighty days from the date of purchase, provided that no such purchase, sale or rediscount shall be made in Pakistan except with a scheduled bank ;
(c) The keeping of balance with banks in countries whose currency has been declared as approved foreign exchange ;
(d) The making to Local Authorities, scheduled banks or cooperative banks of advances and loans repayable on demand or on the expiry of fixed periods not exceeding ninety days against the security of-
(a) stocks, funds and securities, other than immovable property, in which a trustee is authorised to invest trust money by any law for the time being in force in Pakistan ;
(b) gold or silver or documents of title to the same ;
(c) such bills of exchange and promissory notes as are eligible for purpose or rediscount by the Bank ; and
(d) promissory notes of any scheduled bank supported by documents of title relating to goods, such documents having been transferred, assigned or pledged to any such bank as security for a death credit or overdraft granted for bona fide commercial or trade transaction or for the purpose of financing seasonal agricultural operations or the marketing of crops ; (4-A) The making of loans and advance out of the Rural Credit Fund established under section 17-A for the purposes specified therein ; (4-B) The making of loans and advance out of the Industrial Credit Fund established under section 17-B for the purposes specified therein ; (4-C) The making of loans and advances out of the Export Credit Fund established under section 17-C for the purposes specified therein ;
(5) The making to the Federal Government, Provincial Governments, or Governments of such Acceding States as may be approved by the Federal Government of advances repayable in each case not later than three months from the date of the making of the advance,
(6) The making to institutions or banks, specially established for the purpose of promoting agricultural or industrial development, or for the financing of construction of houses, in the country of co-operative banks of advances and loans for such amounts and on such terms and conditions as the Central Board may decide from time to time ; (6-A) As and when directed by the Federal Government, the purchase, holding and sale of shares and debentures of any banking company as defined in section 5 of the Banking Companies Ordinance, 1962 (LVII of 1962) or of any financing corporation or institution ; (6-B) The providing of finances to scheduled banks or financing institutions on the basis of participation in profits and on such other terms and conditions as the Central Board may decide from time to time,
(7) The issue and purchase of telegraphic transfers, demand drafts and other kinds of remittance made payable at its own branches, offices or agencies ;
(8) The drawing, accepting, making and issue, on its own account or on account of the Federal Government, as the case may be, of any bill of exchange, hundi, promissory note or engagement for the payment within or without Pakistan, of Pakistan or foreign currency payable to bearer or to a banker on demand; but not such business shall be carried on or transacted without the previous approval of the Federal Government;
(9) (a) Subject to sub-clause (b) the purchase and sale of securities of countries whose currency has been declared as approved foreign exchange with and unexpired currency of not more than ten years;
(b) The restriction relating to maturity shall not apply to securities held by the Bank on the date on which this Act comes into force or any securities that may be received as assets under the Pakistan (Monetary System and Reserve Bank) Order, 1947;
(10) (a) The purchase and sale of securities of the Federal Government, a Provincial Government or the Government of an Acceding State of any maturity or of such securities of a Local Authority as may be specified in this behalf by the Federal Government by notification in the official Gazette on the recommendation of the Central Board;
(b) Securities, Debentures and Shares fully guaranteed as to principal and interest by the Federal Government shall be deemed for the purpose of this section to be securities of that Government;
(c) The amount of such securities held at any time in the Banking Department shall be so regulated that the total value of such securities shall not exceed the aggregate amount of the share capital of the Bank, the Reserve Fund and for/fifths of the liabilities of the Banking Department in respect of deposit.
(11) The custody of monies, securities and other articles of value and the collection of the proceeds, whether principal interest or dividends of any such securities;
(12) The sale and realisation of all property, whether movable or immovable which may in any way come into the possession of the Bank in satisfaction, or part satisfaction of any of its claims;
(13) The acting as agent to Federal Government, any Provincial Government, the Government of any Acceding State, or any Local Authority in the transaction of any of the following kinds of business namely:-
(a) the purchase and sale of gold or silver or approved foreign exchange;
(b) the purchase, sale, transfer and custody of bills of exchange, securities or shares in any company;
(c) the collection of the proceeds, whether principal, interest or dividends, or any securities or shares;
(d) the remittance of such proceeds at the risk of the principal, by bills of exchange payable either in Pakistan or elsewhere;
(e) the Management of public debt; and
(1) the transacting of special drawing rights with the International Monetary Fund;
(14) The purchase and sale of gold coin and gold or silver bullion;
(15) The opening of an account with or the making of any agency arrangement with, and the acting as agent or correspondent of a Bank incorporated in any country outside Pakistan or the principal currency authority of any country under the law for the time being in force in that country or any international or regional Bank formed by such principal currency authorities, the investing of the funds of the Bank in the shares and securities of any such international or regional Bank; and the holding and transacting of special drawing rights with the International Monetary Fund;
(16) (a) Subject to sub-clauses (b) and (c) the borrowing of money for the purpose of the business of the Bank, and the giving of security for money so borrowed; (b)No mony shall be borrowed under this subsection from any person in Pakistan other than a scheduled bank or from any person outside Pakistan other than a bank which is the principal currency authority of any country under the law for the time being in force in that country;
(c) The total amount of borrowing from persons in Pakistan shall not at any time exceed the amount of the share capital of the Bank;
(17) The making and issue of bank notes subject to the provisions of this Act;
(18) The performance of the functions of the Bank under the International Monetary Fund and Bank Act, 1950; (18-A) The entering into clearing and payment arrangements with any country or group of countries, on a general or regional or sub-regional basis, participation in the formation and settlement of international payments transactions under such arrangements, and incurring financial and other obligations relating thereto.
(19) Establish credits and give guarantees, and
(20) Generally, the doing of all such matters and things as may be necessary, incidental to or consequential upon the exercise of its powers or the discharge of its duties or functions under this Act.
11. Section 17-A deals with the establishment and maintenance of Rural Credit Fund by the Bank; 17- B with Industrial Credit Fund; 17-C with Export Credit Fund; 17-D with Loans Credit Fund; and 17-E with Housing Credit Fund. According to section 18 of the Act, where in the opinion of the Central Board or of the Governor, circumstances so warrant, the Bank may, notwithstanding any limitation contained in sub-clauses (a) and (b) of clause (2) or sub-clauses (a) and (b) of clause (3) or clause (4) of section 17 (a) purchase, sell or discount any of the bills of exchange or promissory notes specified in sub-clause (a) or sub-clause (b) of clause (2) or sub-clause (b) of clause (3) of section 17, though such bill or promissory note does not bear the signature of a scheduled bank; or
(b) make advance or loss repayable on demand or on the expiry of fixed periods not exceeding ninety days against the various forms of security specified in clause (4) of section 17 or against the security of goods or when the advance or loan is made to a banking company against such other form of security as the Bank may consider sufficient.
12. Under section 21, the Bank shall undertake to accept monies for account of the Federal Government, Provincial Governments and to make payments up to the amount standing to the credit of their accounts respectively and to carry out their exchange, remittance and other banking operations, including the Management of public debt. The Federal Government and Provincial Governments shall entrust the Bank, on such conditions as may agreed upon between the Government concerned and the Bank, with all their money, remittance, and banking transactions in Pakistan and, in particular, shall deposit free of interest all their cash balance with the Bank, The Federal Government and each Provincial Government shall entrust the Bank on such conditions as may be agreed upon between the Government concerned and the Bank, with the Management of public debt and with the issue of any new loans.
13. Under section 22, the Bank is required to make public from time to time the standard rate at which it is prepared to by or to rediscount bills of exchange or other commercial paper eligible for purchase under the Act. Section 23 is again important, under which the Bank is required to sell to or.. By from any authorised dealer in Pakistan, approved foreign exchange at' such rates of exchange at such places and on such conditions as the Federal Government may from time to time by general or special order determine.
14. Keeping in view the above-mentioned functions of the State Bank of Pakistan, it can safely be held that the State Bank of Pakistan is a Banking Industry, which controls the entire banking system in Pakistan and regulates the monetary and credit system of Pakistan and, consequently, the Industrial E Relations Ordinance, 1969, will be applicable to the workers/workme employed in it.
15. As mentioned above, the learned counsel for the appellant Bank has not challenged the impugned decision of the Labour Court on merits.The reason appears to be that before stopping the increment of the respondent, the Management did not follow the procedure as laid down in the.
Wage Commission Award and State Bank of Pakistan (Staff) Regulations 22 read with Regulation
28. The Labour Court, therefore, has rightly accepted the grievance petition of the respondent on merits.
16. For the foregoing reasons, there is no substance in this appeal, and the conclusions drawn by the Labour Court are perfectly correct and require no interference by this Tribunal. This appeal, therefore, is dismissed with costs of Rs, 300.