‘Bank employees who resign cannot claim VRS pension’

If a bank employee has completed the qualifying years of service, should his/her resignation be considered for voluntary retirement?

Published: 06th September 2017 09:07 AM  |   Last Updated: 06th September 2017 09:07 AM   |  A+A-

By Express News Service

BENGALURU: If a bank employee has completed the qualifying years of service, should his/her resignation be considered for voluntary retirement? Is an employee, who has resigned under different bank regulations, entitled to receive pension? The high court has said ‘no’ to both questions..Justice Raghvendra S Chauhan, in a recent judgment while dismissing a batch of petitions filed by many employees against banks, said that law does not permit to treat resignation as voluntary retirement and employees who had resigned are not entitled to pension.

“...The law does not permit the blurring of the difference between the two on the ground that if an employee has completed the qualifying service for the purpose of pension, then his resignation would be deemed to be a ‘voluntary retirement’. Hence, the argument of the counsel for petitioners is clearly unsustainable,” the judge observed. 

The judge also categorically held that once the period for opting for the pension scheme is over, the employees cannot be permitted to exercise their option for the scheme again. 
According to the order, the petitioners joined service in different banks between 1969 and 1985 either as officers, clerks, or sub-staff. During their service, a dispute arose between the employees and the managements of 58 banks with regard to the introduction of a pension scheme as a second retiral benefit in lieu of the Contributory Provident Fund. 

Eventually, on October 29, 1993, a settlement was reached between the employees and the managements, according to which those employees who voluntarily retired after a qualifying service of 20 years would be entitled to receive proportionate pension. Even by 2007-2010, none of the banks had introduced VRS. But wanting to exit from their bank, the petitioners resigned during this period. The employees demanded that another opportunity should be given to them for opting for the pension scheme. Finally, another option to join the pension scheme was granted to employees who were either serving or had retired, or had opted for voluntary retirement. However, those who had resigned were told they were not entitled to receive pension. This was challenged before the court.

The bank is justified in disallowing the petitioners from exercising their option for the pension scheme. Hence, the orders dated April 7, 2014, rejecting the representations filed by some of the petitioners, are legally valid Justice Raghvendra S Chauhan


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