BPrabhakarrao (Officer on Special duty) 28 May 2011

Employees benefits for co-op banks under liquidation

I am working a State Co-op Bank in Mumbai which is registered under Multi State Co-op Act,1984. The bank lost its banking license in 2003 as per judgement of Supreme Court. It is under liquidation since Dec2005. At present all the deposit holders are paid. Only the equity holders are to be paid. The arbitration in case of advances has been pronounced and the liqudiation process may take another 5 years. Overall the bank is likely to earn good profit at the end of the liquidation. The services of the employees were fully paid at the time of closure of the bank in 2003. However few employees were later taken on rolls as temporary and only lumsump amount is paid every month regularly. Under these circumstances please clarify a) whether employees are eligible for PF and Gratuity ? if so with retrospective date of 2003 or not? b) after liquidation all the employees (10 persons) will be jobless.Is possible for the Liquidator to exercise his power for providing a compensation out of the expected profits in the form of pension to the employees? c) If (a) & (b) are to be negotiated with the liquidator who is dynamic and helpful how we should proceed legally to make a sound proposition? Can any body help me?

B.Prabhakar rao

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5 Replies

(Guest)

SIR,,

KINDLY NOTE THAT.

1.BANK WENT IN TO LIQUIDATION.STAFF DUES FULLY PAID.

2 SOME EMPLOYEES WERE TAKEN BACK ON TEMPORARY BASIS ON PAYMENT OF LUMPSUM AMOUNT PER MONTH

3.YOU MAY REFER TO YOUR JOB OFFER AND APPOINTMENT LETTER FOR TEMPORARY JOB.REFER TERMS OF EMPLOYMENT AND ACCORDINGLY YOU WILL BE PAID MONTHLY DUES.

4.KINDLY NOTE THAT YOUR PERMANENT EMPLOYMENT DUES WERE FULLY SETTLED BY THE BANK.

AND YOUR CURRENT POSTING IS OF TEMPORARY NATURE ON A FIXED AMOUNT MONTHLY.

5.HENCE YOU MAY NOT GET ANY OTHER BENEFITS AVAILABLE TO PERMANENT EMPLOYEES.

6STILL YOU MAY WRITE AND SEND FURTHER DETAILS SO THAT DETAILED REPLY CAN BE SENT.GOOD LUCK.

BPrabhakarrao (Officer on Special duty) 30 May 2011

Dear Nandakumarji,

I am thankful to your prompt reply. Referring to the last line of your reply I have to state as follows

a) Those employees who were reemployed on temporary basis giving monthly lumpsum salaries are not given and appointment letters either by the earlier board of the bank or by Hon'ble Liqudator.

b) Gradually the Hon'ble liquidator started considering enhancement in salaries ( without any basic or DA etc) and also extended leave facilities, LTA, bonus etc which were given like permanent employees.

c) Despite all our best efforts to impress upon the management to consider PF, Gratuity etc.. which are extended in the normal course to regular employees, the management is not convinced. Hence my request to you to help in convincing the managment to extend the regular benefits like PF, Gratuity and also pension since the bank is in profit and also will be in profit at the time of complete liquidation.

d) Sir, Pl clarify whether Hon'ble Liquidator has powers under section 90 for this purpose as per Multi sttate Co-op Societies act,1984 and we should present our case?

B.Prabhakar rao

BPrabhakarrao (Officer on Special duty) 03 June 2011

Dear Nandakumarji,

I have posted my observations for your reply. Please examine and reply suitably.

B.Prabhakarrao

Sajeev Menon (Legal Consultant Dubai 00971 508836442) 11 July 2011

Dear Mr.Prabharrao,

You can approach the liquidator as well the judicial body who have appointed the liquidator to get your redressal. Liquidator always doesnt have that power to exceed his limits but he can submit it before the judiciary to get the consent.

BPrabhakarrao (Officer on Special duty) 16 January 2015

Dear Sir,

In continuation of my earlier i seek your advice on the following

a) The employees who have been paid compensation in 2004 when the bank license was cancelled and services discontinued. Only 10 persons were asked to work for the purpose of liquidation of this Multi State Coop Society.

b)The Liquidator who was appointed in Dec2005 has been kind enough to extend all benefits viz. leave,LTC diwali exgratia., salary rise annually etc as done in case of permanent employees ( salary paidon lumsum basis). However PF facility is not extended and no provision is made in the books for gratuity.

c) Please clarify whether these employees are eligible for compensation under Workman Compensation Act,1923, section 14 para (5) and to what extent? If we are not eligibel under WC Act 1923,what compensation can be claimed and under which provision of the law?

d) Please clarify whether the employees are eligible for PF and Gratuity from 2004 onwards which is not extended now. Whether PF and Gratuity can be extended to employees retrospectively from 2004 and those who are on the verge of 58yrs and above ?

e) If the compensation is possible under WC Act,1923 at what stage of liquidation the Liquidator can decide or employees can make their claim for the same?

B.Prabhakar rao