UCO Bank suffered a defeat when the Supreme Court denied pension payments to an employee who worked more than ten years before his dismissal for misconduct. The Supreme Court bench of Justices Abhay S. Oka and Ujjal Bhuyan supported the Punjab & Haryana High Court decision which required UCO Bank to provide pensionary benefits to the employee.
The employee received removal in 1999 because of misconduct allegations but the appellate authority granted terminal benefits in 2000 which became the final decision. The Labour Court subsequently lowered the penalty but the High Court maintained the removal status while preserving eligibility. The employee chose pension benefits through a Bipartite Settlement in 2010.
UCO Bank claimed that Pension Regulations of Regulation 22 prohibits pension payments to employees who have been removed from their positions. The Court made a ruling that the Bipartite Settlement took precedence because it received its authority from the Industrial Disputes Act.
The Court relied on Bank of Baroda v. S.K. Kool precedent to establish that employees who serve more than ten years qualify for pension benefits even when they get dismissed. The Court determined UCO Bank had no valid reason to withhold pension payments because statutory settlements take precedence over bank regulations.
