Case Study: “No Work, No Pay” – Supreme Court Clarifies Employer’s Right in Bank of India v. T.S. Kelawala

📌 Case

Bank of India v. T.S. Kelawala and Others
Civil Appeal No. 2581 of 1986 & Civil Appeal No. 855 of 1987

⚖️ Court and Date

Supreme Court of India
Judgment delivered on 4 May, 1990
Bench: Justice P.B. Sawant & Justice Kuldip Singh

📜 Relevant Law

• Industrial Disputes Act, 1947 – Section 2(q) (definition of strike), Section 2(rr) (definition of wages)
• Payment of Wages Act, 1936 – Section 7(2)(b) and Section 9
• Principles from English cases and prior Indian precedents (e.g., Buckingham & Carnatic Co. Ltd. v. Workers, Bharat Sugar Mills Ltd. v. Jai Singh)

🏛️ Background

The dispute arose when Bank of India employees went on a four-hour strike on 29 December 1977 during crucial banking hours to support demands for wage revision.

• Therefore, a pre-emptive circular was issued by the bank, indicating that full-day wages would be deducted if the strike was engaged in by the employees.
• After the strike, the bank deducted one full day’s salary for those who participated.
• Employees challenged this in the High Court, which ruled in their favour, holding that the bank could not unilaterally deduct wages without enquiry or specific contractual provisions.

A second appeal involved a company alleging that its employees engaged in a go-slow agitation, drastically reducing production during July 1984. The company deducted their wages for that month, which was also challenged as an unfair labour practice.

⚖️ Legal Issue

Whether an employer can unilaterally deduct wages for the period employees go on strike or adopt go-slow tactics, without holding an enquiry or having explicit contractual provisions permitting it.

📌 Key Legal Findings

The Court clarified the distinction between:

• Right to strike (as a legitimate weapon) and
• Right to receive wages (dependent on work done).
• Even if a strike is legal, employees are not entitled to wages for the period of strike.
• Attendance without actual work does not constitute fulfilment of the contract of service.
• No disciplinary enquiry is needed when misconduct (strike/go-slow) is undisputed and on a mass scale.
• Contract of employment is divisible — wages can be computed on a pro rata basis.
• In case of go-slow, which is considered serious misconduct, the employer must conduct an enquiry to establish the fact and extent of loss if it is disputed.

⚖️ Judgment

• Civil Appeal No. 2581 of 1986 (Strike Case):
  • The Supreme Court upheld the bank’s action.
  • Held that employees are not entitled to wages for the day if they go on strike during crucial hours, even if they resume later.
• Civil Appeal No. 855 of 1987 (Go-slow Case):
  • The Court recognised go-slow as serious misconduct.
  • Upheld the employer’s right to deduct wages proportionately when proved.
  • Directed that the company should not deduct more than 5% of wages for July 1984, based on the facts.

📌 Conclusion

The Supreme Court settled the law that:

• “No work, no pay” is a valid principle.
• An employer can deduct wages for strike or go-slow even without explicit rules, if the absence or misconduct is admitted or proved.
• A disciplinary enquiry is required only when misconduct is disputed.
• The contract of employment is divisible, and wages are earned for work actually done, not mere presence.

💡 Key Learning

• Strikes may be a legal weapon, but they come with the economic consequence of loss of pay.
• Legal or illegal status of a strike does not affect the right of the employer to deduct wages.
• Go-slow is a covert, damaging misconduct—requiring proof before wage deduction.
• Employers can act via administrative instructions when service rules are silent, as long as not inconsistent with any law.
• This case firmly established the principle of reciprocity: wages for work, and work for wages.

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