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Union Bank of India Served Show Cause Notice for Failing to Pay Bonus to Casual Workers
Union Bank of India faces legal action after failing to pay bonus to casual workers despite formal agreement in a conciliation meeting with the Labour Commissioner.
Author: Neha Bodke
Published: June 4, 2025
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In a significant development highlighting ongoing labour disputes in the banking sector, the Chief Labour Commissioner (Central), Government of India, has issued a Show Cause Notice to Union Bank of India for failing to pay bonus to its casual and temporary employees, despite formal assurances made during conciliation proceedings.
The notice has been issued under Section 28 of the Payment of Bonus Act, 1965, holding the bank accountable for not only violating statutory provisions but also ignoring multiple official requisitions in connection with the industrial dispute raised by the All India Union Bank Employees Federation (AIUBEF).
What Led to the Notice?
The roots of this action lie in a dispute raised by the AIUBEF, which alleged that thousands of casual workers employed across Union Bank branches—including temporary staff and personal drivers—had been denied their rightful bonus under the law.
To address the matter, a conciliation meeting was convened on December 11, 2024, between the union and the bank's representatives. Present at the meeting were:
- Mr. A.R. Lakra, Chief Manager (HR), Union Bank of India
- Mr. Chanchal Kumar, Senior Manager (HR), Union Bank of India
- Mr. Jagannath Chakraborty, General Secretary, AIUBEF
During the proceedings, the bank acknowledged its obligation under the Bonus Act and submitted an official letter (No. HR:HRAD:19944:2024 dated 12.11.2024) committing to pay bonus to all eligible casual workers by December 31, 2024.
Formal Agreement—But No Implementation
The union accepted the submission, and the conciliation officer closed the matter as Resolved on Conciliation (ROC). It was also agreed that the bank would submit details of the payment to the conciliation office by January 31, 2025.
However, the union later approached the office of the Chief Labour Commissioner on multiple occasions—both before and after the December deadline—reporting that the bonus had not been paid to the majority of casual workers, in direct violation of the agreed terms.
CLC Follow-Up Met With Silence
Following the union’s complaints, the Chief Labour Commissioner sent two official communications to Union Bank of India:
Letter dated February 6, 2025
Reminder dated March 19, 2025
Both letters sought an update on the status of the bonus payment as per the conciliation agreement. Yet, the bank did not respond to either of these official correspondences, nor did it submit any proof of compliance.
Show Cause Notice: A Legal Step Forward
With no response and no sign of implementation, the Chief Labour Commissioner has now escalated the matter by issuing a Show Cause Notice under Section 28 of the Payment of Bonus Act, 1965. The bank has been directed to reply within seven days of receiving the notice, explaining:
- Why bonus payments were not made in line with the Act and the conciliation agreement
- Why no response was provided to the CLC’s letters
- Why legal action should not be initiated under the relevant provisions of the Bonus Act
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Failure to respond or justify its actions could lead to penal consequences, including fines or further prosecution under labour laws.
Background: Terms of the Conciliation
The conciliation meeting on December 11, 2024, was convened after the AIUBEF filed a formal dispute over the non-payment of bonus to casual and temporary workers, including those in Kolkata Zone. The union provided a list of such employees to the conciliation officer.
The bank's management agreed to:
- Pay bonuses to all eligible casual workers as per Payment of Bonus Act, 1965
- Complete the payment process by December 31, 2024
- Submit details of the payment to the CLC office by January 31, 2025
These decisions were formally recorded and acknowledged by both parties.
What’s at Stake?
This case shines a light on a larger issue of informal employment practices in public sector banks, where thousands of casual workers perform regular duties without formal recognition or benefits.
The outcome of this Show Cause Notice may set a critical precedent for similar cases pending across the country in other banks and public sector institutions.
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