Employer cannot force employees to open salary accounts with official bank: Kerala HC

KOCHI: An employer cannot insist that all employees open a salary account with its official banking firm, says the Kerala high court.
A single bench of the court issued the ruling after considering a petition (WP-C No. 37894/2016) filed by TM Dinesh Kumar and seven other employees of Malabar Cancer Centre (MCC) at Thalassery. They had challenged a circular issued by the governing body of Malabar Cancer Centre Society asking all employees to open salary accounts with its official banking partner, IDBI Bank.
The petitioners had accounts with State Bank of India (SBI) and didn't want to shift their accounts. Their petition said they haven't received salaries from August last year and were also deprived of festival allowances such as Onam Advance.
Ruling that denial of salary for not opening account with IDBI Bank is illegal, the court said in the judgment, "As far as the withdrawal of salary through a bank account is concerned, it will not be necessary that each of the employees should have the salary account with official bank itself. The official bank can very well transfer the salary of the petitioners to their accounts existing in SBI, on a request/standing instruction from the accounts wing of the 1st respondent (MCC). For such transfers, the 1st respondent need not compel the petitioners to open zero balance account or salary account with IDBI, in case they do not want to have any transaction with the IDBI."
Further, the court said the issue, which arose on the ground that no discussion was held with employees regarding the account change, could have been resolved at the end of MCC's governing body itself. The matter reached the high court as a result of the ego which played between the petitioners and those at the helm of affairs at MCC, the court criticized. The court ordered MCC to transfer the salaries and allowances, including arrears, of the petitioners to their accounts with SBI without any further delay.