ISLAMABAD: The Islamabad High Court (IHC) on Tuesday set aside demotion of 112 vice presidents of the Zarai Taraqiati Bank Limited (ZTBL) and also scrapped the order of the bank administration to retrieve the perks these officers received after being promoted.

IHC Chief Justice Athar Minallah observed that the order for demotion of employees was illegal because it was taken without approval of the ZTBL board of directors which had been non-functional for over three years.

The employees alleged that in a surprise move on March 6, around 150 employees of the bank were issued letters by the current management, informing them that the promotions they had earned back in 2015 and 2018 stood cancelled. This decision came as a shock because the employees had not even been provided a right of hearing before their demotion.

The high court noted that by virtually keeping one of the most important financial institutions in the public sector dysfunctional for three years, the federal government has failed in its statutory duty, inter alia, under the Bank Nationalisation Act, 1974.

Step declared illegal as it was taken without approval of the bank’s board of directors

Such a failure definitely has profound consequences for the constitutionally guaranteed fundamental rights of the petitioners and the general public.

Justice Minallah had at a previous hearing restrained the ZTBL management from recovering the additional amount which the demoted assistant vice presidents were getting when they were promoted as vice presidents.

From 1960 to 2002, the ZTBL functioned as an attached government department. After the bank was reformed in 2002, it was converted into a public sector company whose affairs were to be run by a board of five to seven independent and tenured directors.

In 2005, the ZTBL board had decided to reform the service structure of employees. Accordingly, all existing employees were offered the option to shift from government-style employment terms to more corporate-style employment terms. This new structure was called ‘options’.

In 2013 and 2018, the Supreme Court upheld the vires of the ‘options’, providing the switchover of employees from the earlier service structure to ‘options’ is demonstrably voluntary.

Petitioners Nadeem Akhtar Malik and others have claimed that through the impugned demotion orders, the bank’s current management has altogether resiled from the 2005 Promotion Policy as well as all ‘options’ signed thereunder. This has been done by the bank’s management allegedly in the garb of implementing a Supreme Court order.

The petitioners’ counsel Umer Gillani and Barrister Afzal Hussain claimed that as a matter of fact the Supreme Court never ordered en masse demotions or recovery of salaries earned in the past.

Also, under the Public Sector Companies (Corporate Governance) Rules, 2013, all matters regarding the implementation of court judgements have to be put before the board. However, in the present case, the management bypassed the board and took decisions which it had no jurisdiction to take.

This is because the ZTBL board, which is a statutory body, is currently non-existent because the federal government has not bothered to appoint one for years. As a result of which, the bank’s affairs are in complete disarray. It is claimed by the aggrieved employees that this lacuna has been exploited by those who are in the SDPC as the demotion order was issued at the behest of SDPC whose members have a conflict of interest as their own promotions will benefit from the demotion of those who had chosen the service structure under ‘options’.

The petitioners requested the high court to set aside their demotion orders and restore them to the post of vice president.

Published in Dawn, March 3rd, 2021