Legal protection for MDs/CEOs of private banks against unlawful dismissal, removal, release and termination

It is often seen that top management of the private banks and/or non-bank financial institutions (NBFIs) dismiss, terminate, remove or release their Managing Directors (MDs)/Chief Executive Officers (CEOs) at will. It is open to the employees including the MDs/CEOs in the service of the republic or of any statutory public authority to make applications before the Administrative Tribunal established under the Administrative Tribunals Act, 1980. As per section 4 of the said Act, applications before the said tribunal can only be made by persons in the service of the republic or of any statutory public authority. So, as per the provision of the said section, MDs/CEOs of the private banks and NBFIs cannot seek the assistance or intervention of the said tribunal against their dismissal, removal, release and termination. Now, the question arises, whether there is any protection for the employees working in private sectors?

Bangladesh Labour Act, 2006 was established to secure the rights of the labourers and for that purpose Labour Court was established under section 214. The term 'labour' is defined in section 2(65) of the said Act and every employee falling under the definition of labour has the right to seek the assistance of the Labour Court against his grievance. But as per section 2(65) of the said Act, MDs/CEOs of the private banks and NBFIs do not fall within the definition of 'labour'; rather they fall within the definition of 'employer' within the meaning of section 2(49) of the said Act. So, as per the provisions of the said Act, MDs/CEOs of the private banks and NBFIs cannot file any suit/application/case before the Labour Court against their dismissal, removal, release and termination.

Although the door of Administrative Tribunal and Labour Court is closed for the MDs/CEOs of the private Banks and NBFIs, the door of the civil courts established under the Civil Courts Act, 1887 is always open to them. This is the only available court-based forum which the MDs/CEOs of the private banks and NBFIs can avail against their dismissal, removal, release and termination. Now, the question arises, what reliefs they can claim before the civil court? Before answering the aforesaid question, let us discuss the nature of the relationship between bank/NBFI and its MDs.

It is a well settled legal principle that the relationship between a private company/institution/bank/NBFI with his employees is that of a master and servant and the master and servant relationship is not enforceable in the eye of law. So, MDs/CEOs of the private banks and NBFIs cannot seek reinstatement of his service by way of mandatory injunction under section 55 of the Specific Relief Act, 1877 as the same is barred under section 56(e) of the said Act. It is well recognised view of our apex court that an injunction cannot be granted to prevent the breach of a contract, the performance of which would not be specifically enforced. In fact, it is the right of the employer to discharge his employee and that of the employee to quit his employer's service. The aforesaid principal has been affirmed by our apex court in 38 DLR (AD) 81 and 7 BLC (AD) (2002) 1.

Moreover, the terms of employment among MDs/CEOs and private banks and NBFIs are regulated by contract not having any statutory force. As such, their legal right is the creation of contract not conferred by law and because of that, the MDs/CEOs of the private banks and NBFIs do not have any 

legal character within the meaning of section 42 of the Specific Relief Act, 1877 and resultantly they are barred to file a declaration suit. The aforesaid view has been affirmed by our apex court in 29 DLR (AD) (1977) 41 and 53 DLR (2001) 48.

The only available forum to them is to file a suit for compensation in the competent civil court having appropriate jurisdiction. However, if they were dismissed, removed, released and terminated with any stigma and they were not allowed to show sufficient cause in their defence against such stigma, then the same shall be treated as violation of the principal of natural justice. In that case, they can file a declaratory suit for removing that stigma under section 42 of the Specific Relief Act, 1877.

Apart from the court, the MDs/CEOs and private banks and NBFIs can make complaint to Bangladesh Bank against their dismissal, removal, release and termination. As per BRPD Circular Letter No. 18 dated 27.10.2013 and BRPD Circular Letter No. 20 dated 23.12.2014 issued by Bangladesh Bank in exercise of its power under section 45 of the Banking Companies Act, 1991, the MDs or CEOs of bank companies cannot be dismissed, released and removed from his office without prior approval from Bangladesh Bank. So, if any MD or CEO of bank companies is dismissed, released and removed illegally without prior permission of Bangladesh Bank, then the said MD or CEO can make a complain to Bangladesh Bank and Bangladesh Bank shall take necessary measures accordingly.

Now, the question arises whether Bangladesh Bank can declare such dismissal, termination, release and removal illegal for not obtaining their permission and reinstate the dismissed MD or CEO of bank companies in his original post?

In reply to such queries, it is mentionable that Bangladesh Bank has been vested with ample power as regulating and supervising authority of the banks and NBFIs in this regard. There are instances where Bangladesh Bank has reinstated dismissed officer to their original post. For example, Bangladesh Bank vide BRPD Circular Letter No. 21 dated 16.09.2021, has reinstated dismissed officers of banks (whose employment was terminated during the period 01.04.2020 to 15.09.2021) to their original post.     

Additionally, Bangladesh Bank vide BRPD Circular Letter No. 07 dated 28.05.2015 has directed the banks to stop arbitrary dismissal of their employees and to maintain professionalism while recruiting employees. Besides, in the said circular, Bangladesh Bank also directed the banks to amend their service rules regarding resignation, termination, or dismissal in line with the International Labour Organization (ILO) Conventions, Bangladesh Labour Act, 2006 and directives given by Bangladesh Bank.  

The Writer is an Advocate, Supreme Court of Bangladesh.