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Wages for the period of suspension

Employment Relations

&

Industrial Relations Law

[ERIRL]

Individual Project


Guided by

Prof. V. Nagaraj

Prepared by

Vipul Khanna

H11119

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Introduction

An employee charged with an offence is, in most cases allowed to continue in his job while the disciplinary

proceedings are in motion. It is only in very serious cases, when the employer feels that his retention in

office is likely to be abused by him to tamper with the evidence of his offence, or is likely to undermine

office discipline or public confidence in organisation, is he suspended, i.e., temporarily relieved of hisresponsibilities till he is cleared of the charge or punished. Even while in suspension he is allowed to draw

wages (though in a reduced scale) so that he and his family are not totally left destitute for the duration.

The issue of wages during suspension has been addressed insection 10A of theIndustrial

Employment (Standing Orders) Act, 1946

Reference to the relevant section of IndustrialEmployment (Standing Orders) Act, 1946 dealing withsubsistence allowance

10(1) Where any workman is suspended by the employer pending investigation or inquiry into complaints

or charges of misconduct against him, the employer shall pay to such workman subsistence allowance--

(a) at the rate offifty per cent of the wages which the workman was entitled to immediately

preceding the date of such suspensions, for the first ninety days of suspension; and

(b) at the rate ofseventy five percent of such wages for the remaining period of

suspension if the delay in the completion of disciplinary proceedings against such workman

is not directly attributable to the conduct of such workman.

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10(2) If any dispute arises regarding the subsistence allowance payable to a workman under sub-section

(1), the workman or the employer concerned may refer the dispute to the Labour Court, constitutedunder

the Industrial Disputes Act, 1947 (14 of 1947), within the local limits of whose jurisdiction the industrial

establishment wherein such workman is employed is situated and the Labour Court to which the dispute is

so referred shall, after giving the parties an opportunity of being heard, decide the dispute and such decision

shall be final and binding on the parties.

10(3) Notwithstanding anything contained in the foregoing provisions of this section, where provisions

relating to payment of subsistence allowance underany other law for the time being in force in any State

are more beneficial than the provisions of this section, the provisions of such other law shall be

applicable to the payment of subsistence allowance in that State.

AnalysisImportant aspects of section 10A have been discussed below:

The words not directly attributable to used in Section 10A(1)(B) is of special significance since it

intends to bring forth the fact that it is a beneficiary legislation for the workman and intends to penalize

the workman only if the workman tries to unjustifiably, deliberately or designedly tries to drag or prolong

the domestic inquiry. The word directly used prior to attributable to in Section 10A(1)(b) of the act

makes a big difference to emphasize that in order to deny a workman subsistence allowance at the rate of

75 per cent, the delay should be directly attributable to the conduct of such workman in completion of the

disciplinary proceedings and not that every kind of delay is covered by the said provision. In the field of

interpretation of statutes the court always presumes that the legislature inserted every part thereof with a

purpose and the legislative intention is that every part of the statute should have effect.

In the B.D Shetty v. M/s Ceat Ltd. case it was upheld that if the workman approaches

judiciary to protect himself from prejudice likely to occur in domestic inquiry and gets an

order from a competent judicial authority staying the proceedings of the internal domestic

inquiry till the disposal of the case, it cannot be said that delay on that account in completionof disciplinary proceedings is directly attributable to the conduct of such workman because

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stay of further proceedings of domestic inquiry does not depend upon the mere wish of the

workman himself.

Important fact to be highlighted before presenting the next issue-

Under Section 15 of this act the appropriate government may make rules to carry out the purpose of

Industrial Employment(standing orders) act.

Such rules may include setting out model standing orders for the purpose of this Act.

The words any other law in section 10A(3) is of extreme importance in deciding the beneficial

scope/coverage of section 10A.

In the May and Baker v. Kishore Jaikishandas Ichoporia v. case the Bombay high court

held that the words, any other law appearing in sub-section (3) would not cover the Model

standing orders as the words used were any other law and not any law and the Model

Standing Orders were the derivatives of the act itself as a result of appropriate government

framing rules under section.

Issue of whether Subsistence allowance administered to the employee during the period of suspension

can be recovered if he/she is proven guilty.

In the R. Govendaraj and Others v. Govt. Tool Room and Training centre the Karnataka

High court observed that any provision which allows for recovery of subsistence allowance

already paid to the employees (during the suspension period) from the salary of the employee

after he/she has been found guilty would be arbitrary and therefore if the provision is

interpreted in that manner, it is likely to come into conflict with Article 14 of the Constitution

on the ground that it is patently arbitrary and unjust for it would amount to denial of

subsistence allowance to a suspended employee, which is essential for his survival. Further it

would be violative of Section 10-A of the Act and therefore invalid.

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Issue of whether the suspended employee is entitled to increments in his pay and allowances and thereby

subsequent revisions of Subsistence allowance during the suspension period.

In the Reserve Bank Of India vs Bhopal Singh Panchal Supreme court established that the subsistence

allowance paid to the suspended workman is liable to be adjusted against his pay and allowances if at all he

is held to be entitled to them by the competent authority. The competent authority while deciding whether

an employee who is suspended in such circumstances is entitled to his pay and allowances or not and to

what extent, if any, and whether the suspension period is to be treated as on duty or on leave, has to take

into consideration the circumstances of each case. It is only if such employee is acquitted of all blame and is

treated by the competent authority as being on duty during the period of suspension that such employee is

entitled to full pay and allowances for the said period. In other words, the Regulations vest the power

exclusively with the employer to treat the period of such suspension as being on duty or on leave . The

power thus vested cannot be validly challenged. During this period, the employee renders no work. He is

absent for reasons of his own involvement in the misconduct and the employer is in no way responsible for

keeping him away from his duties. The employer, therefore, cannot be saddled with the liability to pay him

his salary and allowances for the period. That will be against the principle of 'no work, no pay' and will be

inequitable to those who have to work and earn their pay. As it is, even during such period, the employee

earns subsistence allowance by virtue of the Regulations. In the circumstances, the employers power in that

behalf is unassailable.

Proceedings when there is no provision in the rules of the company for the payment of subsistence

allowance

In the Bibhu Deb Roy v J.M Savery case the Guwahati High court established that even

though the provision for payment of subsistence allowance does not exist in the rules of a

company yet the company is bound to pay subsistence allowance as per the principles laid

down in section 10A of The Industrial Employment(standing orders) act,1946.

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References

Industrial Law by Arun Kumar

Labour and Industrial Relations by PK Padhi

Practical Guide to Industrial Employment (Standing Orders) Act and Rules by H L kumar

Indiankanoon.org

Textbook on Labour & Industrial Law by Dr. H.K. Saharay

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