Industrial Relations And Labour Laws
Korgaonkar K A
Srinath Sai Ram
Hr Manager
Consultant & G.m.
V. Balaji
Ir & Hr
Service As Dgm-hr/legal
+3 Others

Thread Started by #Prashant B Ingawale

Dear Seniors,
If we add the clause in Appointment Letter of the Workman that during domestic enquiry proceedings the Subsistence Allowance would be only 50% of ( Gross Wages= Basic + DA + HRA+ Other Allowances )
Then irrespective of duration of the domestic enquiry proceedings employer would liable to pay only 50 % Subsistence Allowance?
Is there any judgement regading this?
Thanks in anticipation.....
17th November 2012 From India, Pune
Dear Prashant,
Going by the apex court judgment, payment of subsistence allw. during the pendency of domestic inquiry is unavoidable. Failure to do so would weaken our defence and would result in judgment going in favour of the accused . You may refer Capt.Paul Antony Vs.Bharat Gold Mines Ltd., settled by the SC about 10 yrs. ago on this very issue is worthy to take clue from. I can post this judgement ASAP.
17th November 2012 From India, Bangalore
Dear Prashant,
Here are the attachments relevant on the subject of suspension, inquiry, payment of subsistence allw. etc. and collection of some other comments & remarks, opinions to enlighten the matter. A HR person if keep referring such materials as frequently as possible would become know of things matters most.
17th November 2012 From India, Bangalore

Attached Files
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File Type: doc Subsistence Allw..doc (92.5 KB, 1547 views)
File Type: doc SC directive on subsistence allowance to suspended staff.doc (102.0 KB, 916 views)

If the suspension is extended beyond 90 days, the employee should be given 75% of pay. In some State Act (like that of Kerala Payment of Subsistence Allowance Act) if the suspension is extended beyond 180 days the employee should be paid 100% of salary. Salary for all purpose shall include basic salary and dearness allowance. At the same time if the extension of suspension is due to non cooperation of the suspended employee to appear for enquiry, the allowance shall be withheld.
17th November 2012 From India, Kannur
There are legal provisions which apply to cases where an employee is suspended pending enquiry into charges levelled against him/her.
Moreover, why do you want to include such clause in the appointment letter. It is best avoided.
After all instances of suspension are rather rare and as and when they occur, the provisions of law would automatically apply.
Vasant Nair
19th November 2012 From India, Mumbai
Dear member
First and foremost, I agree with Vasant that , Why do you want to include a clause of Subsistence allowance in the appointment letter as the cases are very rare when you suspend a workmen pending enquiry.
Secondly the provisions of subsistence allowance are clearly defined and what ever you put in the appointment letter will not hold good as the provisions you are mentioning are less favourable to the workmen then specified in the law.
Preetam Deshpande
19th November 2012 From India, Mumbai
It is well defined in ID Act, about the quantum of payment towards subsistence allowance when you put someone on "suspension pending enquiry". Whehter you mention in your appointment or not, this will automatically get applied. Mentioning the same in the appointment letter will be redundant and probably, signals negative message to a new comer.
Say positive things and benefits avaialble to him on account of taking up his offer and general terms of service int he appointment letter. Other things like the one you specified can be spelt in Standing orders which you make him read and understand.
V. Balaji
19th November 2012 From India, Madras
The ID Act is silent on subsistence allowance.It is the Standing Orders Act which makes subsistence allowance mandatory as Madhu has pointed out.In establishment not covered by Standing Orders Act it is advisable to include it as aterm if employment.
19th November 2012 From India, Thiruvananthapuram
No, it is an established law that any provisions of the Act cannot be overruled by a mutual contract. Any contract contrary to the provisions of the Act will be nullity.
If there is a provision to pay 75% of the wages after 90 days, in the standing order Act, it cannot be legally sustainable if the amount is paid @50% by a mutual contract.
19th November 2012 From India, Delhi
Sorry, it is not the ID Act which defines the quantum of Subsistence Allowance. It is the Standing Orders which does so. Vasant Nair
19th November 2012 From India, Mumbai
Dear Prashant ji, I suggest to issue appointment letter as per attached draft which is in KISS formula. Always adopt KISS.... any where, any time. Thanks with regards. Keshav Korgaonkar
26th November 2012 From India, Mumbai

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File Type: doc draft appointment.doc (25.5 KB, 77 views)

Dear friends,

I observed many friends in HR tried to :

1. Include a clause in the appointment Order "as during the probation...can be terminated without notice, without assigning any reason whatsoover"..

2. "Probation period can be extended at the discretion of the management"

3."Duties and responsibilities, terms & conditions of your apptt. etc. will be issued to you in due course" and so on.

It is my humble opinion these kind of one sided terms does not stand to the scrutiny of law and would fail at rendering natural justice.

Moreover when the terms and conditions are framed it is always desirable to list out almost all possible & applicable terms & conditions of apptt., and attach them to the offer stage itself, if possible, mention clearly under what circumstances the probation could be extended and upto what period. We should not leave to the extent possible, every terms unambiguous. Clearly defined every terms and conditions would avoid any nuances arising in the administration of HR functions.

Also the communications should be in writing, duly acknowledged and accepted by the employee concerned.

And importantly the terms, rules & regulations should invariably consistent with the law of the land and none should ultra-vires any act or legislation applicable.

Similarly when HR is forced to take any disciplinary action against any employee at whatever may the levels it shall be taken up only thro' the Domestic Inquiry route without fail. For whatsoever may be the reason short circuiting the procedures would result in litigations going against the employer.

26th November 2012 From India, Bangalore
Can we pay the increment during the suspension period
13th March 2018 From United States, Huntsville
Dear Sridhar, While an Employee is under "Suspension" he is eligible for "Subsistence Allowance" in what context, you are proposing to pay Increment.Please elaborate your proposal
13th March 2018 From India, New Delhi
During the suspension period the employer employee relationship remains and in the absence of any express order saying that the employee placed under suspension pending enquiry is not entitled to any increment, he should be paid increment due and the subsistence allowance should be paid based on the increased salary. Obviously, subsistence allowance is a percentage (50%, 75% or 100%, as the case may be) of his pay and once his pay is increased by the element of increment given, the subsistence pay will also increase.
No doubt, if your increments are purely based on performance, you need not pay it. But if the employee is under a time scale with annual increments marked against each grade, he should be paid the increment.
In support of the above there are a lot of court cases available. One case is attached for your reference.
14th March 2018 From India, Kannur

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File Type: pdf Increment during suspension period.PDF (209.3 KB, 66 views)

Whether to deduct epf ,esic and labour welfare from 50 % of subsistence allowance processed?
22nd October 2018 From India, Kannur
Subsistence allowance is an allowance paid to worker for his survival and during the suspension period the worker is not on duty. Therefore, it will not come under the definition of wages under the EPF& MPAct and no PF to be deducted from the amount so paid. At the same time, since the employee is an insured person even though he is under suspension, the amount paid for his survival, ie, the subsistence allowance, will attract ESI contribution.
23rd October 2018 From India, Kannur
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