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
Jeena Abhilash
Hr Professional
+3 Others

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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.....
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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.
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.

Attached Files
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File Type: doc Subsistence Allw..doc (92.5 KB, 1572 views)
File Type: doc SC directive on subsistence allowance to suspended staff.doc (102.0 KB, 940 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.
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
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
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
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.
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.
Sorry, it is not the ID Act which defines the quantum of Subsistence Allowance. It is the Standing Orders which does so. Vasant Nair
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