Industrial Relations And Labour Laws
[email protected]
Finance Manager
Manish Bali
Head - Ir/hr
+1 Other

Kindly confirm whether the suspended employee is eligible for the benefits mentioned below apart from the payment of susbsistence allowance, during suspension period?
1. Bonus
2. Exgratia
3. Earned Leave Accrual
4. Gratuity

From India, Bangalore
The eligibility for benefits other than subsistence allowance depends upon the conditions on which the suspension is revoked. If the charges are proved against the employee, the management will take a decision, whether to terminate him by paying the benefits or to dismiss him without paying any benefits. In case of termination simpliciter or discharge the employee will be paid what all benefits are available if he had not been under suspension. On the other hand, if the misconduct for which the employee was suspended was very grave like moral turpitude, violence at workplace etc, and on the basis of the enquiry there was no punishment lesser than dismissal, then the entire benefits will be forfeited. Section 4(6)(b) of the Payment of Gratuity Act also allows forfeiture of gratuity on the grounds of misconducts involving moral turpitude and similar offences.

In either case, during the period of suspension an employee is eligible only to subsistence allowance of 50% of salary for the first 90 days of suspension and 75% for the remaining days of suspension, if the suspension continues beyond 90 days.

In case the employee is exonerated, then obviously he will be getting all benefits including difference of actual salary and the subsistence pay given. For this also he has to wait till the enquiry is over.



From India, Kannur
Dear Sir,
Thanks for your valuable reply.
In our case, the suspension is more than 180 days and we are paying subsistence allowance of 90% of salary. The enquiry is getting delayed for some or the other reasons. In this situation, we are not knowing when the enquiry will be completed.
Our concern is whether are we required to make provision in our books for the Bonus, Ex-gratia, Gratuity and EL, since our Accounts dept wants to close the books of account for the year 2012, so they are pressurizing for making the provision.
And also when we allot EL for the year 2013, are we requried to allot the EL Balance to the suspended employees only for the worked days during year or including the suspended days?
We will be paying the Bonus for the year 2012 during Feb 2012, when we pay Bonus to the employees, are we required to pay to the Suspended employees only for the Worked days during the year or including the suspended days?
Kindly confirm.
with best regards,

From India, Bangalore
Since the employee has not been found guilty but is only under suspension, it is always advisable to create provisions for all the benefits including salary and allowances. In the books of accounts, it is only provisions and it is always desirable to create provisions in such doubtful cases.

With regard to payment of bonus also you can create provision and pay bonus for the actual days worked. Though the suspension period is to be taken as days worked for the purpose of payment of bonus, the same can be withheld till a decision is taken. During the period of suspension the question of availing of EL will not arise and therefore, you need not credit EL for the days and subsequently when he is exonerated you can grant it later. Any way, the question of encashment of EL shall be taken only when a final decision comes about his discharge, dismissal or exoneration. Therefore, nothing is to be done with all these benefits now but just create a provision for all these benefits and allowances.



From India, Kannur
As told by Madhu T.K please make the provision for all the required Statutory since the enquiry is being delayed by the enquiry team and is not a fault of the suspended employee. If at all the suspended employee is found to be guilty the provisions can always be reversed.
From India, Ahmadabad
Thanks Mr. Madhu for your valuable remarks,
Could you please let us know whether any Limitation of period of enquiry is there, since as per my understanding enquiry limitation is 140 days. Please let us know.
Manager HR

From India, Delhi
No, there is no limitation period for enquiry. The enquiry will take its own time and that is why the Standing Order Act and or the State's Subsistence Allowance Acts have provided for payment of subsistence allowance based on length of suspension. In Kerala Payment of Subsistence Allowance Act, there is a provision to pay 100% wages if the suspension is continued after 180 days of suspension.

From India, Kannur
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