Labour Law & Hr Consultant
Korgaonkar K A

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Whether Dearness Allowance should be increased in the subsistence allowance of a Suspended employee whenever the D.A. is hiked by Government of India i.e. 1st January and 1st July of every year.
From India, Mumbai
Considering the intent and purpose of subsistence allowance granted to an employee placed under suspension, I am of the opinion that D.A need not be paid at the enhanced rate after his suspension for the reason that subsistence allowance is calculated and paid only on the basis ofhis last-drawn wages/salary prior to the date of his suspension.
From India, Salem
Dear Umakanthan ji,

Nice to see you back.

I fully endorse your view. There is no ambiguity in Section 10A of Industrial Employment (Standing Orders) Act, 1946. This Section clearly states that the subsistence allowance is payable on wages which the workman was entitled to immediately preceding the date of such suspension.

However, I would like to draw your kind attention to Clause 4(b) under the Standing Orders under Industrial Employment (Standing Orders) Central Rules, 1946 as applicable to Industrial Establishments in coal mines. This Clause says that the subsistence allowance is payable on wages to which the workmen would have been entitled if he were on leave with wages.

I would also like to draw your kind attention to the Judgement of SC in UOI vs RK Chopra in Civil Appeal No.1096 of 2010 (SLP (CIVIL) No.9071 of 2009). Respondent in this case is a Government Servant. SC said in this Judgement that the Central Administrative Tribunal (Principal Bench), New Delhi as well as the Delhi High Court have committed an error in holding that the respondent is entitled to the benefit of Revised Pay based on the 5th Pay Commission.

From India, Mumbai
Dear Yusuf114 & Umakanthan ji, The aforesaid Judgement is attached herewith for the benefits you as well the readers .................................................................................
From India, Mumbai

Attached Files
File Type: pdf Union Of India vs R.K Chopra.pdf (227.7 KB, 127 views)

Thank you so much Mr.Korgaonkar for your apt explanation and attachments which are highly enlightening on the subject-matter. The concept of " suspension" in disciplinary context in the realm of employment presupposes the probability of wanton influence to his favour by the delinquent employee on others connected with the disciplinary proceeding by virtue of his unhindered continuation in the job and hence invoked as a measure of temporary debarment of the delinquent from his normal duties with the twin purpose of keeping his employment intact and simultaneous and expeditious disposal of the D.P initiated. Since the basic purpose of employment is earning one's means of livelihood and the basic tenet of disciplinary action is the grant of reasonable opportunity to the accused, the delinquent should be compensated the loss of earnings during the entire period of his suspension to some extent, of course, subject to some reasonable restrictions. Thus emerged the concept of " subsistence allowance" based on the normal earnings of the delinquent immediately precedent to his date of suspension. This arrangement acts as a catalistic deterrent on both the delinquent under suspension and the employer for the former loses his normal earnings and the latter pays without work. Here normal earning or wages or salary refers only to such of the basic components of earnings due to the job excluding the special allowances peculiar to its performance. Since during the leave of absence no work is performed, the leave with wages imply the normal wages minus the special allowances for performing the job. Hence such a specific clause in the Mines' Standing Orders I suppose. Coming to the other point high-lighted in the judgment regarding the notional calculation of the last-drawn normal wages in the event of hike after suspension, as I understand, its effective date as well as the fate of the disciplinary proceeding are the determinent factors. During the course of suspension, if the hike announced after the date of suspension has retrospective effect, the suspended employee stands to stake his claim for enhanced subsistence allowance at the revised rate. But, if it is only prospective , the employee's entitlement to revised scale of pay is consequent on the final outcome of the disciplinary proceeding i.e it should be total exonoration or some punishment other than dismissal. Therefore, the ratio decidendi of the judgment cited is that a dismissed employee can not stake his claim for enhanced subsistence allowance just because there happens an upward revision in the scale of his pay with prospective effect during the period of his suspension.
From India, Salem
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