During Suspension Period Employer's Liability For Statutory

Dear Seniors,
I am working in the HR Deptt. as a Executive HR. A few day ago management had decided to suspend an Employee due to his misbehaviour at work. He was suspended for the 10 days. Now question is that, what are responsibilities for the Employer. The following questions arises:
1. Payment ( if Payment then)
2. PF Deduction.
3. ESI Deduction.
4. TDS deduction.
5 Bonus benifits.
6. Other if any.

Hi,
Was the suspension was done after the proper enquiry as a punishment? If suspension is as a part of punishment, then employee is not eligible for regular wages. This period is no work no pay basis and hence no payment and no deduction for those days...
However if this is before enquiry (suspension pending enquiry), you need to pay subsistence allowance as per the Model Standing Orders...
Regards,

allowances will be include in the salary sheet or not. if include then another query is pending, statutory deduction and employer liabilities will be due. as mention in the Sr. No 2 to 6.

If suspension is a punishment awarded then it can be without pay. At the same time, if it is pending enquiry then he is eligible for Subsistence Allowance at the rate of 50% of salary for the first 90 days of suspension. From Subsistence allowance you need not deduct PF since it is not earned by him while working but once he is exonerated he will be paid full salary and the days he remained in suspension would become days on duty and the salary so paid for those days will attract PF. However, ESI has taken a different interpretation and on subsistence allowance ESI should be deducted. Similarly, you can also deduct income tax from it.

If charges are not proved and the employee is taken back, then he will become eligible to get salary and that salary will be counted for bonus calculation and the suspension days will automatically become days worked. On the other hand, if charges are proved and he is discharged from service, the suspension period will remain as days not worked and also the subsistence allowance paid will be adjusted against terminal benefits and that will not any way attract bonus.

Madhu.T.K

Dear Mr.S.Singh,
You have not mentioned the cause of suspension. Suspension should be based on the findings of the enquiry officer who conduct the domestic enquiry. If the suspension is awarded and his charges are proved and then he will not be eligible for anything and the suspension period should be treated as authorized absence and does not entitled for any wages/salary for that period and statutory deductions does not arise at all. You can prepare his salary sheet by excluding the suspension period on regular pay roll.
Adoni Suguresh
Sr.Executive (Pers, Admin and Ind.Rels) Rtd
Labour Laws Consultant

Hi
Thanks for the valuable information but there is another query has raised that if an employee is being eligible for the Gratuity during the Suspension period and his / her guilty proved then will he be eligible for the gratuity benefit or not.

Dear seniors'
please let me know the process to do enquiry in same cases.
kindly suggest.

Dear Surjeet,

As my learned friends Madhu and Suguresh explained, suspension is of two types - one is suspension pending enquiry entitling the suspended employee for subsistence allowance for the entire period of suspension at the rates fixed in the Standing Orders or under any special Law in force for the purpose and any deviation or non-compliance without valid reasons on the part of the employer would render the entire enquiry proceedings vitiated and the other is punitive suspension for which no subsistence allowance nor wages or salary need be paid. As the very names suggest, suspension pending enquiry is before the end of disciplinery proceedings culminating in punishment or exoneration of the charges of misconduct and punitive suspension is the result of the disciplinery proceedings. In the case of suspension pending enquiry, the award of punishment of any other nature ( at times the period of suspension undergone or a portion of which may be converted as punishment) makes it obligatory on the part of the employer to regularize the period of suspension failing which it would tantamount to double punishment. Automatically, therefore, suspension pending enquiry will count for gratuity. Whereas, the period of punitive suspension would be a non-qualifying period of service for gratuity.

Dear All,
I would just like to draw your kind attention that the suspension by way of punishment according to IE(SO) Act is not more than 4 days. Apperently this is not stated by anyone here.
More days suspension can be provided in certified SO. I recollect some one telling me that you can provide the suspension up to 10 days. Can some body through light on it?

The Tamilnadu Industrial Employment ( Standing Orders ) Rules,1947 provides for a maximum of 30 days punitive suspension - Schedule I- Model Standing Orders applicable to workmen- Cl17(3)