Suspension Pay During COVID-19 Lockdown: Should the Company Increase Wages After 90 Days?

One of the employees in a company has been suspended at the end of January. The employee is being paid a subsistence allowance until the completion of the disciplinary inquiry. He will be paid 50% of the wages for the 90-day period as per the Standing Orders.

The inquiry was in process, but due to the lockdown, it has now been postponed; otherwise, it could have been completed before the 90 days. In the meantime, the 90-day period is expiring during the lockdown. Will the company now be liable to pay him wages at an increased rate (say 75%) or will the lockdown period not be counted as part of his 90-day period for calculating the subsistence allowance to be given under suspension?

Any thoughts?

Dear Mayank,

The suddenly imposed lockdown and its consequent impact on the further continuance of the enquiry proceedings do not in any way alter the employee's status of suspension nor are they attributable to the employee. Therefore, upon crossing the initial limit of 90 days of suspension pending enquiry, the subsistence allowance should be paid at an enhanced rate only.

Dear Colleague,

In my opinion, the EO should go on record to order the postponement of the inquiry due to compelling circumstances not attributable to any party involved. If the inquiry is postponed for such reasons, which are not of anybody's making, the suspension period should be treated as broken and will continue later as part of the ninety days from the date the inquiry is ordered to be resumed. I am only using logic and am aware that it is not backed by legal strength. I am attempting to suggest a new precedent for legal review by the authorities, as such a situation is unlikely to have occurred before.

Regards, Vinayak Nagarkar HR and Employee Relations Consultant

The lockdown is not a deciding factor in determining the enhancement of subsistence allowance. The established norm is that the subsistence allowance is to be increased upon the completion of the initial 90-day period if the delay in completing the disciplinary proceedings is not due to the concerned employee.

Dear Colleague,

Notwithstanding the present legal position, a contention is being raised here for judicial review later to decide the propriety of paying subsistence allowance at an enhanced rate. The moot point is that the inquiry is being forced to be postponed beyond 90 days, and the delay in completing the inquiry is not attributable to the workman during the lockdown period; it is also equally not attributable to the EO/Management. I am raising a question of principle for judicial consideration in these unprecedented circumstances.

Regards,
Vinayak Nagarkar
HR and Employee Relations Consultant

Dear Mayank, The subsistence allowance for the first 90 days is one-half of the emoluments and shall be three-fourths if it exceeds the above period. However, if the inquiry is prolonged beyond 90 days for reasons attributable to the workman, the subsistence allowance shall be reduced to one-fourth of the emoluments.

Inquiry Duration and Management Responsibility

The question is, why could the inquiry not have been completed within the period of 90 days by the management? Whether the delay is due to non-cooperation by the employee or by the management. If the sudden imposition of a lockdown amidst the inquiry period is an unprecedented situation, in view of the present circumstances, emoluments shall be paid three-fourths.

Dear Mr. Vinayak,

Perhaps the point you raised is a valid question of law and, as such, can be subject to judicial review if the employer chooses explicitly not to pay the subsistence allowance at the enhanced rate as long as the lockdown continues, a situation beyond his reasonable expectation or control; that's fine.

Concepts of Suspension and Subsistence Allowance

However, before such a decision, it is imperative to analyze the concepts of suspension and subsistence allowance in the realm of employment as part of disciplinary proceedings, either anticipated or in progress. It is not necessary that every disciplinary proceeding, anticipated or in progress against an employee, would warrant suspension. The seriousness of the alleged misconduct and the possibility of the delinquent meddling with documents or influencing witnesses to his favor are the factors to temporarily keep him out of his official position. Therefore, the employer is the sole judge to decide, and it is a matter of discretion only.

If placed under suspension pending inquiry, the delinquent is deprived of his earnings from the contract of employment, which is kept under animated suspension even though he is bound to submit to the proceedings when required. The objective behind the sanction of a subsistence allowance during the suspension period is to provide financial support. The enhancement of its payment rate, linked to the suspension period's different spells, aims for the expeditious disposal of disciplinary proceedings by the employer to prevent any unfair labor practices under the pretext of suspension. It's not necessary for every disciplinary proceeding and the delinquent's suspension to be concurrent.

Analyzing the Situation Presented by Mr. Mayank-lad

Analyzing the situation presented by Mr. Mayank-lad, in this backdrop, what would require our attention to refute the enhanced rate of the subsistence allowance beyond the first or subsequent spell of suspension is whether the delay is attributable solely to the suspended employee. If the answer is "no," then he is entitled to the enhanced rate of the subsistence allowance as long as he is under suspension pending inquiry. Any difficulties faced by the employer, like an intervening lockdown, cannot be a reasonable ground against the enhancement of the prescribed rate of the subsistence allowance in the service regulations or the contract of employment, as it's a concession to prolonged suspension.

Kindly let me know if you need any further clarification.

Best regards

Dear Mr. Umakanthan, you have well brought out the legal position on the aspect of the propriety and justification for suspending an employee and the consequent payment of subsistence allowance as per the present provisions in the Standing Orders.

In the post of Mayank, the suspension is a given thing, and the applicable rate of payment of subsistence allowance during the lockdown period is the point in question.

As per current legal provisions, as you have rightly stated, under any circumstances and whether lockdown or no lockdown, subsistence allowance at an enhanced rate after 90 days of delay is payable to the suspended employee if it is not due to him. But here, I am raising the very question of principle as to why the enhanced rate should apply when it is not also attributable to the employer.

At least you seem to see some merit in my contention, and thanks for that.

My points are academic and hypothetical, and I am happy it has enabled churning erudite responses and learning.

Regards, Vinayak Nagarkar

HR and Employee Relations Consultant

If an employee is taking a substance allowance and he has resigned before the suspension, is his resignation valid? After resignation, false allegations were imposed, and then suspension occurred on March 31st. The enquiry was conducted on February 26, 2020, and the resignation was submitted on February 17, 2020. Please suggest whether I should pursue legal action for my Full and Final settlement.

Dear Sir,

I will stand by my previous resignation dated 17th Feb as they have not given any reply since I submitted my resignation. After 72 hours had passed, I sent it to them by post. Moreover, they have not provided me with any specific chargesheet for my suspension. Should I prepare to take legal action as they are currently harassing me?

Secondly, sir, I would like to seek your opinion on whether I can accept a new job opportunity. I have not received any substantial allowance, and based on my resignation, am I eligible to join a new company or not?

Thank you.