Dear Seniors, I am working in the HR Department as an Executive HR. A few days ago, management decided to suspend an employee due to his misbehavior at work. He was suspended for 10 days. Now the question is, what are the responsibilities for the employer? The following questions arise:
1. Payment (if payment then)
2. PF Deduction
3. ESI Deduction
4. TDS Deduction
5. Bonus Benefits
6. Any other responsibilities
Thank you.
From India, Chandigarh
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21. Payment (if payment then)
2. PF Deduction
3. ESI Deduction
4. TDS Deduction
5. Bonus Benefits
6. Any other responsibilities
Thank you.
From India, Chandigarh
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Was the suspension done after the proper inquiry as a punishment? If suspension is part of the punishment, then the employee is not eligible for regular wages. This period is on a no-work, no-pay basis, hence no payment and no deduction for those days.
However, if this is before the inquiry (suspension pending inquiry), you need to pay subsistence allowance as per the Model Standing Orders.
Regards,
From India, Pune
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However, if this is before the inquiry (suspension pending inquiry), you need to pay subsistence allowance as per the Model Standing Orders.
Regards,
From India, Pune
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Suspension and Salary Implications
If suspension is a punishment awarded, then it can be without pay. At the same time, if it is pending enquiry, then the employee is eligible for Subsistence Allowance at the rate of 50% of salary for the first 90 days of suspension. From the Subsistence Allowance, you need not deduct PF since it is not earned by the employee while working. However, once the employee is exonerated, they will be paid full salary, and the days they remained in suspension would become days on duty, and the salary 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.
Outcome of Charges
If charges are not proved, and the employee is taken back, then they 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 the employee is discharged from service, the suspension period will remain as days not worked. Also, the subsistence allowance paid will be adjusted against terminal benefits, and that will not in any way attract a bonus.
Regards,
Madhu.T.K
From India, Kannur
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If suspension is a punishment awarded, then it can be without pay. At the same time, if it is pending enquiry, then the employee is eligible for Subsistence Allowance at the rate of 50% of salary for the first 90 days of suspension. From the Subsistence Allowance, you need not deduct PF since it is not earned by the employee while working. However, once the employee is exonerated, they will be paid full salary, and the days they remained in suspension would become days on duty, and the salary 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.
Outcome of Charges
If charges are not proved, and the employee is taken back, then they 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 the employee is discharged from service, the suspension period will remain as days not worked. Also, the subsistence allowance paid will be adjusted against terminal benefits, and that will not in any way attract a bonus.
Regards,
Madhu.T.K
From India, Kannur
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You have not mentioned the cause of suspension. Suspension should be based on the findings of the enquiry officer who conducts the domestic enquiry. If the suspension is awarded and his charges are proved, then he will not be eligible for anything, and the suspension period should be treated as authorized absence. It does not entitle him to any wages/salary for that period, and statutory deductions do not arise at all. You can prepare his salary sheet by excluding the suspension period on the regular payroll.
Regards,
Adoni Suguresh
Sr. Executive (Pers, Admin, and Ind. Rels) Rtd
Labour Laws Consultant
From India, Bidar
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Regards,
Adoni Suguresh
Sr. Executive (Pers, Admin, and Ind. Rels) Rtd
Labour Laws Consultant
From India, Bidar
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Hi, Thanks for the valuable information, but another query has been raised: if an employee is eligible for Gratuity during the suspension period and his/her guilt is proven, will he/she be eligible for the gratuity benefit or not?
From India, Chandigarh
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From India, Chandigarh
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As my learned friends Madhu and Suguresh explained, suspension is of two types - one is suspension pending enquiry entitling the suspended employee to 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. Any deviation or non-compliance without valid reasons on the part of the employer would render the entire inquiry proceedings vitiated. The other type is punitive suspension for which no subsistence allowance, wages, or salary need to be paid.
Types of Suspension
As the names suggest, suspension pending enquiry occurs before the end of disciplinary proceedings culminating in punishment or exoneration of the charges of misconduct. On the other hand, punitive suspension is the result of the disciplinary proceedings. In the case of suspension pending enquiry, the award of punishment of any other nature (sometimes the period of suspension undergone, or a portion of it, may be converted as punishment) makes it obligatory for the employer to regularize the period of suspension. Failure to do so would tantamount to double punishment. Therefore, suspension pending enquiry will count towards gratuity.
Conversely, the period of punitive suspension would be a non-qualifying period of service for gratuity.
Regards
From India, Salem
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Types of Suspension
As the names suggest, suspension pending enquiry occurs before the end of disciplinary proceedings culminating in punishment or exoneration of the charges of misconduct. On the other hand, punitive suspension is the result of the disciplinary proceedings. In the case of suspension pending enquiry, the award of punishment of any other nature (sometimes the period of suspension undergone, or a portion of it, may be converted as punishment) makes it obligatory for the employer to regularize the period of suspension. Failure to do so would tantamount to double punishment. Therefore, suspension pending enquiry will count towards gratuity.
Conversely, the period of punitive suspension would be a non-qualifying period of service for gratuity.
Regards
From India, Salem
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I would just like to draw your kind attention to the fact that suspension as a form of punishment according to the IE(SO) Act should not exceed 4 days. Apparently, this has not been stated by anyone here. More days of suspension can be provided in a certified SO. I recall someone mentioning that you can provide suspension for up to 10 days. Can somebody shed light on this?
From India, Mumbai
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From India, Mumbai
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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)
From India, Salem
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From India, Salem
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Thank you very much for your spontaneous response. This forum always receives informative and valuable inputs from you. Central rules, Maharashtra rules, and many other states have a provision for suspension of not more than 4 days. This is just for information. Thanks again.
Regards
From India, Mumbai
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Regards
From India, Mumbai
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Dear Rashmita, since you are from the HR department, I will refrain from elaborating on the contract of employment between the employer and the employees. During a suspension, whether it is pending an inquiry or punitive, the contract of employment continues but in a state of suspended animation. In other words, suspension is a temporary barring of the employee from attending their duties as specified in the employment contract. The employee should not seek employment with another employer nor engage in any other gainful employment during the entire period of suspension. If instructed by the employer, the employee should not leave the headquarters without prior permission.
Therefore, during the suspension period, the employee does not need to report to their workplace.
From India, Salem
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Therefore, during the suspension period, the employee does not need to report to their workplace.
From India, Salem
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