Subsistence Allowance.....50% - Doc Download

Dear Seniors,

If we add the clause in the Appointment Letter of the Workman that during domestic enquiry proceedings the Subsistence Allowance would be only 50% of (Gross Wages = Basic + DA + HRA + Other Allowances), then irrespective of the duration of the domestic enquiry proceedings, the employer would be liable to pay only 50% Subsistence Allowance. Is there any judgment regarding this?

Thanks in anticipation.

Dear Prashant,

Going by the apex court judgment, payment of subsistence allowance during the pendency of a domestic inquiry is unavoidable. Failure to do so would weaken our defense and could result in a judgment favoring the accused. You may refer to Capt. Paul Antony Vs. Bharat Gold Mines Ltd., settled by the Supreme Court about 10 years ago on this very issue, which is worth taking a cue from. I can post this judgment ASAP.

Kumar.s.

Dear Prashant,

Here are the attachments relevant to the subject of suspension, inquiry, payment of subsistence allowance, etc., and collection of some other comments, remarks, and opinions to enlighten the matter. A HR person who keeps referring to such materials as frequently as possible would become knowledgeable about the most important matters.

Regards,
Kumar S.

If the suspension is extended beyond 90 days, the employee should be given 75% of pay. In some State Acts (like that of the Kerala Payment of Subsistence Allowance Act), if the suspension is extended beyond 180 days, the employee should be paid 100% of the salary. Salary for all purposes shall include basic salary and dearness allowance. At the same time, if the extension of suspension is due to non-cooperation of the suspended employee to appear for an inquiry, the allowance shall be withheld.

Madhu.T.K

There are legal provisions that apply to cases where an employee is suspended pending an inquiry into charges leveled against him/her.

Moreover, why do you want to include such a clause in the appointment letter? It is best avoided. After all, instances of suspension are rather rare, and when they occur, the provisions of the law would automatically apply.

Vasant Nair

Dear member,

First and foremost, I agree with Vasant. Why do you want to include a clause of subsistence allowance in the appointment letter as the cases are very rare when you suspend a workman pending inquiry?

Secondly, the provisions of subsistence allowance are clearly defined, and whatever you put in the appointment letter will not hold good as the provisions you are mentioning are less favorable to the workman than specified in the law.

Regards,

Preetam Deshpande

Prashant,

It is well defined in the ID Act about the quantum of payment towards subsistence allowance when you put someone on "suspension pending inquiry". Whether you mention it in your appointment or not, this will automatically be applied. Mentioning the same in the appointment letter will be redundant and probably signal a negative message to a newcomer.

Focus on conveying positive aspects and the benefits available to the individual upon accepting the offer and the general terms of service in the appointment letter. Other details, such as the one you specified, can be outlined in the Standing Orders, which you can make him read and understand.

V. Balaji

The ID Act is silent on subsistence allowance. It is the Standing Orders Act which makes subsistence allowance mandatory, as Madhu has pointed out. In establishments not covered by the Standing Orders Act, it is advisable to include it as a term of employment.

VARGHESE MATHEW
09961266966

Sorry, it is not the ID Act that defines the quantum of Subsistence Allowance. It is the Standing Orders that do so.

Vasant Nair