CHANAKYA NATIONAL LAW UNIVERSITY

PAYMENT OF SUBSISTENCE ALLOWANCE

UNDER STANDING ORDER ACT,1946
SUBMITTED BY:MD SHAIQUE
ROLL NO:559
5TH SEMESTER
SUBMITTED TO:DR.S.C RAO.

ACKNOWLEDGEMENT
The

present

project

on

the

topic

PAYMENT

OF

SUBSISTENCE

ALLOWANCE UNDER STANDING ORDER ACT,1946 has been able to get

its final shape with the support and help of people from various quarters.
My sincere thanks go to all the members without whom the study could
not have come to its present state. I am proud to acknowledge gratitude
to the individuals during my study and without whom the study
may not

be completed. I have taken this opportunity to thank those

who genuinely helped me. In the completion of this project many

people helped us directly and indirectly. First of all we would like to
thank my university i.e. CHANAKYA NATIONAL LAW UNIVERSITY, PATNA,
who gave us the idea and encouragement to venture into this project.
I am grateful to our faculty of Labour Law,Dr.S.C.ROY. who gave us the
opportunity

to

make

project

on

PAYMENT

OF

SUBSISTENCE

ALLOWANCE UNDER STANDING ORDER ACT,1946.

Any sort of addition, alteration and criticism regarding our work is most
welcome.
I have made every effort to acknowledge credits, but I apologies in
advance for any omission that may have inadvertently taken place.
Last but not least I would like to thank Almighty whose blessing helped
me to complete the project.
MD.SHAIQUE
559
5THSEMESTER

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RESEARCH METHODOLOGY
AIMS & OBJECTIVES:
The aim of the project is to present a detailed study of PAYMENT OF
SUBSISTENCE

ALLOWANCE

UNDER

STANDING

ORDER

ACT,1946

through decisions and suggestions and different writings, articles &

reports.

SOURCES OF DATA:
The following secondary sources of data have been used in the projectArticles
Books
Websites

METHOD OF WRITING:
The method of writing followed in the course of this research paper is
primarily analytical.

MODE OF CITATION:
The researcher has followed a uniform mode of citation throughout the
course of this research paper.

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INDEX
1. Introduction...04
2. Object of Standing Order Act..05
3. Scope and application06
4. Important definitions & procedure....07-12
5. Subsistence allowance under Standing Order Act,1946..13-15
6. Judicial notion.16-17
a)Denial of subsistence allowance legal : HC16
b)Supreme court directive of subsistence allowance to suspended employee.17
7. Subsistence allowance under Corporate Law......18-20
8. Conclusion..21
9. Bibliography22

INTRODUCTION

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The absence of standing orders in establishment very often led to friction between the
management and workers in industrial undertakings in our country. Before passing of this
Act the conditions of the employment were governed by contracts either express or
implied between the employers and their employees in different industrial undertakings.
In many cases these conditions were not well defined and suffered from doubt and
ambiguity.
With the advent of trade unionism and collective bargaining new problems of maintaining
industrial peace and production for the society were created. It was then considered that
the society had a vital interest in the settlement of terms of employment of industrial
labour and thus the settlement of labour problems became tripartite and the state,
representing the society entered on the scene1.
The importance of making a law defining precisely the conditions of employment was
emphasized during discussions in the tripartite labour conferences. To give effect to the
new ideology the industrial employment (standing orders)Act,1946 was enacted by the
central government. It is obligatory upon all the employers covered by this Act to define
conditions of employment under them. The conditions of employment must also be made
known to workmen employed by such employers.
The preamble of the Act makes it amply clear that the standing order shall deal with the
condition of the employment of the workers in the industrial establishment. These
words are wide enough to include acts which may be commited even out of the factory
premises2.The object of the act is to regulate the conditions of recruitment, discharge
disciplinary action, holidays etc., of the workers employed in industrial undertakings.

1 Western india match co. v.workmen,A.I.R. 1973 S.C. 2650.

2 Shahadara s. light railway co. v. s.s. railway workers union, A.I.R. 1969 S.C. 513.
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OBJECT OF STANDING ORDER ACT

The object of the Act is to "require the employers in industrial establishment to
define with sufficient precision the conditions of employment under them and to
make the said conditions known to the workmen employed under them.
The aims of the Act are as follows :
To define precisely the terms and conditions of employment and to communicate
them to the workmen in the industrial establishments.
To bring about uniformity in the terms and conditions of employment in all industrial
establishments to which the Act applies.
To regulate the standards of conduct of employers and to establish a basis for
harmonious labour management relations.
To ensure satisfactory employment conditions and to maintain proper disciplinenecess
ary for high productivity.
To specify the duties and responsibilities of both the employer and the employees
To provide redressal of grievances arising out of employment or unfair treatment by
the employer.
To provide statutory sanctity and significance to the standing orders.

SCOPE AND APPLICATION

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The Act extends to the whole of India. It applies to every industrial establishment wherein
100 or more workmen are employed on any day of the preceding 12 months. The appropriate
Government may also, after giving not less than 2months notice of its intention to do so, by
notification in the Official Gazette, apply the provisions of the Act on any industrial
establishment

employing

less

than

100

persons.

The appropriate government can also exempt conditionally or unconditionally anyindustrial

establishment from all or any of the provisions of the Act Once the Act becomes applicable to
an industrial establishment it does not cease to apply due to fall in the number of workmen in
that establishment below 1003.
The Act does not apply to4 :
(1)Any industry to which the provisions of Chapter VII of the Bombay Industrial Relations
Act 1946 apply; or
(2)Any industrial establishment to which the provisions of Madhya Pradesh Industrial
Employment (Standing Orders) Act 1961 apply.
(3)Any industrial establishment in so far as the workmen employed therein are persons to
whom the following rules apply :
(a)The Fundamental and Supplementary Rule.
(b)The Civil Services(Classification, Control and Appeal) Rules
(c)The Civil Services (Temporary Services) Rules
(d)The Revised Leave Rules.
(e)The Civil Services Regulations.
(f)The Civilians in Defence Service (Classification, Control and Appeal)Rules
(g)The Indian Railway Establishment Code .
(h)Any other rules and / or regulations that may be notified in this behalf bythe
appropriate Government in the Official Gazette.

IMPORTANT DEFINITIONS
3 http://www.citehr.com/43628-payment-subsistence-allowance.html
4 Ibid.
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Appellate Authority
[Sec 2(a)] It means any authority appointed by the appropriate Government by notification in
the official Gazette to exercise in such areas as may be notified in the function of an appellate
authority under this Act. But in relation to an appeal pending before an industrial court or
other

authority

immediately

before

the

commencement

of

the

Industrial

Employment(Standing Orders) Amendment Act 1965,the Court or authority shall be

deemed to be the appellate authority.
Appropriate Government
[Sec 2(b)] It means in respect of industrial establishments under the control of the Central
Government and a Railway Administration or in Major port, mine or oil field, the Central
Government. In all other cases it means the State Government. Where any question as
to whether any establishment is under the control of
the Central Government, that Government may after giving the parties an opportunity
of being heard, decide the question and such decision shall be final and binding on
all parties.
Certifying Officer
[Sec 2] It means a Labour Commissioner or a Regional Labour Commissioner and includes
any other officer appointed by the appropriate Government, by notification in the Official
Gazette, to perform all or any of the functions of a certifying officer under the Act.
Employer
[Sec 2 (d)] It means the owner of an industrial establishment to which the Act for the time
being applies and includes :(i)in a factory any person named under Sec 7(1) of the
Factories Act 1948, as manager of the factory;(ii) in any industrial establishment under
the control of any department of any department of the Government of India, the authority
appointed by such government on this behalf, or where no authority is so appointed the head
of the department(iii) in any other industrial establishment, any person responsible to the
owner for the supervision and control of the industrial establishment.
Industrial Establishment

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[Sec 2(e)] It means : (j)an industrial establishment as defined in Sec 2(ii) of the
Payment of WageAct 1936.(ii) a factory as defined in Sec 2 (m) of the Factories Act
1948(iii) a railway as defined in Sec 2(4) of the Indian Railways Act 1890.(iv) establishment
of a person who, for the purpose of fulfilling a contract with the owner of any industrial
establishment employs workmen.
Standing Orders
The Central Government, that Government may after giving the parties an opportunity
of being heard, decide the question and such decision shall be final and binding on
all parties.
Certifying Officer
[Sec 2] It means a Labour Commissioner or a Regional Labour Commissioner and includes
any other officer appointed by the appropriate Government, by notification in the Official
Gazette, to perform all or any of the functions of a certifying officer under the Act.
Employer
[Sec 2 (d)] It means the owner of an industrial establishment to which the Act for the time
being applies and includes :(i)in a factory any person named under Sec 7(1) of the
Factories Act 1948, as manager of the factory;(ii) in any industrial establishment under
the control of any department of any department of the Government of India, the authority
appointed by such government on this behalf, or where no authority is so appointed the head
of the department(iii) in any other industrial establishment, any person responsible to the
owner for the supervision and control of the industrial establishment.
Industrial Establishment
[Sec 2(e)] It means : (j)an industrial establishment as defined in Sec 2(ii) of the
Payment of Wage Act 1936.(ii) a factory as defined in Sec 2 (m) of the Factories Act
1948(iii) a railway as defined in Sec 2(4) of the Indian Railways Act 1890.(iv) establishment
of a person who, for the purpose of fulfilling a contract with the owner of any industrial
establishment employs workmen.

Standing Orders
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[Sec 2 (g)] These imply rules relating to matters set in the Schedule to the Act.
THE SCHEDULE
[Secs 2 (g) and 3 (2)]
Maters to be Provided in Standing Orders
1.Classification of workmen, e.g., whether permanent, temporary, apprentices, probationers
or badlis.
2.Manner of intimating to workmen periods and hours of work, holidays, pay-days Wage
rules
.3.Shift working.
4.Attendance and late coming.
5.Conditions of procedure in applying for, and authority which may grant leave or holidays.
6.Requirement to enter premises by certain gates and liability to search.
7.Closing and reopening of sections of industrial establishment, temporary stoppages of work
and rights and liabilities of the employer and the workman arising there from.
8.Termination of employment, and the notice thereof to be given by employer and workmen.
9.Suspension and dismissal for misconduct and acts or omissions which contribute to
misconduct
10.Means of redress of workmen against unfair treatment or wrongful extractions by the
employer or his agents or servants.
11.Any other matter which may be prescribed.

Workmen
[Sec 2(i)] Workmen means any person (including any apprentice) employed in any
industrial employment to any skilled, or unskilled, manual, supervisory, technical or clerical
work for hire or reward, whether the terms of employment be express or implied, but does not
include any such person :
(i)Who is subject to Army Act, 1950 or Air Force Act 1950, or the Navy Act 1957
(ii) Who is employed in the police service or as an officer or other employee of a person
(iii)Who is employed mainly in a managerial or administrative capacity
(iv)Who being employed in a supervisory capacity draws wages exceeding Rs 3000 per men.

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(v)Who exercises, either either by the nature of the duties attached to the office or by reason
of power invested in him, functions mainly of a managerial nature.
Procedure for Submission of Draft Standing Orders
(Sec 3)(1) With six months of the application of this Act to an industrial establishment the
employer shall submit to the certifying officer 5 copies of the draft standing orders proposed
by him for adoption in his industrial establishment.
(2)Such draft standing order shall cover every matter set out in the Schedule to the Act which
may be applicable to the industrial establishment.
(3)Where model standing orders have been prescribed, the draft standing order shall be so far
as practicable, in conformity with such model.
(4)The draft standing orders submitted shall be accompanied by a statement giving prescribed
particulars of the workmen employed in the industrial employment. They shall also give the
nature of the trade union if any, to which the workmen belong.
(5)Subject to such conditions as may be prescribed, a group of employers in a similar
industrial establishment may submit a joint draft of standing orders5.

Matters to be provided in Standing Orders

(The Schedule) : The Schedule to the Act specifies the following matters to be provided in the
Standing orders6 :
Classification of workmen eg whether permanent, temporary, apprentices, probationers,

or

Badlis.
Manner of intimating workmen periods and hours of work, holidays, paydays, and wage
rates.
Shift working
Attendance and late coming,
Conditions of, procedure in applying for, and the authority which may grant leave and
holidays.
Requirement to enter premises by certain gates and liability to search.
5 http://www.citehr.com/195531-applicable-deduction-subsistence-allowance.html
6 Ibid.
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Closing and reopening of sections of the industrial establishment, temporary stoppages of

work, and the rights and liabilities of the employer and workmen arising there from.
Termination of employment and notice thereof to be given by employer to workmen.
Suspension and Dismissal for misconduct and acts and omissions which constitute
misconduct.
Means of redress for workmen against unfair treatment or wrongful exaction by the employer
or his agents or servants.
Any other matter which may be prescribed. There is no bar to the Standing Orders making
provisions for other matters. Once such provisions are made they are liable to be modified
on the motion of either the employer or the workmen under Sec 10(2) of this Act.

Conditions for Certification of Standing Orders

[Sec4]Standing

Orders

are

to

be

certified

under

this

Act

if

(a)provision is made therein for every matter set outin the schedule which is applicable for
industrial establishment
(b)The Standing Orders are otherwise in conformity with the provisions of this Act. It is the
function of the certifying officer or appellate authority to adjucate upon the
reasonableness or fairness of the provisions of any standing orders. However their Judgement
must not be arbitrary or perverse or inconsistent with the provisions of the Act. If no
provision is made for anything set out in the schedule the certifying officer can add to
the draft standing orders. He can amend the draft standing orders where the language used
does not define with sufficient precision the conditions of employment7.
Procedure for Certification of Standing Orders
[Sec 5]The procedure for certification of standing orders is as follows :
(1)On receipt of the draft standing orders, the certifying officer forwards a copy thereof to the
trade union, or where there is no trade union to the workmen in a prescribed manner.
(2)He also sends with the copy of the draft a notice in the prescribed form requiring
objections if any, which the workmen may desire to make to the draft standing orders.

7 The aluminium Industries employees union v. Aluminium Industries Ltd., A.I.R. 1963
Orissa 169.
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(3)The objections are to be submitted to him within 15 days from date of the receipt of the
notice.
(4)He is required to give opportunity to the employer or the trade union or such
other representatives or the workmen as may be prescribed of being heard if any
modifications or addition to the standing order is to be made8.
(5)After the certifying officer then decides whether or not any modification of or addition to
the draft submitted by the employer is necessary to render the draft standing orders
certifiable under this Act and then makes orders in writing accordingly9.
(6)The Certifying officer then certifies the draft standing orders with themodifications if any.
He then within 7 days sends copies of the certified standing
orders and of his order to the employer, to the trade union or other prescribed representatives
of workmen.
(7)The standing orders after their due certification then applies to all workmen employed in
an industrial establishment before or after such certification10.

8 Salem Erode Electricity Distribution Company(Pvt.) v. Employeesunion, A.I.R. 1966 S.C. 808.

9 http://www.citehr.com/216325-subsistence-allowance.html
10 Ibid.
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SUBSISTENCE ALLOWANCE UNDER STANDING ORDER ACT,1946.

(10-A) Payment of subsistence allowance.
(1) Where any workman is suspended by the employer pending investigation or inquiry into
complaints or charges of misconduct against him, the employer shall pay to such workman
subsistence allowance.
At the rate of fifty percent of the wages which the workman was entitled to immediately
preceding the date of such suspension, for the first ninety days of suspension ; and
At the rate of seventy-five per cent. of such wages for the remaining period of suspension if
the delay in the completion of disciplinary proceedings against such workman is not directly
attributable to the conduct of such workman.

(2) If any dispute arises regarding the subsistence allowance payable to a workman under
subsection (1), the workman or the employer concerned may refer the dispute to the Labour
Court constituted under the Industrial Disputes Act, 1947 (14 of 1947) within the local limits
of whose jurisdiction the industrial establishment wherein such workman is employed is
situate and the Labour Court to which the dispute is so referred shall, after giving the parties
an opportunity of being heard, decide the dispute and such decision shall be final and binding
on the parties.

(3) Notwithstanding anything contained in the foregoing provisions of this section, where
provisions relating to payment of subsistence allowance under any other law for the time
being in force in any State are more beneficial than the provisions of this section, the

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provisions of such other law shall be applicable to the payment of subsistence allowance in
that State11.

In Kalyanpur Keshav Venkatarai Pai v. Corporation Bank12, the petitioner was manager of
corporation bank, kalbadevi branch ,Bombay. The petitioner claimed subsistence allowance
based on Bombay shops and establishments act,1948 and the standing orders act,1946. The
standing orders Act and rules were mutatis mutandis made applicable for the purpose of
subsistence allowance to the employees of the establishments governed by the shops act.
It was held that the standing orders act and rules framed there under.
Employees who are not workman as above will not be covered by section 38-B of the
Bombay shops and establishments act,1948. By applying the rule of harmonious construction,
it is clear that legislature could not have intended to confer on managerial employees the
benefits if benevolent provisions meant primarily to protect workman. Since manager of a
bank is not a workman he can not claim subsistence allowance.
In R. Govendaraj and others v. Govt. Tool Room and Training Centre13, the petitioner who
were employees of the respondent were suspended for certain charges pending domestic
inquiry. In the petitioners were found guilty of the charges for which punishment by way of
reduction was imposed and they were reinstalled in service. The employer order for recovery
of subsistence allowance paid to them. This order was challenged in this petition.
The concerned establishment provides that the employees found guilty shall be absent from
duty for the suspension period and shall not be entitled to any remuneration.
The Karnataka high court held that the rule meant that where an employee is exonerated he
will be entitled for full salary and allowances which he would have drawn had he not been
placed under suspension. The rule does not say that subsistence allowance paid the
constitution. The standing order can not be interpreted in such a manner as to come in conflict
with the provisions of the constitution. Further such construction would be violative of sction
10-A of the Act.
11 http://www.vakilno1.com/bareacts/industrialemploymentact/s10a.htm
12 (2002) III L.L.J. 122 (Cal.).
13 (1988) I L.L.J. 244 (Bombay).
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It was held in Transport Manager v. Vilas sanu deokar and others 14, that if an employer does
not provide work to a badli workman by issuing no duty order, it would not amount to
suspension from work. A person can be suspended from provided there is a vested right in the
workman to secure work from the employer everyday while the contract of employment
subsists. However,in the case of a badli workman, the contract of employment comes into
effect only on the day he is given employment, and therefore, the question of suspension
from work on account of a no duty order does not arise. A badli workman is one who
perform his duty as and when work is made available to him by the employer. If there can be
suspension from work of a badli workman, the question of being entitled to subsistence
allowance during the period he is not allotted work does not arise.
A subsistence allowance is intended to cover the expenses incurred by an interpreter working
away from his/her professional address. It may consist of a flat-rate amount paid per day or
may involve an arrangement whereby the conference organiser pays all or part of the
interpreter's accommodation and board. In the agreement sector, these allowances are
governed by the relevant agreement. In the private market sector, they are negotiated between
the interpreter and the client. Workman who is placed under suspension shall during the
period of such suspension be paid a subsistence allowance at the following rates namely 15.
For the first ninety days of the suspension period subsistence allowance to be paid per month
shall be equal to one-half of basic wages, dearness allowance and other compensatory
allowances. If the enquiry gets prolonged and the workman continues to be under suspension
for a period exceeding ninety days, the subsistence allowance to be paid per month for a
further period of ninety days shall be equal to three fourths of such basic wages, dearness
allowance and other compensatory allowances.
If the enquiry is not completed within a period for 180 days, the workman shall be paid
basic wages, dearness allowance and compensatory allowance in full as subsistence
allowance to be paid per month until such time as the inquiry is finally concluded. Provided
that, where the findings of the Inquiry Officer show that such enquiry is prolonged beyond a
period of 90 days, or as the case may be 180 days for reasons directly attributable to the
workman, subsistence allowance to be paid per months shall for the period exceeding 90 days
14 (1990) I l.l.j. 140 (Karn.).
15 http://www.citehr.com/195531-applicable-deduction-subsistence-allowance.html
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or as the case may be 180 days, shall be reduced to one half of such basic wages, dearness
allowance and other compensatory allowance. The age for retirement or superannuation of
the workman may be sixty years or such other age as may be agreed upon between the
employer and the workman by any agreement, settlement or award which may be binding on
the employer and the workmen under any law for the time being in force16.

JUDICIAL NOTION
DENIAL OF SUBSISTENCE ALLOWANCE LEGAL : HC
Allahabad: A division bench allahabad high court has ruled that denial of payment of
subsistence allowance to a suspended employee if he fails to submit a certificate, under subrule (1) and (2) of rule 53 of the up fundamental and subsidiary rules that he is not engaged in
any other employment, business, profession or vocation, is legal. chief justice s k sen and
justice r k agrawal in a judgment has ruled that non-submission of the certificate by the
appellant is his own folly and he cannot take advantage of it. the special appeal bench, has
turned down the plea of the appellant that his dismissal from service is illegal and should to
be quashed on the ground that he could not participate in the department proceedings, due to
non-payment of subsistence allowance, during his suspension period. the bench, dismissed
the appellants appeal, filed against the order of the single judge, on the ground that the
appellant had failed to submit certificate required for getting subsistence allowance and he
had not pleaded either before the departmental authorities or in the petition that due to nonpayment of subsistence allowance, he could not participate in the proceedings and
consequently he was terminated from service without following the principles of natural
justice. the brief fact of the case was that the appellant s d gupta was working as a clerk in
nagar palika bindki in fatehpur. he was suspended on may 19, 1988, during departmental
proceeding. the charges against the appellants were of indiscipline and irregularities causing
16 C.M. Ptel v. State, A.I.R. 1971 Bom. 244.
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financial loss to the municipal board. ultimately he was terminated on november 8 after
completing the departmental proceedings. the petitioner had challenged the order of his
termination before a single judge of the high court, which was dismissed. the appellant
thereafter challenged the order of single judge in a special appeal. the bench upheld the order
of the single judge and dismissed the appeal17.

SUPREME COURT DIRECTIVE OF SUBSISTENCE ALLOWANCE TO

SUSPENDED EMLOYEES
New Delhi: The Supreme Court has ruled that a government employee under suspension is
not entitled to subsistence allowance on the basis of a revised pay scale if the disciplinary
action against him or her has been taken before the revision. A bench of Justices R V
Raveendran and K S Radhakrishnan in a judgement said the suspended employee is entitled
to subsistence allowance on the basis of a revised pay scale if the suspension had taken after
the revision.
Interpreting rule Note 3 to Rule 7 of the Revised Pay Rules and FR 53(1)(ii)(a) and Office
Memorandum dated 27th August, 1958 of the Union of India, the apex court said the rule is
clear that if the revision of pay takes effect from a date prior to the date of suspension of a
government servant then he/she would be entitled to benefit of increment in pay and in the
subsistence allowance for the period of suspension.
"But if the revision of scale of pay takes effect from a date falling within the period of
suspension then the benefit of revision of pay and the subsistence allowances will accrue to
him only after reinstatement depending on the fact whether the period of suspension is treated
as duty or not," Justice Radhakrishnan writing the judgement said.

17 http://www.lawyersclubindia.com/experts/Subsistence-allowance-281166.asp
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The apex court passed the judgement while upholding an appeal filed by the Centre
challenging the directions passed by the Central Administrative Tribunal and the Delhi High
Court to pay subsistence allowance to R K Chopa, a suspended employee of the Ministry of
Commerce and Industries18.

SUBSISTENCE ALLOWANCE UNDER CORPORATE LAW

The Industrial Disputes Act, 1947 [IDA], provides for an elaborate system of adjudication
of disputes between employers and workmen, and litigation over subsistence allowance is
by no means uncommon, not only for tactical reasons, but also because it is often the only
means of survival for an employee facing disciplinary proceedings. In this context, a single
judge of the Bombay High Court has advanced an interesting proposition of law, in a careful
judgment delivered a few weeks ago in Mumbai Cricket Association v Shinde19.
Mr. Shinde had been employed as a typist by the MCA, and was chargesheeted under the
Model Standing Orders for accepting an illegal gratification. Following an inquiry, the
charges were found proved, and he was dismissed on 25 November, 2002. Mr. Shinde sought
and obtained a reference from the appropriate Government, and challenged his dismissal
before the Labour Court. As is well known, the dispute resolution mechanism in s. 10 of the
18http://zeenews.india.com/news/nation/sc-directive-on-subsistence-allowance-to-suspendedstaff_601301.html
19 http://indiacorplaw.blogspot.in/2011/02/subsistence-allowance-during.html
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IDA is activated only upon a reference by the appropriate Government. The Labour Court
found that the inquiry was perverse but gave the employer an opportunity to prove the
charges in court by adducing evidence. Again, this practice is widely followed in industrial
adjudication to avoid unnecessary delay in remitting the case back for an inquiry, following
which there is inevitably another reference to the Court on the same facts. At this stage, Mr.
Shinde sought an order for subsistence allowance in accordance with s. 10A of the
Industrial Employment (Standing Orders) Act 1946 [IESO], which provides that an
employer is obliged to pay the employee a specified percentage of his wages during his
suspension and pending the result of the inquiry20.
The obvious difficulty Mr. Shinde faced was that the order of the Labour Court permitting the
employer to prove the charges was technically not an inquiry and he could not be said have
been suspended, since the order of dismissal had not formally been set aside. Nevertheless,
the Labour Court took the view that this was akin to an inquiry, that equity demanded the
payment of subsistence allowance and so ordered. The question of law before the single judge
was whether this is a correct construction of the IDA and the IESA.
It is convenient to begin by setting out the operative part of s. 10A IESA:
10-A. Payment of subsistence allowance.-(1) Where any workman is suspended by the
employer pending investigation or inquiry into complaints or charges of misconduct
against him, the employer shall pay to such workman subsistence allowance
Dharmadhikari J., for two reasons, held that this provision is irrelevant in circumstances
where the Labour court directs the employer to prove the charges of a perverse inquiry in
court. First, there is authority for the proposition that the order of dismissal is not set aside by
the direction of the Labour court to adduce fresh evidence indeed, if the Labour court
affirms the dismissal on appreciating evidence, the order relates back to the date of
dismissal. If this is true, it must inevitably follow that s. 10A is unavailable, because the
workman cannot on any view be suspended when his dismissal order is effective, albeit
in abeyance. To support this proposition, Dharmadhikari J. turned to the decision
in Engineering Laghu v Labour Court21, where the Supreme Court had held that the dismissal
20 Ibid.
21 A.I.R. 2004 S.C. 4951.
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order remains valid until it is set aside and therefore, if confirmed, must be given effect not
from the date of the judgment, but from the date of the passing of the dismissal order. It was
argued in that case that there is a distinction at any rate between cases where an employee is
dismissed without an inquiry, and those where dismissal follows an inquiry that is found to be
defective. The contention was that the dismissal is void in the first case, and therefore takes
effect only from the date of judgment. Krishna Iyer J. had accepted this view but was
overruled in Engineering Laghu, because of settled authority that the doctrine of relating back
applies in both cases. Dharmadhikari J. therefore rightly observed that:
The order of dismissal remains and is not set aside. If upheld by the Court, it will
be after the order of the Court in that behalf. However, it relates back to the date
of punishment. If what is postponed is its coming into effect or operation, then,
the argument of Mr. Pathak that it is held in abeyance must be straightway
rejected. His argument would render doctrine of relation back completely
nugatory.
The second reason is as compelling even on the assumption that the employee may be said
to be suspended for the purposes of s. 10A, it must still be established that he is suspended
pending investigation or inquiry into complaints or charges of misconduct The fact that
the Labour Court, when no inquiry has been conducted, is entitled to hear all the evidence
and make findings of fact and law, cannot elide an inquiry or investigation and
an adjudication. As Dharmadhikari J. noted,
The employee sought a reference from the Appropriate Government and that is
how the matter of his dismissal is referred to the Labour Court and that is how the
Court is seized of the matter. The Court cannot be equated with an employer as it
is only performing a judicial function of giving an opportunity to the petitioner to
adduce evidence to prove charges of misconduct before it, and that is because the
law postulates such an opportunity. The law does not equate this situation
with suspension by the employer pending domestic enquiry or investigation into
any complaints [emphasis mine].
The final argument advanced was that the Court is nevertheless entitled to award subsistence
allowance as a matter of justice, equity and good conscience bearing in mind the
impecunious condition of the employee and his stated inability to sustain himself during the
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pendency of the proceedings. Dharmadhikari J. emphatically rejected this contention,

observing that the Labour court is not empowered to grant subsistence allowance on
specious grounds of equity and justice, and that writ jurisdiction under Art. 226 of the
Constitution cannot be exercised contrary to law. Ultimately, equity and justice require
that legal principles are adhered to and not given a go-by completely. There was some
doubt over whether this was contrary to the decision of a Division Bench of the Bombay
High Court in Air India, but Dharmadhikari J. held that it was not, because that case was
decided under s. 33 IDA, not s. 10. Since, however, the observations of the Division Bench
were broad in that case, it remains to be seen whether the single judges view will be
affirmed22. In sum, it is submitted that Dharmadhikari J.s conclusion is plainly correct as a
matter of statutory interpretation indeed, it would be odd to accept the proposition that a
dismissed employee is also a suspended employee, and that adjudication of the legality of
dismissal is in fact an investigation or inquiry to ascertain whether dismissal is appropriate.
That does not, of course, mean that this is a desirable state of affairs, but if the view is taken
that the benefit of subsistence allowance must extend to confirmatory proceedings in the
Labour Court, that is perhaps best left to the legislature.

CONCLUSION
A subsistence allowance is intended to cover the expenses incurred by an interpreter working
away from his/her professional address. It may consist of a flat-rate amount paid per day or
may involve an arrangement whereby the conference organiser pays all or part of the
interpreter's accommodation and board. In the agreement sector, these allowances are
governed by the relevant agreement. In the private market sector, they are negotiated between
the interpreter and the client. Workman who is placed under suspension shall during the
period of such suspension be paid a subsistence allowance at the following rates namely 23.
For the first ninety days of the suspension period subsistence allowance to be paid per month
shall be equal to one-half of basic wages, dearness allowance and other compensatory
allowances. If the enquiry gets prolonged and the workman continues to be under suspension
for a period exceeding ninety days, the subsistence allowance to be paid per month for a
further period of ninety days shall be equal to three fourths of such basic wages, dearness
allowance and other compensatory allowances.
22 Tata Chemicals Ltd. V. K.C. Acharya, A.I.R. 1964 Guj. 265.
23 Sri Gopal Mills Ltd. V. State of Punjab, (1959) I llj 639.
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If the enquiry is not completed within a period for 180 days, the workman shall be paid
basic wages, dearness allowance and compensatory allowance in full as subsistence
allowance to be paid per month until such time as the inquiry is finally concluded. Provided
that, where the findings of the Inquiry Officer show that such enquiry is prolonged beyond a
period of 90 days, or as the case may be 180 days for reasons directly attributable to the
workman, subsistence allowance to be paid per months shall for the period exceeding 90 days
or as the case may be 180 days, shall be reduced to one half of such basic wages, dearness
allowance and other compensatory allowance. The age for retirement or superannuation of
the workman may be sixty years or such other age as may be agreed upon between the
employer and the workman by any agreement, settlement or award which may be binding on
the employer and the workmen under any law for the time being in force24.

BIBLIOGRAPHY
BOOKS
1. S.N . Mishra ,labour and industrial laws,23rd ed.,2007,central law agency,Allahabad
2. V.G Goswami,Labour and industrial laws, 8th ed.,2004,hon'ble justice Mahavir singh
Central law agency Allahabad.
3. Cases and publication , Labour & Industrial laws,3 rd ed. Indian law institute , New
Delhi.
4. .Workmens Compensation Act Some Reflections,Binod Kumar Patro, Chittaranjan
Behera, Ramesh K. Sharma,Vol. 1, No. 1 (2007-07 - 2007-12)
5. Commentaries on the workmen compensation Act, K.D. Shrivastava, 1 st, 1985,
Eastern Book Company.

ARTICLES:-

24 C.S. Corpn.v. Ramratan Mahato, A.I.R. 1973 Cal. 258.

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1. Work Injury Compensation and the Duration of Nonwork Spells ,The Economic
Journal, Vol. 95, No. 379 (Sep., 1985), pp. 714-724
2.You are not what you were - Ashok Mitra after 14th November, 2007
3. Worker's Compensation - Know Your Rights, By Aaron Larson ,Law Offices of Aaron
Larson, July, 2003
EXTERNAL LINKS
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www.wikipedia.com
www.amzon.com
www.legalserviceindia.com
www.indiainfoline.com
WWW.TIMESOFINDIA.COM
WWW.THEHINDU.COM

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