Suspended Employee Not Required To Mark Daily Attendance For Subsistence Allowance: Bombay High Court

Bombay High Court has held that an employee is entitled to receive subsistence allowance during suspension as per Section 10A of the Industrial Employment (Standing Orders) Act, 1946, without any condition imposed by the employer requiring the employee to mark daily attendance at the workplace.

Subsistence allowance is given to an employee to maintain himself and his family during suspension in the absence of a salary.

The judgment was delivered by Justice Milind N. Jadhav in a writ petition filed by Hindustan Level Employees Union challenging an award passed by the Labour Court in Daman rejecting the Union's claim for payment of subsistence allowance to its member Natubhai Patel.

Patel was suspended pending a domestic inquiry by his employer Hindustan Unilever Ltd (HUL) and was directed to report and mark attendance daily at the factory gate to receive subsistence allowance, failing which he would be marked absent and not paid for that day.

Quashing the award, the High Court held that Section 10A of the Act provides for payment of subsistence allowance to an employee under suspension at prescribed rates without any other condition.

"Once it is found that the said customary practice is in clear conflict with the provisions of Section 10A of the said Act, the claim of the employee being entitled to subsistence allowance cannot be permitted to be defeated on the basis of a customary practice followed by the Respondent - Company. A customary practice cannot be equated as a provision under any law or a provision under any other law and the provisions of Section 10A clearly supervene in relation to the payment of subsistence allowance over the alleged customary practice followed by the Respondent - Company" the court observed.

The court rejected HUL's arguments that requiring daily attendance was a customary practice to ensure the suspended employee was not working elsewhere, holding this could not override the Act.

"What is required under the law is for the suspended employee to inform the employer that he is not gainfully employed elsewhere and nothing more. Once the statutory provisions does not provide for requiring marking of attendance everyday such introduction of a stipulation as per customary practice is illegal in law, no matter what the concerned employer desire from introducing such a condition", the High Court said.

Advocate Jane Cox, for the Union, had argued that a condition put by the employer directly relating to entitlement of subsistence allowance has to be within the parameters and four corners of Section 10A only. She contended HUL's condition was illegal, unfair and unjust.

HUL's counsel Supriya Mujumdar contested the maintainability of the petition, arguing that Patel had not challenged the suspension order or attendance condition. She contended that he was obligated to prove he was not employed elsewhere during the suspension period, having partly complied with the attendance rule initially.

Dismissing these submissions, the High Court declared "Patel is entitled to payment of subsistence allowance from the date of suspension till the date of his termination along with interest at 10% per annum." It directed the union to compute and inform the payment details to HUL, which has to pay the amount within a week thereafter.

The judgment clarified that employers cannot impose additional conditions or formalities outside the statute to restrict workers' entitlements during suspension.

Case title - M/s. Hindustan Level Employees Union Versus M/s. Hindustan Unilever Limited

Case Number - WRIT PETITION NO. 8562 OF 2015

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