No temporary workmen whether monthly rated, weekly rated, piece rated or
badli workers are entitled to any notice or pay in lieu thereof, if his services
are terminated, but the services of a temporary workman shall not be terminated
as a punishment unless he has been given an opportunity of explaining the
charges of misconduct alleged against him.
During the proceedings of the charges, the temporary workers are entitled to
subsistence allowance in the same manner as permanent workers as provided in the
Central Statute or in accordance with the law related to subsistence allowance
in the state. This is to ensure that the proceedings are concluded in a timely
manner and the employee is able to adequately represent himself before the
An order of suspension does not put an end to the relationship between the
master and the servant but prevents the worker from rendering service. If the
proceedings are concluded in favour of such worker, he/she shall be entitled
to all the benefits as if the worker had not been suspended irrespective of the
status of the worker i.e. permanent or temporary. In case of termination, the
right to claim subsistence allowance under the act survives and it is open to
the aggrieved person to claim the same.
However, the workers right to draw suspension allowance altogether expires if he
joins another establishment during the term of the proceedings.
Calculation Of Subsistence Allowance
The calculation of subsistence allowance for the daily wage workers must be done
in the manner in which the industry in which they were employed continues its
operations, if the industry does not operate on holidays and festivals they
shall not be entitled to the subsistence allowance for those days pending the
However, if the industry operates on all days, they shall be entitled to
subsistence allowance for all days and the contention no subsistence allowance
on the holidays cannot be raised. In case of agreement between the management
and the workers for new wages with retrospective effect, the payment of
subsistence allowance shall be according to the wages that the worker would have
rightly drawn just prior to suspension not according to the actual wages drawn
Typically, the subsistence allowance constitutes 50% of the wages drawn by the
worker prior to his suspension, up to a period of 90 days from the date of his
suspension. 75% for the period ranging from 90-180 days and 90% for any day
above 180. But it may vary in different states according to the State acts
thereby applicable. If the employee’s wage is below the Minimum wage prescribed,
the subsistence allowance shall be calculated on the basis on the Minimum
If the delay in the proceeding occurs on account of the employee concerned, the
allowance maybe reduced to ¼ of the wages payable prior to the suspension.
The subsistence allowance paid to a suspended employee is not recoverable or
refundable even though ultimately the suspended employee is removed from service
on the proof of misconduct for which he was proceeded against in departmental
Non-Payment Of Suspension Allowance
Non-Payment of Suspension allowance does not ipso facto invalidate a
disciplinary proceeding, however if it is shown that on account of non-payment
the employee is unable to present his case or not meet his daily expenses which
render him unable to present himself for the proceedings, the decision is liable
to be quashed. The employee must have a fair chance at hearing to present his
case in relation to the misconduct alleged, failing to provide such chance would
be a violation of the Principles of Natural Justice and cannot be entertained.
Subsistence allowance is paid to an employee to ensure continued survival,
availability of basic necessities while ensuring that unnecessarily delay does
not prolong the ultimate fate of the employee.
If such allowance is not paid and the employee is denied these basic
necessities, it will be a straight violation of the Right to Life of the
employee. During the period of suspension the employee is still a employee
willing to render services as and when called upon to do so, however the
employer prohibits him from rendering such services on account on fairness in
the departmental proceedings, therefore he is rightfully entitled to such
allowance from the employer and any non-payment which handicaps him is
Subsistence allowance ensures survival of the employee and maintenance of his
family during the suspension period and serves as a motivation for speedy
disposal of the proceedings on the part of the employer. Any person employed in
or in connection with the work of any establishment to do skilled, semi-skilled
or unskilled manual, supervisory, technical, clerical or any other kind of work
for hire or reward, whether the terms of employment be express or implied, but
does not include any such person who is employed mainly in a managerial or an
administrative capacity or as an out-worker is entitled to a subsistence
allowance if suspended on account of misconduct.
All such persons can rightfully claim subsistence allowance and relevant
interest on account of delay in payment of such allowance during the pendency of
proceedings against them. In case of delay in proceedings on their account the
employer can reduce the subsistence allowance thus paid to ¼ of the wages drawn
prior to suspension.
Adequate opportunity should be given to the employee to present his case and if
non-payment of subsistence allowance renders him incapable in any manner,
judgement rendered on account of such proceedings is liable to be quashed. The
rates of subsistence allowance vary in states, with Tamil Nadu and Kerala
providing 100% allowance post 180 days of the commencement of the proceeding.
- Government of India, Ministry of Labour and Employment, Industrial
Employment (Standing Orders) Central Rules, 1946 available at :
- V. Mohanna v. Commissioner of Labour/ Appellant Authority under Tamil
Nadu Payment of Subsistence Allowance Act, 1981, 2003 SCC Online Mad 679,
2004 (1) LLN 589 (Mad).
- Savithri A.N. v. Authority under the Kerala Payment of Subsistence
Allowance Act, 2008 SCC Online Ker 112.
- Fundamental Rules, Chapter VIII, Fundamental Rule 53, 54, Industrial
Employment (Standing Orders) Act, 1946, 10 A, 14(4).
- Vatsala Premchand Sarmal v. Raghunath Damodar Krachale, 2007 (4) BomCR
375 : 2007 (1) MhLj 705, Capt. M. Paul Anthony v. Bharat Gold Mines Ltd.
(1999) LLJ 1094.
- The Kerala Payment of Subsistence Allowance Act, 1972 s. 2(a).