2024 (1) TMI 664 - HC - Indian Laws

Company cannot require suspended employees to mark daily attendance for subsistence allowance under Section 10A

Bombay HC held that a company's customary practice requiring daily attendance marking at factory gate to receive subsistence allowance during suspension ... Payment of subsistence allowance under Section 10A - Precondition of marking attendance during suspension - Conformity of Standing Orders or customary practice with statutory provision - Right to subsistence allowance as a statutory entitlementPayment of subsistence allowance under Section 10A - Precondition of marking attendance during suspension - Conformity of Standing Orders or customary practice with statutory provision - Whether a condition in the suspension order requiring the suspended workman to report daily at the factory gate and mark attendance as a precondition for payment of subsistence allowance is lawful and enforceable in view of Section 10A of the Industrial Employment (Standing Orders) Act, 1946. - HELD THAT: - The Court examined Section 10A as a beneficial statutory provision that prescribes entitlement to subsistence allowance for a workman suspended pending enquiry and observed that such statutory entitlement cannot be curtailed by an employer's customary practice or by a condition in a suspension order. The provision of the Model/Certified Standing Orders requiring that a workman satisfy that he was not gainfully employed cannot be stretched to mean a precondition of daily attendance at the factory gate; customary practice is not a 'law' and cannot prevail over Section 10A. The Labour Court's finding (paragraph No.20 of the Award) that the employer's attendance condition was in consonance with Section 10A was held to be unreasoned and unsustainable. What is required under the statute is that the suspended employee not be gainfully employed; the employer cannot, by introducing a daily attendance stipulation as a precondition, defeat the statutory right. The Court therefore quashed the Award insofar as it upheld the attendance condition and directed payment of subsistence allowance with interest, leaving computation and payment to be carried out as ordered. [Paras 12, 13, 14, 15, 16]The condition of daily attendance at the factory gate as a prerequisite for subsistence allowance is illegal and the Labour Court's Award upholding it is quashed; the workman is entitled to subsistence allowance from suspension till termination with interest, and the employer is directed to pay after computation.Final Conclusion: Writ petition allowed; impugned Award dated 13.08.2014 quashed insofar as it sustained the attendance precondition; the employee is entitled to subsistence allowance from suspension until termination with interest; directions given for computation and payment. Issues Involved:1. Amendment to the Writ Petition 2. Challenge to the Award dated 13.08.2014 3. Requirement of Marking Attendance for Subsistence AllowanceSummary:1. Amendment to the Writ Petition:At the outset, the Petitioner sought and was granted permission to amend the Writ Petition to include a challenge under Article 227 of the Constitution of India in addition to the challenge under Article 226.2. Challenge to the Award dated 13.08.2014:The Writ Petition challenges the Award dated 13.08.2014 which rejected the Reference related to the Petitioner's claim for subsistence allowance denied by the Respondent-Company. The Labour Court upheld the denial on the ground that the suspended employee did not mark his attendance at the factory gate.3. Requirement of Marking Attendance for Subsistence Allowance:- Petitioner's Argument: The Petitioner argued that there is no legal requirement for a suspended employee to mark physical attendance at the factory gate to be eligible for subsistence allowance. They cited various judgments, including Supreme Court decisions, to support that the condition imposed by the Respondent-Company was illegal, unfair, and contrary to Section 10(A) of the Industrial Employment (Standing Orders) Act, 1946.- Respondent's Argument: The Respondent contended that the requirement to mark attendance was a long-standing customary practice to ensure the employee was not gainfully employed elsewhere during suspension. They argued that the condition was just, fair, and legal, and cited several judgments to support their stance.- Court's Analysis: The Court found that the condition imposed by the Respondent-Company was not supported by any rule, regulation, standing order, or statutory enactment. It held that such a customary practice could not prevail over the statutory provisions of Section 10(A) of the Industrial Employment (Standing Orders) Act, 1946. The Court concluded that the condition was illegal, unfair, and contrary to the statutory provisions.Judgment:The Court quashed and set aside the impugned Award dated 13.08.2014. It declared that the concerned employee, Mr. Natubhai Patel, was entitled to payment of subsistence allowance from the date of suspension till the date of termination, along with 10% simple interest per annum. The Respondent-Company was directed to compute and pay the due amount within a specified period.Conclusion:The Writ Petition was allowed, and the Court provided clear directions for the computation and payment of the subsistence allowance along with interest. The judgment emphasized that statutory provisions cannot be overridden by customary practices.