2024 (1) TMI 664 - HC - Indian Laws

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

M/s. Hindustan Level Employees Union Versus M/s. Hindustan Unilever Limited

Bombay HC held that a company's customary practice requiring daily attendance marking at factory gate to receive subsistence allowance during suspension ... Non-payment of subsistence allowance in view of an unfulfilled condition stipulated by the Respondent – Company in the suspension order - whether the act of the Respondent – Company is in consonance with the provisions of Section 10(A) of the Industrial Employment (Standing Orders) Act, 1946? - HELD THAT:- Section 10(A) refers to payment of subsistence allowance during the period of suspension. From reading Section 10(A) of the said Act, it appears that the provision is a beneficial enactment to take care of employees who are placed under suspension and they are required to be paid the prescribed 50% wages as contemplated for the period under suspension. In the present case, the Respondent - Company has argued that it is a long standing customary practice of the Respondent - Company to require marking of attendance at the factory gate because of which subsistence allowance is denied to Mr. Natubhai Patel - A customary practice cannot be equated as a provision under any law or a provision under any other law and the provisions of Section 10(A) of the said Act clearly supervene in relation to the payment of subsistence allowance over the alleged customary practice followed by the Respondent - Company. Once it is found that the said customary practice is in clear conflict with the provisions of Section 10(A) 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. 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. In the present case, the said restrictive condition cannot be made a precondition to the extent of claiming that it was for ensuring that the employee was not gainfully employed during the period of suspension. Such an interpretation and argument deserves to be rejected and dismissed in the first instance itself. Such a stipulation is unreasonable and cannot be within the four corners of the statutory provisions. The impugned Award dated 13.08.2014 is quashed and set aside and it is declared that Mr. Natubhai Patel, the concerned employee is entitled to payment of subsistence allowance from the date of suspension till the date of his termination alongwith interest @ 10% per annum (simple interest) from the date on which each payment was due and payable till the same is paid over to him - It is directed that Petitioner shall compute the details of payment and inform the same to the Respondent - Company alongwith an authenticated copy of this judgment within a period of one week from today - The Respondent Company is directed to pay the entire amount as computed and entitled to alongwith interest to the concerned employee Mr. Natubhai Patel within a period of one week thereafter. Petition disposed off. 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.