In terms of population, after China, India is the second most populous nation. India is still labeled as a developing nation and within the boundary of our nation there are many unprivileged & undeveloped areas where people migrate to developed cities in search of work, money & livelihood. In the rural area there is a dearth of resources and that is why MNCs and other companies are establishing in the big cities and much-developed area is like a place full of opportunities. According to 2011 Census around two million migrants came to Delhi for work purpose. The government provides financial assistance to employees following their suspension as a result of disciplinary matters or ongoing investigations. This financial aid is referred to as a subsistence allowance, which aims to guarantee the uninterrupted sustenance of the suspended employee’s livelihood. The massive workforce of skilled and unskilled labour is employed in industries and factories and in order to protect their rights and protect them from exploitation it is essential to have an appropriate legislation.
PERSPECTIVE OF CONSTITUTIONAL LAW
Under the 7th schedule of the Concurrent List, the Constitution of India endows both Central and State governments with powers and while possessing these powers central and state governments have made more than 100 legislations on wages, social security, terms of service, and employment which have slowly created a lot of bewilderment for those who are layman and have no knowledge of the law. In 2020 Central Government have reformed labor laws by passing 3 bills as given below:
- Code of Industrial Relations, 2020
- Social Security Code, 2020
- Code of Occupational Safety & Health & Working Conditions, 2020
About 34 legislations pronounced by the Central Government with an aim to implement uniform reform laws and to limit overlapping laws. Subsistence allowance is a type of allowance under which a specific part of total wages is provided to the worker by the employer during the time of his suspension from the employment for some reason. This remittance is paid in order to meet his basic family needs and for his sustenance.
According to Article 21 of the Constitution of India, subsistence allowance is reckoned as a constitutional right of the workers. Though there is no law that commands the right of subsistence allowance to all the workers under an employer. Article 21 is thoroughly examined so as to ensure that the employee could subsist and make his both ends meet. The unskilled workers and even sometimes the skilled workers are dependent upon these salaries and to subsist they require basic salary or at least a specific part of their salaries. If they do not get paid any remittance to subsist then their constitutional right to live with dignity would be infringed.
In the case of Registrar the Co-operative Society vs. M. Elango, the Madras High Court said that each and every person who is an employee in the industry has to at least fulfill the basic needs and for that they need a salary, not fully but at least partly or half when the employee is under suspension.
INDUSTRIAL EMPLOYMENT ACT, 1946
Provision pertaining to Subsistence allowance is mentioned under Section 10A of the Industrial Employment Act, 1946. Under section 10A of the act, if there is any kind of disciplinary proceedings against workers and if the workers are suspended from the workplace due to such disciplinary action then in such cases the workers have the right to an allowance of half of his actual wage or salary and foregoing the date of suspension for the period of 90 days.
The workers are also entitled to get 75% of the remittance of the wage or salary in case of defer after ninety days and it is to be noted a maximum period of 180 days should be allowed to complete any sort of disciplinary action.
DISPUTE RESOLUTION
If there is any altercation related to subsistence allowance between the employer and the employee, then any of the parties can reach to the Labour Court of their local jurisdiction. As given above the new labour laws enacted to have the provision related to subsistence allowance under the Industrial Relation Code, 2020. The period of 180 days now has been reduced to 90 days.
CALCULATION OF SUBSISTENCE ALLOWANCE
The calculation of subsistence allowance is conducted as follow;
- Where the industry stays closed during the holidays and festivals, then workers have no right to get the subsistence allowance.
- If the industry functions on all the days the workers is entitled to subsistence allowance.
- If there is an agreement between the employers and the workers for the raised wages with the retrospective effect, the subsistence allowance shall be with respect to the wage which the workers would have got before the suspension and not as per the actual wage or salary.
- The subsistence allowance is usually half of the salary up to ninety days.
IS SUBSISTENCE ALLOWANCE A WAGE?
There have been judgments recorded where subsistence allowance was not considered a wage. In the case of ESIC vs. Management of Kirloskar Systems Ltd, the court said that allowance paid to the worker is not a wage as the agreement between the employer and the employee was not satisfied, the workers have been suspending from the work due to their own misconduct or misdemeanor.
In the case of Karnataka Central Co-operative Bank Ltd. vs. Karpi, It was said that the allowance/remittance is given to the workers so that they can subsist during the proceedings and afford their basic needs.
Know More: Payment of subsistence allowance.