Subsistence Allowance
INTRODUCTION
India is having the second largest population in the world. India is still a developing country and within our country, there are several undeveloped parts where people migrate to cities in search of work, shelter, and development. In the rural or undeveloped area there is a lack of resources and as MNCs and other companies are setting up in the urban and much-developed area is like a flower full with nectar for bees. There approx. 1.7 million migrant workers in Delhi only. The huge workforce either skilled or unskilled is there for industries and factories and hence to preserve their right and protect them from exploitation it is important to have proper legislation.
ROLE OF CONSTITUTION LAW
Under the Seventh Schedule of the Concurrent List, the Constitution of India empowers both Centre and State governments. And with these power centre and state have made more than 100 legislation on wages, social security, terms of service, and employment which have gradually created a lot of confusion for those who have no knowledge of the law. Last year Central Government has recently reformed labour laws bypassing 3 (Three) bills as follow
- The Occupational Safety, Health and Working Conditions Code, 2020
- The Industrial Relations Code, 2020
- The Code on Social Security, 2020
Around 34 legislation passed by the Central Government with an objective to carry out uniform reform laws and to limit overlapping provisions. Subsistence allowance is allowance under which a certain percentage of total wage is given to the workmen by the employer during the period of his suspension from the employment due to some reason. These allowances are paid in order to fulfill his basic family need and to run his livelihood.
Under Article 21 of the Constitution, subsistence allowance is considered as a constitutional right of the workmen under Article 21. Though there is no legislation that mandated the right of subsistence allowance to all the workmen under an employer. Article 21 is under the spotlight so as to make sure that the employee could survive and his basic needs and livelihood are fulfilled. The unskilled laborer and even sometimes the skilled labor is dependent upon these salaries and to survive they need basic salary or at least part of their salaries. And if they are not paid any allowance to survive their right to live with dignity would be violated and further discrimination among the worker is there further violating Article 14 of the Constitution.
In Registrar the Co-operative Society N.V. Natarajan & Ors. Vs. M. Elango, the Madras High Court observed that every person who is working in the industry has to fulfill the basic need and for that they need a salary, not wholly and at least partially when the employee is under the period of suspension.
INDUSTRIAL EMPLOYMENT (STANDING ORDERS) ACT, 1946
Under Section 10 A of the Industrial Employment (Standing Order) Act 1946 provision of subsistence allowance is mentioned. Under this provision, there is any sort of disciplinary proceeding against a workman and if the workmen are suspended from the industry due to such disciplinary action then in those cases the workmen of the industry are entitled to an allowance of 50% of his actual wage and preceding the date of suspension for ninety days.
The workmen are further entitled to get 75% of an allowance of the wage in case of delay after 90 days and further to be noted a maximum period of 180 days should be permitted to complete any kind of disciplinary action.
DISPUTE RESOLUTION
Where there is any dispute in case of subsistence allowance between the employer and the employee, any one of the parties can approach the Labour Court within their local jurisdiction. As mentioned above the new labour laws passed to have the provision of subsistence allowance under the Industrial Relation Code 2020. The period of extended 180 days has been reduced to 90 days.
SUBSISTENCE ALLOWANCE AND WAGE?
There are judgments that do not consider subsistence allowance as a wage
Case law:- In ESIC Vs. Management of Kirloskar Systems Ltd 1985 court stated that remuneration/ allowance paid to the worker is not a wage as the contract between employer and employee was not fulfilled, the worker has been suspending from the work from their own misconduct.
In Karnataka Central Co-operative Bank Ltd. Vs. Karpi, 1987, the allowance is given to the workmen to survive during the proceeding and to cope up with the basic needs.
In O.P. Gupta V Union of India and Ors 1988, the Supreme Court defines the ‘subsistence allowance’ as the word ‘Subsist’ defined in the Oxford Dictionary as “to remain alive as on food; to continue to exist”. “Subsistence” means minimum livelihood.” Subsistence allowance is given to the employees of the company to fulfill their basic necessities during the period of suspension from work in the industry. Allowance is also provided to the workmen so that the proceeding against the employee shall be conducted adequately.
HOW TO CALCULATE THIS ALLOWANCE
The calculation of subsistence allowance shall be done as follow;
- In the case where the industry does not operate during the holidays and festivals, the workmen are not entitled to get the subsistence allowance.
- Where the industry operates on all the days the workmen in entitled to subsistence allowance for all the days.
- Where there is an agreement between the management and the workers for the updated wages the retrospective effect, the subsistence allowance shall be in respect to the wage which the worker would have got prior to suspension and not as per the actual wage.
- The subsistence allowance is usually 50% of the wages up to 90 days.
CONCLUSION
Subsistence Allowance is a necessity for every employee which he/she requires o sustain and to maintain his her livelihood. Right of subsistence allowance under Article 21 of the Constitution. If the employee gets the benefit subsistence allowance maintain the livelihood during the period of suspension will not violate any of his fundamental rights. Industrial Relations Code 2020 the code defines the term ‘worker but the code does not specify if the worker is carrying out work related to managerial/administrative/supervisory then they will come under the category of subsistence allowance or not.