| SooperKanoon Citation | sooperkanoon.com/837030 |
| Subject | Labour and Industrial |
| Court | Chennai High Court |
| Decided On | Dec-08-2006 |
| Case Number | W.P. Nos. 16653 to 16655 of 2000 |
| Judge | K. Chandru, J. |
| Reported in | (2007)1MLJ517 |
| Acts | Tamil Nadu Payment of Subsistence Allowance Act, 1981 - Sections 2, 3, 3(1) and 3(3); ;Industrial Establishments (Standing Orders) Act, 1946; Industrial Disputes Act - Sections 2 and 33(C)(2); Tamil Nadu Co-operative Society Act; Tamilnadu Primary Agricultural Co-operative Bank Common Cadre Regulations, 2000 |
| Appellant | K. Chakarabani |
| Respondent | The Presiding Officer, Labour Court and the Panruti Agricultural Producers Co-operative Marketing So |
| Appellant Advocate | N. Thiagarajan, Adv. |
| Respondent Advocate | P. Selvi, Adv. for Respondent 2 |
| Cases Referred | V.P. Gidroniya v. The State of Madhya Pradesh and Anr. |
K. Chandru, J.
1. In all these writ petitions, the writ petitioner is a Cashier working under the second respondent Co-operative Society. He was suspended from service pending enquiry by an order dated 29.8.1985 and finally dismissed on 18.9.1997. He approached the first respondent Labour Court with petitions claiming certain amounts for three different periods, which, according to him, are payable on account of his prolonged suspension. His petitions were taken on file in C.P. Nos. 117 of 1995, 115 of 1996 and 43 of 1997 and notice was ordered to the second respondent Society. The first respondent Labour Court, after hearing the parties, passed a common order dated 23.02.1999, which is under challenge before this Court.
2. I have heard the arguments of Mr. N. Thiagarajan, learned Counsel appearing for the writ petitioner workman and Ms. P. Selvi, learned Counsel appearing for the second respondent Society and have perused the records.
3. The Tamil Nadu Payment of Subsistence Allowance Act, 1981 (Tamil Nadu Act 43 of 1981) [for short 'P.S. Act'] was enacted with a view to provide the payment of Subsistence Allowance to the employees during the period of suspension. The objects and reasons for enacting the same is set out as below:
It has been reported to Government that out of the 1,675 establishments for which Standing Orders under the Industrial Establishments (Standing Orders) Act, 1946 (Central Act XX of 1946) have been certified, 1,631 establishments have not yet amended their Standing Orders to provide for payment of subsistence allowance to employees during the period of their suspension. The progress made by establishments in amending the Standing Orders providing for subsistence allowance has been far from satisfactory. Further, Government have also been receiving representations that incorporation of the provisions relating to subsistence allowance in the Model Standing Orders in every industrial establishment is a cumbersome process, and that a separate legislation might be thought of to make it obligatory on the part of the managements to pay subsistence allowance to the employees during the period of their suspension in any enquiry.
2. Government have accordingly decided to undertake legislation to make it obligatory on the Managements to pay subsistence allowance to the employees during the period of their suspension, pending enquiry.
4. The Act was brought into force with effect from 21.7.1981. Section 2(c) of the P.S. Act defines 'Establishment' which includes any industry. Under Section 2(e) of the P.S. Act, the term 'industry' has been defined as an industry within the meaning of Section 2(j) of the I.D. Act. Section 3 of the Act provides for payment of Subsistence Allowance for any employee, who is placed under suspension. During the period of such suspension, for the first 90 days, an employee is entitled for 50% of the wages which he was drawing immediately before suspension and if it exceeds 90 days but does not exceed 180 days, the employee is entitled to receive Subsistence Allowance equal to 75% of the wages and even thereafter if the suspension exceeds beyond 180 days, that employee will be entitled to receive wages in full which he was drawing immediately before suspension. It is only in cases where the enquiry is prolonged beyond the period of 90 days for reasons directly attributable to the employees, the Subsistence Allowance for the period exceeding 90 days shall be reduced to 50% of the wages. Further, there is a disqualification with reference to the employee, who has been employed in any establishment other than the establishment where the employee was working immediately before his suspension. Section 3(3) clearly provides that an employee in no event, will be liable to refund or forfeit any part of the subsistence allowance admissible to him which are paid under Section 3(1) of the said Act.
5. The provisions of the said Act are undoubtedly applicable to the Co-opearative Society and this Court as early as in 1989 (1) L.L.N. 689 [C. Selvaraj and Ors. v. Deputy Commissioner of Labour, Salem and Anr.] has held that provisions of this Act will apply to co-operative Societies. In fact, in that decision, this Court went to the extent of stating that the term employee should be understood in terms of the work actually performed by the workmen and mere nomenclature cannot be a ground to deny him the subsistence allowance.
6. In 2002 (4) CTC 339 [The Management, T.P. Spl. 67 Goundanpalayam Primary Agricultural Cooperative Bank Ltd. v. Assistant Commissioner of Labour], a learned Judge has held that the Tamil Nadu Co-operative Society Act is a special law and, therefore, a person designated as a Secretary, who is in overall control of the Society, is not entitled to claim subsistence allowance as per the Act.
7. Very recently, another learned single Judge of this Court in his decision reported in ., Thiruvannamalai District and Anr.] held that in respect of common cadre employees, their service conditions are governed by G.O. Ms. No. 55 Cooperation, Food and Consumer Protection Department dated 24.3.2000 and, hence eligible to claim subsistence allowance in terms of the Tamilnadu Primary Agricultural Co-operative Bank Common Cadre Regulations 2000.
8. In the present case, the petitioner is only a Cashier and he was suspended with effect from 29.8.1985. He was issued with a charge memo dated 13.12.1986 and for the reasons best known to the second respondent Society, he was dismissed from service by order dated 18.9.1997. In this context, the question for consideration is whether the writ petitioner workman was entitled to be paid subsistence allowance and if the answer is in affirmative, then as to the rate with which he is eligible to get the amount.
9. The writ petitioner approached the first respondent Labour Court under Section 33(C)(2) of the I.D. Act and he has filed three claim petitions being C.P. Nos. 117 of 1995, 43 of 1997 and 115 of 1996 respectively. He has not challenged the order of dismissal passed against him in a regular industrial dispute. But, on the contrary, the contention of the writ petitioner before the Labour Court was that bye-laws of the second respondent Society provides for suspension pending enquiry only for a period of three months and since that order has not been extended, he is eligible for full wages. However, the power of suspension is not under challenge and the bye-laws referred to, provide for suspension for a period of three months at a time. Therefore, the intention of the said bye-law is that at every interval of three months, it will have to be reviewed by the authorities. However, the bye-laws are totally silent in respect of the payment of subsistence allowance.
10. It is well settled that if an employee, who is not governed by any Rules or terms of contract of employment but kept under suspension by the employer and if the terms of contract do not provide for temporary suspension, then the employer is bound to pay full wages to the workman. The Supreme Court vide its decision reported in : (1968)IILLJ700SC [Balvantrai Ratilal Patel v. State of Maharashtra] has held as follows:
The general principle therefore is that an employer can suspend an employee pending an inquiry into his misconduct and the only question that can arise in such suspension will relate to payment during the period of such suspension. If there is no express term relating to payment during such suspension or if there is no statutory provision in any enactment or rule the employee is entitled to his full remuneration for the period of his interim suspension. On the other hand, if there is a term in this respect in the contract of employment or if there is a provision in the statute or the rules framed thereunder providing for the scale of payment during suspension the payment will be made in accordance therewith. This principle applies with equal force in a case where the Government is an employer and a public servant is an employee with this qualification that in view of the peculiar structural hierarchy of Government administration, the employer in the case of employment by Government must be held to be the authority which has the power to appoint the public servant concerned. It follows therefore that the authority entitled to appoint the public servant is entitled to suspend him pending a departmental enquiry into his conduct or pending a criminal proceeding, which may eventually result in a departmental enquiry against him. But what amount should be paid to the public servant during such suspension will depend upon the provisions of the statute or statutory rule in that connection. If there is such a provision the payment during suspension will be in accordance therewith. But if there is no such provision, the public servant will be entitled to his full emoluments during the period of suspension.
Further, the same principle was reiterated by the Supreme Court vide its decision reported in : (1970)IILLJ143SC [V.P. Gidroniya v. The State of Madhya Pradesh and Anr.] The relevant passage occurring in paragraph 8 (page 366) is usefully extracted:
It is equally well settled that an order of interim suspension can be passed against the employee while an enquiry is pending into his conduct even though there is no such term in the contract of employment or in the rules, but in such a case the employee would be entitled to his remuneration for the period of suspension if there is no statute or rule under which, it could be withheld. The distinction between suspending the contract of a service of a servant and suspending him from performing the duties of his office on the basis that the contract is subsisting is important. The suspension in the latter case is always an implied term in every contract of service. When an employee is suspended in this sense, it means that the employer merely issues a direction to him that he should not do the service required of him during a particular period. In other words, the employer is regarded as issuing an order to the employee which because the contract is subsisting, the employee must obey.
11. But, however, after the advent of the Payment of Subsistence Allowance Act, which is a law exclusively provides for subsistence allowance for employees pending enquiry and which completely governs the field and the writ petitioner workman having been covered by the said definition of employee under the I.D. Act, then, the rate of subsistence allowance will have to be calculated only in terms of the Act. Therefore, the fancy claim made by the workman seeking for payment under several heads including claim for full wages even from the starting point as well as bonus, surrender leave, contribution to welfare fund are all without any basis. It goes without saying that a claim under Section 33(C)(2) of the I.D. Act is available only when there is an entitlement either under any law, contract, settlement or under an Award.
12. However, the contention of the second respondent Society is that in the absence of any provision under the bye-laws, they are not bound to pay any subsistence allowance and that the writ petitioner workman has committed serious misconducts and the same is only stated to be rejected. Further, the contentions that the writ petitioner was dismissed by an order dated 18.9.1997 and it will take retrospective effect (i.e., from the date of suspension, viz., 29.8.1985) and that he is not eligible for any payment, and that the writ petitioner has not questioned the order of dismissal and unless and until the order of dismissal is set aside, they are not bound to make any payment to the workman are not available to the second respondent Society in the light of the statutory enactment, viz., Tamil Nadu Payment of Subsistence Allowance Act, and which has also been made applicable to the Co-operative Societies. The contention to the contrary has been rejected by this Court vide decisions referred to above. Therefore, the further contention of the second respondent that the writ petitioner workman will have to first question the order of dismissal on the theory of merger cannot be accepted in the light of the clear statutory provisions in favour of the workman.
13. However, the second respondent Society is correct in contending that all the sums computed by the Labour Court cannot be granted and the workman is only eligible for subsistence allowance in terms of the Rules, which are applicable to him.
14. In the light of the above, the writ petitions are liable to be allowed in part and the common order passed by the Labour Court dated 23.02.1999 is liable to be set aside to the extent that it grants amounts under various heads including the surrender leave, bonus and welfare fund. Even with reference to the subsistence allowance, the rate of subsistence allowance will have to be worked out in terms of the Payment of Subsistence Allowance Act, viz., for the first 90 days, 50% of the wages which the workman was drawing immediately before his suspension and for the period 90 to 180 days, 75% of the wages and beyond 180 days, full wages. Since the writ petitioner workman has already approached the Labour Court and it has computed the amount in its own way and if once again, the workman is sent to the Labour Court by an order of remand, it will only create great hardship.
15. Under the above circumstances, the writ petitions shall stand allowed in part and the second respondent Society is directed to compute the amount payable to the writ petitioner workman for the period from 29.8.1989 to 18.9.1997 in terms of Section 3(1) of the Tamil Nadu Payment of Subsistence Allowance Act and make the payment within a period of eight weeks from the date of receipt of a copy of this order and the other claims made by the writ petitioner workman will stand rejected. If the second respondent successfully challenges his dismissal, then he can certainly make a claim on the other heads which he had made in the present claim petitions, which are under challenge. However, there will be no order as to costs.