1. Employees suspended pending dismissal permission under Section 33(1) of the Industrial Disputes Act, 1947 — Dispute over entitlement to subsistence allowance during the suspension period. (Para 2 , 3 )
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1999 Supreme(SC) 1344
SUPREME COURT OF INDIA
D.P.Mohapatra : R.P.Sethi : S.Saghir Ahmad
Ram Lakhan
Versus
Presidio Officer
Case No. : 6566 , 6567 , 6568 of 1999
Date of Decision : 11/17/99
Important Points
An employer's right to suspend an employee pending permission under Section 33(1) of the Industrial Disputes Act, 1947, is subject to the employee's right to receive a subsistence allowance to ensure survival, as denying such allowance during prolonged proceedings is unfair and violates natural justice.
Subject
Labour Law - Industrial Disputes
Act Referred
Headnote
(A) Industrial Disputes Act, 1947 - Section 33(1) - Right of employer to suspend employee pending permission to dismiss - Right of employee to receive subsistence allowance - Right to life under Article 21 of the Constitution read into service rules - Denial of subsistence allowance during prolonged proceedings amounts to gross unfairness (Paras 13, 16, 20).
(B) Suspension - Nature and effect - Suspension does not end service but temporarily suspends the contract of employment - Employer is not bound to pay full wages, but must provide subsistence allowance to ensure the employee's survival (Paras 18, 23).
Facts of the case:
Employees were suspended following a departmental enquiry. The employer sought permission under Section 33(1) of the Industrial Disputes Act to dismiss them. The employees claimed subsistence allowance during the pendency of the application. The lower tribunal and High Court denied the allowance based on a previous decision of the Supreme Court.
Findings of Court:
The court held that while the employer has the right to suspend an employee pending the disposal of an application under Section 33(1), the employee is entitled to subsistence allowance to sustain themselves.
Issues: Whether an employee is entitled to subsistence allowance during the period of suspension pending the disposal of an application for permission to dismiss filed by the employer under Section 33(1) of the Industrial Disputes Act, 1947.
Ratio Decidendi: The right of the management to suspend and the right of the employee to receive subsistence allowance are intertwined. While the employer can suspend the employee to avoid paying full wages, the employee cannot be expected to wait indefinitely without any means of livelihood, as this would be unfair and violate the principles of natural justice.
Result: Appeals allowed.
(B) Suspension - Nature and effect - Suspension does not end service but temporarily suspends the contract of employment - Employer is not bound to pay full wages, but must provide subsistence allowance to ensure the employee's survival (Paras 18, 23).
Facts of the case:
Employees were suspended following a departmental enquiry. The employer sought permission under Section 33(1) of the Industrial Disputes Act to dismiss them. The employees claimed subsistence allowance during the pendency of the application. The lower tribunal and High Court denied the allowance based on a previous decision of the Supreme Court.
Findings of Court:
The court held that while the employer has the right to suspend an employee pending the disposal of an application under Section 33(1), the employee is entitled to subsistence allowance to sustain themselves.
Issues: Whether an employee is entitled to subsistence allowance during the period of suspension pending the disposal of an application for permission to dismiss filed by the employer under Section 33(1) of the Industrial Disputes Act, 1947.
Ratio Decidendi: The right of the management to suspend and the right of the employee to receive subsistence allowance are intertwined. While the employer can suspend the employee to avoid paying full wages, the employee cannot be expected to wait indefinitely without any means of livelihood, as this would be unfair and violate the principles of natural justice.
Result: Appeals allowed.
Legal Category Hierarchy
Table of Contents
2. Employees claimed entitlement to subsistence allowance during suspension — Management contended that suspension pending Section 33(1) permission relieves the employer of the obligation to pay wages. (Para 3 )
3. Denial of subsistence allowance during prolonged proceedings violates natural justice and the Right to Life under Article 21, as employees require minimum livelihood to survive. (Para 9 , 13 , 16 , 18 , 23 )
4. The employer's right to suspend an employee pending Section 33(1) permission is intertwined with the employee's right to receive subsistence allowance for survival. (Para 20 , 21 , 23 )
5. Appeals allowed — Impugned judgments set aside — Direction to pay subsistence allowance as per rules or full salary in the absence of such provisions. (Para 24 )
6. Can an employer suspend an employee while seeking permission to dismiss under Section 33(1) of the Industrial Disputes Act?
Yes, if the employer has conducted a departmental enquiry and prima facie finds the employee liable for dismissal, they may suspend the employee pending the Tribunal's decision on the Section 33(1) application. (Para 20 )
7. Is a suspended employee entitled to subsistence allowance during the pendency of an application under Section 33(1)?
Yes, while the employer is not obligated to pay full salary, they must pay a subsistence allowance to ensure the employee can sustain themselves until the application is finally disposed of. (Para 20 , 21 , 23 )
8. How are the rulings in the Hotel Imperial and Fakirbhai cases reconciled regarding suspension and payment?
There is no conflict; the Hotel Imperial case establishes the employer's right to suspend an employee, while the Fakirbhai case establishes the employee's right to receive subsistence allowance during that suspension. (Para 21 )
9. What is the legal significance of subsistence allowance in service jurisprudence?
Subsistence allowance is linked to the Right to Life under Article 21 of the Constitution, providing the minimum livelihood necessary for an employee to survive during the period of suspension. (Para 13 , 18 )
S.Saghir Ahmad, J.
(1) LEAVE granted in all Special Leave Petitions.
(2) THE appellants were the employees of the Swatantra Bharat Mill against whom charge-sheets were issued in the year 1986 and they were subsequently suspended.
(3) SINCE an industrial dispute was already pending before the Industrial tribunal vide Delhi Administration Notification No. F- 24(798)/94-Lab dated 1.4.86, an application was filed by the Management under Section 33( 1 ) of the Industrial Disputes Act, 1947 for permission to dismiss the employees on completion of enquiry. This application was opposed by the appellants who filed objections and claimed that they were entitled to be paid Subsistence Allowance during the pendency of the disciplinary proceedings for the period of suspension. On this, the tribunal framed the following preliminary issue:- "At what rate, if any, the Management is to pay the subsistence allowance to the workman,"
(4) THE Presiding Officer, Industrial Tribunal, Tis Hazari, Delhi, relying upon the decision of this court in The Management, Hotel Imperial, New Delhi & Ors. vs. Hotel Workers Union, AIR 1959 SC 1342, dismissed the objections of the appellants and held that they were not entitled to any Subsistence Allowance. The appellants thereafter filed Writ Petitions in the High Court of Delhi which were dismissed by the impugned judgment reading as under:- "In view of the decision of the larger Bench of the Supreme court in the case of The Management, Hotel Imperial, New Delhi & Ors. vs. Hotel Workers Union reported as AIR 1959 SC 1342, we are not inclined to interfere in this petition. Dismissed."
(5) IT appears that the decision of this court in Fakirbhai Fulabhai Solanki vs. Presiding Officer & Anr., (1986)3 SCC 131 = 1986(2) SCR 1059 = AIR 1986 SC 1168, was cited before the High court, but it did not follow the decision and preferred to follow the Judgment in Hotel Imperials case (supra).
(6) THIS court, while entertaining these appeals had passed the following order on 2/1/1996- "In view of the fact that the judgment in Hotel Imperials case was rendered by a three Judge bench, we consider it appropriate that these petitions be listed before a three Judge bench. Appropriate order from the Honble the chief justice may be obtained in this behalf. In the event the special leave petitions cannot be listed within the next two weeks, the application for interim stay may be put up before the three Judge Bench within that period."
(7) IT is in these circumstances that the matter has come up before us.
(8) IN Hotel Imperials case (supra), this Court had laid down as under:- "We have, therefore, to see whether it would be reasonable for an Industrial Tribunal where it is dealing with a case to which Section 33 of the Act applies, to imply a term in the contract giving power to the master to suspend a servant when the master has come to the conclusion after necessary enquiry that the servant has committed misconduct and ought to be dismissed, but cannot do so because of Section 33. It is urged on behalf of the respondents that there is nothing in the language of Section 33 to warrant the conclusion that when an employer has to apply under it for permission he can suspend the workmen concerned. This argument, however, begs the question because if there were any such provision in Section 33, it would be an express provision in the statute authorising such suspension and no further question of an implied term would arise. What we have to see is whether in the absence of an express provision to that effect in Section 33, it will be reasonable for an Industrial tribunal in these extraordinary circumstances arising out of the effect of Section 33 to imply a term in the contract giving power to the employer to suspended the contract of employment, thus relieving himself of the obligation to pay wages and relieving the servant of the corresponding obligation to render service. We a
