Though a suspended workman does not work, he is entitled to subsistence allowance

When an employer suspends an employee pending investigation or inquiry into complaints or charges of misconduct against him, the contract of service is not rescinded and the relationship of employer and employee subsists. Thus, during suspension the employee is entitled to receive subsistence allowance. In M/s. Kshetriya Sri Gandhi Ashram, Gorakhpur vs. Deputy Labour Commissioner/Prescribed Authority under Payment of Wages Act and Another, Allahabad High Court explains subsistence allowance as a nick name for “reduced wages” or “reduced salary.” Thus, such subsistence allowance should be paid at the rate of 50% of the wages which the workman was entitled to, immediately preceding the date of such suspension, for the first 90 days of suspension and at the rate of 75% thereafter.


Source: Labour Law Reporter, pg. no. 897, Allahabad High Court, August 2009


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