Suspension of an employee means temporarily disallowing an employee from working due to various reasons. It can either lead to their reinstatement or termination. An employee can be suspended on several grounds including involvement in criminal prosecution or even a domestic inquiry.
The judgments primarily focus on the allowance provided to an employee during the period of their suspension. During this period, however, an employee could be entitled to subsistence allowance based on the governing laws and regulations. The question that often arises is whether an employee is also entitled to full salary payment during the time of their suspension.
Is an employee who was suspended on the grounds of involvement in a criminal prosecution, is entitled to full salary for the period of their suspension even after their acquittal?
Can the order of suspension be automatically set aside on the reinstatement of the employee?
Will the acquittal and the dismissal order invalidate the departmental procedures or the dismissal order issued against the appellant?
Whether the appellant is entitled to wages for the period during which they were forcibly kept out of service by the management of the school?
Whether an employer and a suspended employee are liable to contribute under the Employees’ State Insurance (ESI) Act, 1948 in connection with the subsistence allowance received during the period of suspension?
An employee is not entitled to full salary for the period of his suspension, that was caused due to pending investigation, inquiry, or trial in a criminal case, merely because he was acquitted and later reinstated.
Furthermore, an employee will be entitled to full salary only when the competent authority treats him as being on duty while he was suspended.
If the criminal case and the departmental proceedings are based on the same set of facts, it would be unjust, unfair, and oppressive to uphold the conclusions made in the ex-parte departmental proceedings after the prosecution's case was dismissed and the appellant was acquitted.
Additionally, it has been held that the termination of the employee was illegal, she was not entitled to back wages, held that the management was liable to pay full back wages to the employee during which she was suspended and unemployed.
Subsistence allowance received by the employees forms part of ‘wages’ as defined under Section 2 (22) of the ESI Act. Consequently, the employee is obligated to contribute under the Act as an employee’s contribution and the employer is obligated to pay their part of the contribution equally.
Supreme Court of India
Capt.M. Paul Anthony vs Bharat Gold Mines Ltd. & Anr on 30 March, 1999
Author: S Ahmad
Bench: S. Saghir Ahmad, V N Khare.
PETITIONER:
CAPT.M. PAUL ANTHONY ..
Vs.
RESPONDENT:
BHARAT GOLD MINES LTD. & ANR.
DATE OF JUDGMENT: 30/03/1999
BENCH:
S. Saghir Ahmad, & V N Khare.
JUDGMENT:
S.
SAGHIR AHMAD, J.
Leave granted.
Whether departmental proceedings and proceedings in a criminal case launched on the basis of the same set of facts can be continued simultaneously is a question which crops up perennially in service matters and has once again arisen in this case in the following cirucmstances.
Bharat Gold Mines Ltd. (Respondent No. 1) is a Govt. undertaking at Kolar Gold Fields in Karnataka, where the appellant was appointed as a Security Officer on 31.10.1983. On 2nd of June, 1985, a raid was conducted by the Superintendent of Police at the house of the appellant from where a mining sponge gold ball weighing 4.5 grams and 1276 grams of 'gold bearing sand' were recovered. Thereafter, on the same day, a First Information Report was lodged at the Police Station and a criminal case was registered against the appellant, who was placed under suspension on 3.6.1985. The next day, namely, on 4th of June, 1985, a charge-sheet was issued proposing a regular departmental inquiry with regard to the recovery of the above articles from his house. On 11th of June, 1985, the appellant made a representation to the Disciplinary Authority denying the allegations made against him in the charge sheet and pleaded that the entire episode was a concoction. He prayed that the departmental proceedings initiated against him may be dropped or may, in the alternative, be postponed till the conclusion of the criminal proceedings against him on the basis of the First Information Report lodged against him at the Police Station on 2.6.1985. The representation was rejected on 19.6.1985 and the appellant was informed that the disciplinary proceedings would be held against him on 1.7.1985.
In the meantime, the appellant filed Writ Petition No. 10842 of 1985 in the Karnataka High Court for a direction to restrain the respondents from proceeding with the disciplinary inquiry till the conclusion of the criminal case as the appellant's defence was likely to be prejudiced. This Writ Petition was disposed of by the High Court on 19.8.1985 and a direction was issued to the respondents to consider and dispose of the appellant's appeal filed against the order of suspension but liberty was given to the respondents to defer the disciplinary proceedings if it was found expedient so to do. The respondents did not defer the departmental proceedings and continued the proceedings which the appellant could not attend on account of his ill-health and financial difficulties which compelled him to shift to his home-town in Kerala. The respondents were informed by a number of letters supported by medical certificates about his illness with a request for staying the departmental proceedings and await the result of the criminal case. But the Inquiry Officer rejected the request and recorded his findings on 10.5.1986 holding the appellant guilty. These findings were accepted by the Disciplinary Authority and by order dated 7th June 1986, the appellant was dismissed from service.
On 3rd of February, 1987, judgment in the criminal case was pronounced and the appellant was acquitted with the categorical findings that the prosecution had failed to establish its case. This judgment was communicated by the appellant to the respondents on 12.2.1987 with a request that he may be reinstated, but respondents, by their letter dated 3.3.1987, rejected the request on the ground that the appellant had already been dismissed from service on the completion of the departmental inquiry which was conducted independently of the criminal case and, therefore, the judgment passed by the Magistrate was of no consequence.
The order of dismissal passed by the respondents was challenged in a departmental appeal which was rejected by the Appellate Authority on 22.7.1987.
It was, at this stage, that the appellant approached the High Court through a Writ Petition under Article 226 of the Constitution challenging the validity of the order of dismissal on various grounds, including that the departmental proceedings based on the same set of facts on which the criminal case was launched against him, ought to have been stayed awaiting the result of the criminal case. It was also pointed out that since the appellant had already been acquitted and the prosecution case against the appellant based on the "raid and recovery" which also constituted the basis of the departmental proceedings, had not been found to be true, he was entitled to be reinstated in service.
The Writ Petition was allowed by a Single Judge of the High Court on 26.9.1995 with the finding that the departmental proceedings and the criminal case being based on the same set of facts, departmental proceedings should have been stayed till the result of the criminal case and since in the criminal case the appellant had already been acquitted and the prosecution case was not found established, the respondents could not legally refuse reinstatement or the consequent back-wages to the appellant. While directing reinstatement of the appellant, the High Court gave liberty to respondents to initiate fresh proceedings against the appellant after perusing the judgment passed in the criminal case.
This judgment was, however, set aside by the Division Bench on 17th September, 1997 in a letters patent appeal filed by the respondents. It is this judgment which is under appeal before us.
Learned counsel for the appellant has contended that the respondents having themselves launched the criminal case were not justified in proceeding with the departmental inquiry which was based on the same set of facts and ought to have stayed those proceedings till the conclusion of the criminal case. Since the basis of action in both the cases, namely, the departmental proceedings and the criminal case, was the raid conducted by the Superintendent of Police at the residence of the appellant from where a recovery was also allegedly made, the departmental proceedings were liable to be stayed as the facts and the evidence in both the proceedings were common. In these circumstances, the appellant, it is contended, was justified in requesting the respondents to stay the departmental proceedings and on the refusal of the respondents to stay the proceedings, the appellant was justified in not participating in those proceedings as his defence was likely to be prejudiced. It is also contended that the appellant was ill and for that reason also the departmental proceedings ought to have been stayed till he had completely recovered. It is also submitted that the appellant who had been placed under suspension was not being paid the Subsistence Allowance with the result that he fell into serious financial difficulties and could not undertake any journey from his home-town in Kerala to Kolar Gold Fields in Karnataka for participating in the departmental proceedings. The Division Bench, it is contended, was not justified in interfering with the judgment passed by the Single Judge who had found it as a positive fact that the departmental proceedings and the criminal case were based on the same set of facts and the evidence in both the cases was common.
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The judgments discuss the labor laws and various regulations that govern public establishments and workplaces. Legislations under the labor laws are often welfare legislation and tend to benefit the employee as well as the employer. Primarily, the question that arises or the dispute relates to the entitlement of the employee to the subsistence allowance payable during the period of suspension and the payment of the arrears of full salary which the employee would have received were they in service.
Hence, these judgments elaborate upon the beneficial aspect of the labor laws and look into different Acts and Regulations and their provisions to the effect of providing subsistence allowance during the suspension, the procedure of dismissal or termination, the procedure of reinstatement, and the amount payable at the time of reinstatement, if any.
An employee who has been suspended is eligible to receive subsistence allowance under applicable labor laws. They may also be entitled to full salary and other intended allowances unless the management believes otherwise and gives an order in writing to this effect including the reasons for the same. An employee who has been wrongly withheld from service or isn’t allowed subsistence allowance needs a labour lawyer to initiate proceedings against the concerned authorities since they are well-versed with the intricacies of labor law. A labor lawyer will help strengthen the case through their expertise which is much needed in such circumstances.
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