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In this case, the Court upheld the Labour Court's interpretation that service charge was payable to suspended employees.
The Calcutta High Court recently upheld a Labour Court ruling which found that service charges were payable to the litigant employees under suspension as a part of their subsistence allowance. (The Peerless Inn v. First Labour Court & Ors.)
Recalling Justice Krishna Iyer's cautionary note that "Law may be guilty of double injustice when it is too late and too costly" particularly when it comes to labour disputes, the Calcutta High Court also remarked,
The dispute concerned the interpretation of Clause 5 of a settlement agreement between a hotel (the petitioner) and its employees. This Clause spelt out that service charges collected on Food and Beverage sales would be distributed among all the employees and the managerial personnel connected with the hotel functioning.
The question was whether this meant that suspended hotel employees were also eligible to be given a share of these service charges under the agreement. The Labour Court ruled that suspended employees were also entitled to these service charges. The ruling was challenged before the Calcutta High Court by the hotel.