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The Coffee Break Guide to Compliance – Vol. 21

Posted by: on 15 November 2018 in Business Strategies, HR, Human Capital Management, Payroll, Talent Management

This post is part of the Coffee Break Guide to Compliance by Anandan Subramaniam. Please subscribe to the blog updates if you’d like to be notified of these posts. Please comment below with your doubts and queries.

The Coffee Break Guide to Compliance – Vol. 21 {Misconduct During Employment and the Process for Termination}

Any workman of an establishment is protected by The Industrial Disputes Act, 1947 and The Maternity Benefit Act, 1961, against wrongful separation.

Section 2A of The Industrial Disputes Act, 1947 (ID Act) states that “where any employer discharges, dismisses, retrenches or otherwise terminates the services of an individual workman, any dispute or difference between that workman and his employer connected with, or arising out of, such discharge, dismissal, retrenchment or termination shall be deemed to be an industrial dispute notwithstanding that no other workman nor any union of workmen is a party to the dispute.”

Section 12 (1) of The Maternity Benefit Act, 1961 protects the woman employee stating, “when a woman absents herself from work in accordance with the provisions of this Act, it shall be unlawful for her employer to discharge or dismiss her during or on account of such absence or to give notice of discharge or dismissal on such a day that the notice will expire during such absence, or to vary to her disadvantage any of the conditions of her service.”

The term ‘workman,’ as has been defined under the Industrial Disputes Act, 1947, would inter-alia mean all persons employed in any industry, but does not include an employee who is in a managerial, administrative or supervisory role. The definition of workman is established through various judgments, depending upon the nature of work being carried out by an employee. An employee who is considered to be a workman will be governed by the ID Act, and their termination of service will have to be in accordance with the provisions of the ID Act.

The Employer cannot terminate an employee for misconduct in the name of Retrenchment. Severance of employment of an employee for a misconduct in an establishment is to be carried out through a process. The Employer of such establishment is required to conduct disciplinary proceedings, which constitutes setting up enquiry panel, serving show cause notice and giving reasonable opportunity for the employee to prove his/ her point. The entire process and proceedings should be fair, keeping the principles of natural justice in mind.

The Three Most Important Factors to Consider before Terminating an Employee for Misconduct

  1. There shall be a justifiable reason to believe that the Employee was engaged in a serious misconduct.
  2. There shall be a justifiable reason in not giving access to workplace for such an Employee.
  3. The Employee shall be given ample opportunity to defend himself/ herself before any final decision is taken.

The Process of Terminating an Employee for Misconduct

  1. Preliminary enquiry / investigation
  2. Issue show cause notice / charge sheet
  3. Conducting Domestic enquiry
  4. Review of results by Management
  5. Charges either dismissed (or) considered for punishment
  6. Decision
  7. Appeal by employee in case of punishment
  8. Effect punishment if not stayed
  9. Withdraw punishment if appeal is successful

Purpose of a Charge Sheet (Show Cause Notice)

Why have a charge sheet?

  • No action can be taken against any employee without it.
  • To give an opportunity to the accused to defend themselves against the charges, as per the principal of natural justice

Who can issue a charge sheet?

  • A person competent to appoint or dismiss employees

When is a charge sheet issued?

  • Upon prima-facie indiscipline found against an individual Employee

Where should you issue a charge sheet and where should you have the enquiry?

  • Issue the charge sheet to the registered postal address in writing. Conduct the enquired in the office.

How is a charge sheet issued?

  • A detailed list – Legal, Ethical and Transparent details – of charges
  • Charges should be specific, accurate, detailed (date/time/place), unambiguous
  • In reference to Standing Order (Certified or Model Standing Order)
  • Mention on document reliance
  • Do not mention proposed punishment

If an employee is wrongfully terminated or separated by not following the due process, it may lead to a number of legal and/ or reputational risks to the employer.


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