Dinesh Divekar
Business Mentor, Consultant And Trainer
Umakanthan53
Labour Law & Hr Consultant
Riteshmaity
Labour Law Advocate
SAIBHAKTA
Retired From Air India
Pasupathieswaran
Retired H R Professional
+4 Others

Thread Started by #eronie7

Hi
One of my friend has been terminated in her prevoius organisation due to data leakage. She was charged for sending some customer datas to her personal email id and a show cause notice was served on her last working day aftre office hours. She tried to defend herself but a month later after joining a new organisation termination letter is issued to her mentioning breaching company's code of conduct. When she approached the organisation for her gratuity dues of 9years service, she is being denied mentioning inelligible on the grounds of governance termination. Is there any clause in gratuity act wherein no financial mis utilisation happened, gratuity can be forfited.
9th May 2016 From India, Gurgaon
Dear Eronie7,

You have asked advice from the seniors nevertheless, we need little more information. Did your friend work in India? We need to know as Indian labour laws are applicable to companies that have offices in India.

Secondly, the show cause notice was issued to your friend on the last working day and that too after working hours. In that case did the company send her communication stating that her letter of resignation held in abeyance and she has been suspended pending the enquiry?

Employee forfeits the gratuity claim if he/she is terminated. However, termination is a punishment of the highest order. Domestic enquiry should precede before awarding punishment of any kind.However, did her previous company conduct the domestic enquiry on account of breach of security? Any termination should be preceded by the enquiry. This is what principles of natural justice say.

Thirdly, this is beyond the labour laws. What was the performance of your friend or how were her relations with her seniors? Did her seniors were looking for opportunities to show her door and transmission of some information to her personal e-mail ID came handy to them?

There are few questions associated with your post. Please clarify.

Thanks,

Dinesh Divekar


9th May 2016 From India, Bangalore
""Employee forfeits the gratuity claim if he/she is terminated.""

Presuming that your friend was working in India the rule for withholding gratuity is as follows:

The gratuity payable to an employee shall be wholly forfeited:

(i) If the services of such employees have been terminated for his riotous or disorderly conduct or any other act or violence on his part; or

(ii) If the services of such employee have been terminated for any act which constitutes an offence involving moral turpitude provided that such offence is committed by him in the course of his employment.

In order to forfeit gratuity of an employee, there must be termination order containing the charges as established to the effect that the employee was guilty of any of the aforesaid misconducts. In one case, it has been held that in the absence of termination order containing any of the above allegations, the gratuity of an employee cannot be forfeited.

Reference :

Bombay Gas Pu blic Company Ltd. vs. Shri Papa Akbar & others, 1990 (1) CLR 102 (Bom.HC); 1990 LLR 118.

Please check what the termination order quotes about reason for termination?

Secondly did company conduct a domestic enquiry where in she had access to information for defending herself.

As learned member above has already written mor info is required for correct advice.
9th May 2016 From India, Pune
Mr Dinesh Divekar thanks for your reply.my friend's show cause notice was issued after business hours on LWD mentioning that her resignation acceptance was kept on hold. There were couple of mail exchanges for clarification wherein my friend had denied sending any confidential datas to her personal email id except her salary slips. Yes this is in india only, after her final revert on the show cause notice management has conducted internal enquiry of their own and suddenly one day intimated her of termination without any compensation. Company had threatened to take legal course of action in future if desired so. There was no mention of forfeiture of gratuity in her termination letter nor any financial damage caused by her act.
Regards
Ronie S
10th May 2016 From India, Gurgaon
From what you have written it is seen your friend did not have an opportunity to defend herself.
After all if the employee had transferred company data to her a/c some cyber trail would have been seen.
Not giving your friend chance to refute the charge shows lack of natural justice. is bad in law(as can be inferred from what you write)
Take legal advice and complain to Labour officer of the area about denial of gratuity
It appears that the company action of denying gratuity
10th May 2016 From India, Pune
Thanks Dinesh and NATHRAO for your reply. My friend used to work in India only. She was served showcause notice on her LWD after business hours. As far her performance is concerned she got a good performance apprisal and had been a performer throughout her stint in the organisation. She at first request her release earlier through a mail but HR people and her RM requested her to stay for another month and she agreed to do so. Later on when her resignation was accepted, a show cause motice was served on LWD mentioning that her resignation was kept on hold pending enquiry by governance for data leakage. She tried to defend herself through mail exchanges with governance and hr but one fine day she got her termination letter mentioning that she has been terminated without any furthr notice and compensation, and her resignation acceptance is nullified. Enquiery was conducted by the organisation internally amongst themselves and there was no mention of forfiture of her gratuity in the termination letter, nor any financial damage caused to organisation due to her alleged act, also mentioned that company in future might take further course of legal action if desired.
When she approached for her gratuity claim, she was told by hr that she is not elligible but the word forfited was not mentioned.

Regards
Ronie S
10th May 2016 From India, Gurgaon
Dear Ronie,
This is in addition what Mr Nathrao has said in his second post.
That your friend's company did not conduct proper enquiry is different matter. However, for sending the salary slips on one's personal e-mail ID, I doubt whether your company terminated your friend. There is something more than meets the eye.
Assuming that your friend compromised the cyber security, even then also, company should have conducted proper domestic enquiry.
What is the designation of your friend? How many persons reported to her, direct and indirect? We need this information to check whether provisions of Industrial Dispute Act, 1947 can be applied in this case.
As suggested by Mr Nathrao, your friend may approach the Labour Officer (LO) of her area. However, LO involves provided provisions of ID Act, 1947 become applicable. Occasionally they do involve even for higher designations also. However, it depends on the psychology and mood of the LO.
Thanks,
Dinesh Divekar
10th May 2016 From India, Bangalore
#Anonymous
Thanks a lot Dinesh and Nathrao. She used to head a profit center office of an MNC and had 12 direct reportees. She claims that she had only transferred her salary slips to her personal mail id. But what I could see in her termination letter, she has been alleged of sharing confidential customer datas outside official domain. When she spoke to HR regarding not giving her an opportunity to speak to governance team she was told that in such case, as per their company rule team governance doesn't speak and discuss. They had taken the decision of their own without involving her in any discussion except demanding clarification and sending show cause notice through mail.
10th May 2016 From India, Gurgaon
Thanks a lot Dineshji. She used to head a profit center office of an MNC and had 12 direct reportees. She claims that she had only transferred her salary slips to her personal mail id. But what I could see in her termination letter, she has been alleged of sharing confidential customer datas outside official domain. When she spoke to HR regarding not giving her an opportunity to speak to governance team she was told that in such case, as per their company rule team governance doesn't speak and discuss. They had taken the decision of their own without involving her in any discussion except demanding clarification and sending show cause notice through mail.
10th May 2016 From India, Gurgaon
Dear Ronie,

I would like to state the following:

a) Unless company has material evidence of the breach of security, they will never take this drastic step of termination. Process of termination could be unlawful, nevertheless, they must have some incontrovertible or irrefutable evidence. Company may terminate an employee even without conducting domestic enquiry. However, if employee approaches the court then it becomes company's responsibility to justify the termination without conducting domestic enquiry. In your friend's case the circumstances were not compelling to give short shrift to a process of law. However, this is a different matter altogether.

b) Your friend might have withheld some information from you. We do not know whether she has shared with you the entire information.

c) Whether your friend has breached security or not she may send the lawyer's notice for her illegal termination. If company does not relent or even respond then she may file a suit for illegal termination. However, this will be a civil suit and civil suits drag on for years together. Therefore, it could be a decade long legal battle. Is she prepared for that?

d) Breaches of security during notice periods are common. Therefore, those who are under notice period are kept under special surveillance. After spending nine years in the organisation how come your friend did not know this?

e) Did the company issue her "Relieving-cum-Experience Letter"? If yes, then what remarks have they put for "Reasons for Separation"? If there are negative remarks then per force she has to approach the lawyer. However, if the experience letter is neutral then she might forego gratuity and move on.

Thanks,

Dinesh Divekar
10th May 2016 From India, Bangalore
Dear Eronie7,

There is no need for the organization to wait for "Financial Misutilization" in case of such data leakage incidences. Termination can still be on account of 'breaching company's code of conduct'.

Your friend has worked for 9 years for that organization. She must be aware of policies in this regards by the organization. What position did she hold? The higher the position, more is the moral responsibility towards organization. In such case, the dismissals are also more discrete & abrupt.
Even though the show cause notice was served on her last working day 'after office hours', it does not matter much, as it must be still 'last work day' dated letter.

If the termination letter was issued a month later, then why there was 'her last working day' before? Had she already resigned when the show cause notice was issued? In such case, the question would be, if the termination was biased after her resignation, or if it held valid proofs? Did she answer the show cause notice within a month through a written letter to company?

& Most importantly, is it true that she had mailed some company data to her personal ID "on/near her last working day"?

I understand this is not a domestic enquire, but just an anonymous blog entry, & there is no compulsion on answering above question. Though, when she is seeking legal advice, in order to check legality of other party's actions, she has to be also conscious on the legal validity of her own actions.

Last working day is quite emotional period for anyone, especially with long association like 9 years. Some mistakes may happen due to false sense of ownership. But it is we employees who try to bring professionalism in our HR by constant expectations, so if the personal touch is lost & such rules are strictly followed by HR, then we should be ready to accept it as well...

Best Regards,
Amod.
11th May 2016
IT employee is a ‘workman,’ says court
print · T T
inShare
Sets aside dismissal of a senior programmer and orders his reinstatement

Maintaining that a person working in an Information Technology company can be termed a “workman”, a court here on Tuesday set aside the dismissal of an employee stating that it was unlawful.

Additional Labour Court Presiding Officer S. Nambirajan also directed the firm to reinstate the petitioner with continuity of service and to pay full back wages and all other benefits from the date of dismissal to the date of reinstatement.

The order was given on an industrial dispute plea filed by K Ramesha, who was dismissed as Senior Service Programmer while working in HCL Technologies Limited, seeking to set aside his dismissal.

“It cannot be denied that the job of an engineer in a software company involves skills and technical knowledge. Therefore it can be concluded that the job of a software engineer can be termed as the skilled or technical one,” the court said.

The management contented that Mr. Ramesha was a supervisor and therefore exempted from the definition of the term “workman”.

“Any person doing a skilled job is a workman under the definition of that term. So I conclude that the petitioner is a workman,” the judge said.

On January 22, 2013 the firm terminated his service on the ground that his performance was not satisfactory without explanation. .

“The firm has not produced any evidence to show that failure to improve performance would amount to an act of misconduct,” the court said. — PTI
11th May 2016 From India, Chennai
Dear Pasupathi,
Citing case law on termination of employee on the grounds of under-performance is out of context. Termination because of security breach and under-performance, both are unrelated to each other.
Thanks,
Dinesh Divekar
11th May 2016 From India, Bangalore
Dear Pasupathi sir,
By mentioning about the news do you mean to say that the employee in this case can also be termed as a workmen and she can challenge the company in court since the company have not followed a proper domestic inquiry and have denied her gratuity.
Please correct me sir if I made mistake in understanding your point since I am new to HR field.
Thanks and Regards.
Gokul
11th May 2016 From India, Mumbai
Dear Amod
She had already resigned and was serving notice perioed. Infact she had handed over all her office equipments like laptop and other items which were in her custody and got attestation of her Reporting Manager in exit form. 1st show cause notice was served on her last working day after business hour mentioning that her accepted resignation is on hold.
Regards
Ronie S
11th May 2016 From India, Gurgaon
Dear Eronie ,
The ground for termination may be debatable.Your friend may or may not have transferred confidential data to her mail a/c.It appears that you yourself and obviously we at Cite HR are not sure about it.However what struck me as odd is that there is no mention in termination letter about denial of gratuity and reasons thereof.It appears that management is not sure whether they can actually deny gratuity benefit and justify it in court of law if required.Their threat to take legal action in future may be a tactic to stop her from going to court by scaring her off !
11th May 2016 From India, New Delhi
30th Sep'15 was her LWD and show cause notice was served at 6.45pm on the very same day whereas office business hours ends at 5.30pm. Her termination letter was dated 6th nov'15 and mentioned effective date of termination as 30th sep'15 which originally was her LWD.
Regards
Ronie S
11th May 2016 From India, Gurgaon
Dear Eronie,
Adding on to Mr. Nath information, First of all - How can you conclude it was her last working day without proper resignation. Show cause notice is served to an employee to explain the reason in 48 hrs and then the termination order to be served if found guilty upon enquiry. Proper documentation to be made to terminate an employee and not on fictitious grounds. Gratuity can never ever be fortfeited since it is under the purview of statutory and the employee can go to court of law. IF the company has any monetary loss it has to have a proven evidence. I suggest let the employee file a case through an advocate for explanation and if not go to the labour court.
11th May 2016 From India, Chennai
Dear Sathish Her resignation was already accepted by Reporting Manager and was serving notice period. Show cause was served in her LWD only after business hours. Regards Eronie
11th May 2016 From India, Gurgaon
Forfeiture of gratuity is allowed only when the service of the employee is terminated.
For the purpose of termination of service, show cause notice is to be issued followed by conducting a domestic enquiry giving employee opportunity on the basis of principle of natural justice and then terminating the service.
If the service is not terminated following the method then such termination becomes illegal and on the basis of such illegal termination gratuity cannot be forfeited.
It is better to claim gratuity now FORM I before then employer and if not paid then proceed with FORM N before the Controlling Authority.
Please check www.labourlawhub.com for more information.
11th May 2016 From India, Kolkata
Dear Ritesh
As I mentioned in trail, she was served a show cause notice on her last working day after business hours. She had a couple of mail exchanges after the 1st show cause notice wherein she had denied transferring any confidential customer data. But there was no sort of discussion physically nor over phone with management and her. After her last revert to the show cause notice there was no news for couple of days and suddenly one fine day they had forwarded a mail informing her termination without any compensation.
Regards
Ronie
17th May 2016 From India, Gurgaon
@Eronie7 -
She has been given show cause and there was no enquiry held but was terminated from service. If the termination letter mentions such misconducts then obviously such termination will be bad in law. She can challenge such illegal termination and can claim reinstatement with full back wages. Please consult a lawyer with all documents at the earliest.
My labour law blog: www.labourlawhub.com
18th May 2016 From India, Kolkata
Here the ultimate question is that whether gratuity of the employee can be forfeited by the employer the way he likes. No is the answer with reference to the provisions of forfeiture of gratuity laid down in S.4(6) of the PG Act,1972.
First, this is a case of accepted resignation subsequently kept on hold on the last working day of the notice period that too after her relief. In such a situation, the management ought to have continued her services by placing her under suspension or calling back to work after rescinding her relief based on the resignation.
Second, the order of termination was issued on a later date taking effect from an earlier date. Termination can not take place with retrospective effect but from the date of issue of such orders only.
Third, for argument-sake, if the termination is accepted as a proper one, forfeiture of gratuity demands a simultaneous formal notice u/s 4(6) and not a mere informal intimation that too following a claim from the employee.
Fourth and final, gratuity being a statutory right of the employee, even in case of dismissal it can be forfeited only to the extent prescribed in cl (a) or (b) of S.4(6) of the Act that too depending on the gravity of the proven misconduct only.
Therefore, the employee has a valid claim for gratuity against the employer together with interest and she can approach the Controlling Authority under the Act as suggested by Mr.Ritesh.
24th January 2018 From India, Salem
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