How Should We Handle Staff Resignations Following a Misconduct Dismissal?

Dear all,

My company recently dismissed a Head of Department for gross misconduct, including forgery. The dismissal was supported by forensic evidence, following a panel inquiry, and with the staff admitting to the deed. Four of his subordinates were also found guilty but were let off with both verbal and written warnings.

He has since left the company and joined a competitor. Since his departure, his ex-team members have been resigning one after the other to join him. More resignations are expected, and this will certainly impact business continuity.

I would like to seek advice on how my company should urgently address these issues.

Thanks in advance.

Autumn Jane

Dear Miss Jane,

You surely cannot stop an employee from leaving your company, but you can certainly avoid such a situation in the future by tightening your recruitment process and bringing in more genuine people to your organization. Anyway, don't worry about such employees leaving your organization. There is no dearth of good and efficient people in the market.

Regards

Thank you for your response. My superior has asked me to send a letter to our competitor to expose them. I am unsure whether this is considered unprofessional or unethical, or if it is an action expected of a responsible employer.

Dear Ms. Jane,

Never resort to such kinds of acts that are immoral or unethical. These actions will not only tarnish the image of the organization, but your own image will also be under scrutiny. Forget about those employees as they are no longer part of your company. Look towards the future.

Regards

I agree with my colleague's opinion. There is no dearth of skill in India.
You should be careful in the future while hiring new employees.
B. Dakshina Murty

Dear Jane,

Are you sure about the cause of the misconduct committed by him and the team? Was the illegitimate deed committed out of some legitimate reason, compelling circumstances?

Why did the team members resign from your company and follow the 'tainted' leader (ex-HOD) to join him?

And you say more resignations are expected! Could it be possible that he is a hero or a victim?

Regards.

Hi,

It seems the employee who has been terminated from your organization is a very good team leader and a motivator as well. As you said, more resignations are expected, which means he has a very good hold and command over his ex-colleagues. The best you can do is to come up with some retention practices and motivate them by explaining the career growth in your organization, company strength, market share, and the benefits for your employees.

When recruiting senior-level employees, you can have an agreement with them not to join an immediate competitor for a certain period.

Hope you are fully recharged to confront this situation.

All the best.

ajaypadnekar@nestorsourcing.com

Dear All,

First and foremost, this HOD is not a new hire. He has been with the company for 28 years as an Inspector and was only promoted to HOD two years back during a restructuring. Most of his subordinates have an average tenure of 5 years. While I agree that we need to strengthen the recruitment and selection process as suggested by all, I also see the issue being related to both our promotion and training and development policies and procedures. We have promoted a good technical staff into a people management role without providing him the necessary training to become an effective manager. While I have already strengthened these two aspects, I personally think that the company has failed him.

The above aside, his gross misconduct included:
1. Falsification of processes, tampered records, and forged signatures relating to monetary matters;
2. Unlawful disclosure of company confidential information;
3. Fabrication of company information; and
4. Unethical instigation to create business discontinuity.

Raj is totally right to say that he was the "hero" and "victim." He was a "hero" because he amended his subordinate's overtime claims by inflating the overtime hours so that his team can get more money. He was a "victim" because he got axed by the company while trying to provide more for his team. His team is found guilty as they allowed him to forge their signatures on the overtime claim form. Because of the favor he has done for them, they willingly followed him.

While the whole team is found guilty, the HOD is the only one that got dismissed as he has abused his position as an HOD and breached the trust placed upon him. He is held fully accountable for his actions. The rest of the team was given both verbal and written warnings due to business continuity reasons - we can't dismiss all as it will leave a vacuum in that business line.

The company has decided against handing him over to the police as it is never the company's intention to destroy his future livelihood and were hoping that he has learned his lesson. But obviously, he did not and started this poaching.

My boss is serious about sending the letter to the competitor. While I have explained to him the pros and cons of this action, he is determined to do so. As such, I have suggested to him that the letter should then be issued from the lawyer's office so as to build a stronger case if there is an injunction.

Appreciate comments from all seniors, please.

Best regards,
Autumn Jane

Hi Autumn,

This is common in most organizations.

You may not be able to stop people from resigning. What's the point in doing so?

See what difference there is in working for the competitor company and your company. Do they have better policies? Are their policies more relaxed? Does their compensation structure help their employees have the potential of earning much better? Do they have a better working culture? Do they provide more facilities for employees that help them perform better?

Maybe if your employer is better than them in most of the factors that are a huge consideration for prospective candidates and your current employees, then you need not worry about such factors.

It's not just enough to have all these and put them on paper; you need to implement the same and also let your employees know "what a great place they are working in."

And I don't think it will do good if team members who were so used to his "wrong ways" are still continuing there. They may spread a lot of negativity...

Good luck!

(What would you do if all good performers of your competitor company decide to join your group, and you just have the positions vacant for their posts? Wouldn't you be happy? Wouldn't you think the HR at the competitor's end is just too silly if he/she tries to stop such things by introducing new rules or by sending any letter to you?) Think. :-)

Hi, what is important is ethical behavior on the part of the dismissed employee. However, if the guys under are moving, then look at what is prompting this move. Are they hand in glove with him during his action of commission and omission? In such a scenario, talk to the remaining entire team. Give them a general pardon (difficult). Have a cut-off period for their misdemeanors. Bring an in-house guy with good character and experience, build a team around him. Good riddance for the guys who are quitting. They may be creepers who are not confident of working on their own and need a stick to lean on.

The best thing for the company is to move on. Survey the mess, take control of the situation. Talk to your customers and ensure they are not poached (that is critical). Let your management circulate to these companies the action of the fired guy and warn them of the consequences for dealing with him.

It's not a bad time to start afresh. If possible, bring back former employees who quit because they could not work with the sacked guy. Give these guys good positions, pay, and responsibility. It may work as these guys would like to prove their worth.

I have shifted jobs three times in the last four years. As a matter of principle, I did not go to a competitor as I felt it was a bit unethical.

Hope for the best. Tough times last, but tough people don't.

Ramesh

Dear Autumn,

It is amazing to know that, "He has been with the company for 28 years.".

Considering he was "an Inspector and was only promoted to HOD two years back during a restructuring", you have rightly arrived at "we have promoted a good technical staff into a people management role without providing him the necessary training to become an effective manager.".

It is good that you "have already strengthened these two aspects" - recruitment and selection; training and development.

And your observation, "I personally think that the company has failed him." displays your maturity in understanding people.

Organizations, like people, learn from their mistakes.

Understanding people's motives and irrational behaviors at work is a complex issue.

About the corrective steps:

Under the circumstances, you have been left with no option but to retaliate appropriately.

A letter through a lawyer is an excellent solution, in case there is enough legal substance in the employment agreement of these employees.

Beefing up the concerned department immediately.

Anticipate and look for other trouble spots.

Regards.

Dear Jane,

I completely agree with Raj, and I do not think the cause is management failing the employee here. The cause you have highlighted is gross ethical misconduct. Such issues are not caused by poor training or developmental inputs (although they can be corrected through expert individual coaching). I am sure he must have been involved in similar acts earlier that somehow escaped attention.

Apart from taking action as advised by Raj, it may not be a bad idea to look at his team members and ask people who have been involved with him to go as well. By the way of approval, they have demonstrated the same ethical behavior as the HOD (I don't wish to call him a leader). You might be preempting these separations (as you have said that you are expecting some more resignations). Such an action will send a strong message and possibly stop some in their tracks.

Hi all,

It was nice to see many people giving different suggestions. Some are even talking about going legal against him. But Jane, what I would suggest is that what that person did was very normal, and many people follow this practice. Giving benefits to employees and leaking information, not only intentionally but also because of casual behavior as well.

The need of the time is a strong leader with a proven track record and a person who can instill confidence in the team that they can grow if they perform better at your organization. The habit they were carrying of getting extra benefits will just bring them short-term gains. In case they want to be truly successful, they just need to work hard, earn good promotions, and look for long-term benefits. Everything will be okay; some resignations don't mean all will resign. Have faith in your team.

Dear Ms. Jane,

Don't worry about the staff and others who were left with him. If you know any team members currently in your organization, and if you identify that someone is helping the ex-team leader in the competitor's organization, be cautious with the staff. HR has to support the organization to safeguard it from the competitor concerning business processes.

Identify a capable team member and give him/her more responsibility. This individual will help in building an excellent team and enhancing the business.

With regards,

IRUNGOVEL

Hi,

As such, there is no law that exists in India under which you can retain an employee. Even otherwise, you can't stop an employee from joining anywhere. Although the Hon'ble Supreme Court, in some cases, held that restrictions imposed by the employer not to join his competitor or the industry engaged in the same kind of business/activity are maintained only for a short period, like one or two to three months, but totally putting restrictions is not tenable in the eye of the law. Our constitution provides for the professing of any trade and business of an individual's own choice. Also, as per Section 27 of the Indian Contract Act, an agreement which restrains trade is void.

I would further like to clarify that although you have the right to file a civil suit for a permanent injunction, it is very difficult to prove in such a case. Therefore, you will not succeed in it. So, I advise not to initiate any legal proceedings. Yes, you can send a letter/notice through a lawyer; it may be somewhat effective.

Sanjay
Advocate

Hi Jane,

You should be happy that all the black sheep are getting out on their own. Good riddance, isn't it? I would not worry about this kind of poaching or attrition, whatever you may call it. Instead, I would concentrate on inducting good replacements. Sending advisories to the new employer of your ex and terminated employee will certainly not be good. He might badmouth your organization to save himself. Let his new employer find out for themselves about him. After all, it is their responsibility to ascertain the employee's past record and antecedents.

Best,
Jai

Autumn, if I may:

There is an old saying that the apple does not fall far from the tree. It sounds like this department is all of one seed. The best step is to clean house and restructure.

In the world of business, integrity is key for a long life. Take time to sharpen up your company's interviewing skills, reference checking procedures, and evaluation systems.

This too shall pass. Be well.

Dr. Marc

PS 63:7

I totally agree with Ajay. The best way to avoid employees leaving and joining competitors is to put a clause in the appointment letter that for at least 3 years from the date of resignation, the candidate cannot join any competitor.

Regards,

Kalyani Suri

Dear All,

If I could have my way, anyone who is in cahoots with the ex-HOD would have to go. However, my big boss is a very soft-hearted person. The wrongdoings of this HOD were discovered a year ago. Both the big boss and his GM "mentored" and "counseled" him for over 6 months. They only decided to dismiss him after a major client called my big boss to confirm whether the rumors he heard were true or false.

Before posting on this site, I had already strengthened all the policies and procedures. An audit team was also formed for that purpose. Most of the corrective steps recommended here have already been implemented and enforced.

I want to thank everyone for being so supportive and providing objective opinions. I believe regarding this issue, I know how to proceed from here.

However, I have encountered a new problem, and I will post a new thread for further discussion.

All the best! Autumn Jane

Hi A.J,

Before winding up the discussion, I have an additional suggestion. It is nice that you have now strengthened your mind as to what to do and will go ahead. At the same time, since such a good thing has happened, with you being there in the company and making such a considered decision before acting, you should also concentrate on the other personnel in your company who have risen to higher echelons in your industry more out of position than performance, qualification, or merit. Train people to think in a common manner for the betterment of the company and themselves. They should all make the aim and objective of the company their own, and each should be a tool to prevent others from deviating from such thoughts and actions.

This training is most important in an organization where the owners, though in business, sometimes make decisions from the heart rather than the head. Your role is crucial in educating the workforce on the dos and don'ts, while also enforcing upon the management the practice of being fair and firm. This is crucial to prevent future mishaps due to mediocre management practices. It is a positive sign that people are promoted from within the ranks. However, taking an unskilled/uneducated employee to a professional position should be done after proper training in the lacking skills. Prevention for the future should be adopted while corrections for the past are being made.

Think it over.

All the best,

Dear Kalyani,

Kindly think again before you write. A great quality of an HR person is empathy. Put yourself in others' shoes: Would you be happy if you were asked to sign such an agreement?

If you are a TV News Anchor, and tomorrow you leave the company (or you are asked to leave the company), you cannot join any TV channel for the next three years. If someone has a niche talent or profession, then they will only join the same industry, right? That means they have to join a competitor. Would you be happy if you were asked to STARVE YOURSELF AND YOUR DEPENDENT FAMILY MEMBERS FOR THREE LONG YEARS? I don't wish this to be true, but what you have written comes across as MOST INHUMAN. Why don't you put a life-long moratorium and see whole families die? I do not wish to think whether this trait of yours is inherited or acquired by training within the family and institutions.

Regards.

"I totally agree with Ajay. The best way to avoid employees leaving and joining competitors is to put in a clause in the appointment letter that for at least 3 years from the date of resignation, the candidate cannot join any competitor.

Regards,
Kalyani Suri"

Perhaps your company underestimated how valued a leader this terminated employee was? Maybe your company is getting a reputation for not treating people fairly?

At our company, our management employment contracts state that we agree not to hire away any company employees for a period of 1 year after our employment is terminated. Could this situation at your company have been handled any differently so that the outcome would have been perceived to be fairer? In the end, we all get the employees that we deserve.

Hi,

I would suggest giving new employment contracts with a bit of revision in salary, plus including a non-compete clause in the revised employment contract. This would most probably solve the problem.

Dear Redstormshadow and Lizancy,

This company has a 40-year history but never had a proper HR until 1 year ago. HR was then handled by a very long-tenured Senior Manager who, at most, is responsible for issuing Letters of Acceptance for new hires. The LOA is just a piece of document that states salary, working hours, and benefits provided. That's all! These have changed with the many HR initiatives implemented over the 1 year, including an Employee Handbook, HR SOPs, Workflow charts, PMS, Grade & Salary Structure, and improved communications between staff and management. The reorganization I mentioned earlier is a huge project to structure a non-profit association into a profit company. Because there is a change in business operation status, all employees were issued a new LOA with new terms & conditions - including better salary and benefits aligned to the private sector. The non-compete clause is inclusive in the new LOA but only if you are in a Management role.

The 1 year for management is understandable - these staff have access to privileged information about the company. The rest of the staff are not subject to this clause because, with their skill sets, they can only work within the same industry, and they need to quickly bring back the bread and butter to their family (as rightly pointed out by Raj).

My 1-year experience here has been "jaw-dropping." To the behavior of these employees, all I can say is "give one inch, they want a yard"!

Autumn Jane

Dear All,
After reading the whole stretch of comments and advices to Ms. Jane's situation I would like to share few points related to this matter. First of all, this HOD which was dismissed surely does have good influencing power to those staff that have resigned or better said that have joined the competitor company (should they fall in). First of all, when an employee is dismissed especially in management level, it should have been communicated accordingly to the staffs. Transparency with some limitation is good to prevent grapevine which the staff might have believed to hoax and having misleading opinions on the management.
Mangales Krishnan
Kuala Lumpur, Malaysia