How to Handle a Delayed Termination for Theft: Seeking Advice on Legal and Financial Steps

Dear All,

Greetings!

I have a case to discuss. Mr. X was appointed to a particular department and has been working in the company for the last 15 years. In 2006, two individuals were caught by security stealing company products. The management charged them, and a domestic inquiry was conducted.

Due to certain reasons, the domestic inquiry has been pending for the last three years and is still ongoing. Now, the lawyer has suggested that we terminate the culprits after three years.

I need a termination letter justifying the reasons for the delay, as well as guidance on the full and final settlement, including which heads we need to pay, such as bonuses for a specific financial year and attendance for that period.

Before the suspension three years ago, the individual had a leave balance of 240 days. At that time, we used to encash 210 days, but now we are only encashing 180 days. Please advise on the correct amount to be encashed and whether subsistence allowance needs to be paid.

Your prompt response would be highly appreciated.

Regards,
Ranjeet

Dear Jeeni,

If the charges are not yet "Finally" proved after 3 years, how can you penalize the employee? It is totally against the principle of Natural Justice. I suggest you not to do this.

Dear Jeeni,

I agree fully with Prashanth. When the domestic enquiry is not fully completed, dismissal of an employee is not fair. To dismiss an employee for misconduct, there are only two ways:

a) Either dismiss without any enquiry - discharge simplicitor and later lead the evidence in the court of law if the dismissal is challenged.

b) OR complete the domestic enquiry, obtain the findings where the charges have been proved to a satisfactory level to command the dismissal, then issue a final (second) show cause notice to the charge-sheeted employee asking why he/she should not be dismissed, citing the relevant portions of the enquiry report, and then effect the dismissal quoting that his/her explanation to the show cause is not valid/satisfactory or there are no exonerating factors.

Dismissal during the pendency of an enquiry with substantial delay will be colored and viewed as unfair tactics.

c) Also, clarify on what basis your lawyer is suggesting them to be dismissed. Is he the one who is conducting the domestic enquiry?

Kind regards,

Dayanand L Guddin

HR Advisor, BOBST INDIA

Dear Ranjeet,

You shall be reimbursed for 180 days as approval from the management side has been given at this point in time.

Thank you.

A domestic enquiry is expected to be completed within a reasonable time frame. If it is not done due to non-cooperation of the employee, then the management is on the safe side. Whereas if the enquiry has been delayed due to the management not conducting the enquiry, then there is every chance that the accused may get relief from a higher authority like the Court if he challenges the verdict.

Regarding subsistence allowance, it should have been paid throughout these three years during which he was under suspension. The rate of such allowance should be in your Standing Orders as well. If the subsistence allowance is not paid, then it is another fault on the part of the employer.

Whenever the final settlement of an employee is made, the prevailing policy will always be applied. As such, if leave is encashed, the current policy regarding leave encashment should be followed. However, in this case, since the employee has been under suspension, he may not be bound by the new policy of encashment of only 180 days. I hope that if unpaid salary is to be paid now, the salary due will be the amount owed from three years ago. Similarly, he should be allowed 240 days of leave encashment at the rate which was applicable at that time.

In the termination letter, you need not mention reasons for delay, but before issuing such a letter, it would be advisable to give him a second show-cause notice calling him to show cause "why the findings of the enquiry officer should not be implemented."

Please go through a presentation on Disciplinary Action available on my blog following the link below: [Madhu.T.K](http://madhu-t-k.blogspot.com/)

Regards,
Madhu.T.K

Dear Madhu Sir,

I have no words to show my gratitude to you. For the last 3 years, we have been paying a subsistence allowance to them every month, but the termination has been delayed every time. After the inquiry, the report mentioned that they are culprits and can be terminated. The lawyer who conducted the inquiry is a panel member of our legal experts. The culprits have objected to this.

I would like to request your suggestions on how to deal with this case now. What should we include in the second cause notice?

Regards,
Ranjeet

The objection by the employee should be documented. Therefore, it is better to issue a second show cause notice. If I take the same wordings as given my own presentation (hope you have downloaded it from my blog which is also available in this citehr but as we are not able to find the pages of blogs you may find it difficult to get) the following letter may be sent.

To Date
---------
Sub: Shaw Cause Notice
WHEREAS you were charge sheeted for an offence as stated.
AND WHEREAS you were granted an opportunity to defend the charges by way of Domestic enquiry which commenced on ____ and ended on ___ (dates)
AND WHEREAS you have failed to prove your innocence before the Enquiry Officer.
NOW THEREFORE, the management is constrained to take disciplinary action against you.
Without prejudice and following the Enquiry Officer's report your act of misappropriation has been proved to be a serious misconduct which attracts punishment which may extend to dismissal from service.
THEREFORE, you are hereby called upon to show cause why findings of the Enquiry Officer should not be accepted. A copy of the findings of the Enquiry Officer is enclosed herewith for your perusal.
Your written reply should reach the undersigned within____ days.
Sd/-
Disciplinary Authority/ Appointing Authority
On receipt of the above he will respond that he can not accept the findings. Then you need not rely on that reply but you can send a letter terminating him from service. If it is a discharge you have do do full and final settlement and preparte gratuity note. If he does not turn up to collect the amount you can deposit the amount with the District Labour Officer of your area otherwise you will have to pay interest.

Since he has disagreement he may go to court for redressal. In the hearing you can show all the documents pertaining to the enquiry. Only thing that weakens the management is that you took a long three years to decide an issue. Otherwise everything is believed to be legal and after following principles of natural justice.

You can prepare termination letter as follows:

To Date
--------
Sub: Order of Termination of Service
Ref: Charge sheet No____ dated____
Pursuant to the charge sheet above referred and findings of enquiry report dated____, the management has come to the conclusion that the charges leveled against you have been proved categorically.
As you have been found guilty of serious misconduct, the management has decided to dismiss you from service. However, on compassionate grounds, we have decided to take a lenient step by imposing a lesser punishment by discharging you from service with effect from/ with immediate effect.
You are, therefore, directed to settle your dues including salary dues and handover the charges to Mr________ during office hours on_________
Sd/-
Disciplinary Authority/ Appointing Authority
Regards,

Madhu.T.K

Have you received the findings of the Enquiry Officer? What does the report of the EO state? Has the EO held that the charges leveled against the workman have been proven beyond a shadow of doubt? Do you have Standing Orders in your company? Does it provide for issuing a Show Cause Notice to the workman, asking him to explain in writing why the proposed punishment should not be inflicted upon him?

Further course of action will depend on responses to these basic queries. Where are you located?

In case you need further clarifications, please feel free to call me on my mobile: 09717726667 or contact me via email: vasantnair10@gmail.com.

Best Wishes,
Vasant Nair

Dear Madhu and Nair Sir,

Thank you for your valuable suggestion. Madhu, you are always helpful. I have no words to express my feelings of respect towards you. You are always helpful.

Dear Nair Sir,

Yes, the EO has provided his findings and recommended that we should terminate both culprits. There is also a provision for the same in our standing order. I am located in Delhi and working with a brand name in Hospitality.

Regards,
Ranjeet

REGISTERED AD

Ref : Date :

Mr. ,

S/O Shri ,

Address

You have been working in Deartment of ------------, New Delhi since its inception. During your tenure, recently, numerous complaints of irregularities / misappropriation of funds being committed by staff of Deptt Organisation were received. Following receipt of such persistent complaint management deputed an internal audit team of M/s , headed by Shri ---------- deputed to go into the complaints in detail under supervision of Shri-------. According to the reports submitted by the Audit Team on -----------, serious financial irregularities committed by the staff at various levels were brought to light. According to the finding of the audit team the major irregularities pertaining to loss mainly due to pilferage and theft in ---------- at several outlets and loss from unaccounted items, excess payments due to improper purchase, excess payment to courier company etc. were noticed. The total loss assessed by the team approximately amounts to Rs. Crores in total period of ---------- months. These irregularities have been continuing since the beginning of the Cell and could not be detected by our or whenever brought to your notice, you failed to take proper steps to prevent the continuing loss.

You were, thus, found guilty of complete administrative lapses an allowing such large scaled misappropriation under your nose. Details of such irregularities and losses have been brought to your notice by the

management to which you have already submitted a reply dated ------------. The representation submitted by you has been duly considered and found to be unsatisfactory and rejected.

In view of the above and in view of evidences on record collected by the Investigating Team, you have been, found guilty without any benefit of doubt for such immense loss to the management for your complete apathy and slack supervision. Management has, therefore, constrained to inform you that it has lost faith on you and you are considered to be not a fit person to be retained in service. You are, therefore, hereby, dismissed from the service with immediate effect.

You may visit on any working day to your last place of posting and settle your dues by submitting your ‘No Dues Certificate.'

The EO in his findings can only state whether the charges leveled against the workman have been proved or not. He cannot suggest or recommend that the workman be terminated. This would only vitiate the whole exercise if challenged in court. The decision to take whatever action, based on the findings of the EO or in disregard to the same, rests with the management. For that, you will have to issue a Show Cause Notice, along with a copy of the findings of the EO, and after you receive his explanation, action will be taken against him. It will not be termination; it will be dismissal. Since you are in Delhi, why don't you contact me? I stay and operate from Gurgaon. To give proper advice, one will have to see all the Enquiry records and the findings of the EO, and only then can one decide upon the correct course of action. Best wishes, Vasant Nair 09717726667

Dear Mr. Madhu,
Pardon me but there are gaps in what you have drafted.
Best Wishes,
Vasant Nair