Dear Caroline,
My paragraph-wise comments are as below:
Our intention is not at all to blame this person just to get him to compensate for the losses.
I have made clear about verdict of supreme court on recovery of losses from an employee.
Ours is a very small company with few employees and therefore we tend to build kind of personal relations with employees.
Small or big company, it is important to develop professional relationship and not personal one.
Let me explain in detail: this employee of ours was working on a project all alone it being a very small project could be handled easily by one person. Before the project was deployed to the client thorough testing was done by concerned people. Numerous errors were resolved. However, when the client used it, knowing it was our first project did not get irritated rather informed about the problems faced.
Why those problems were not detected before passing your product to your client? Was it failure of testers also?
When this employee was asked to resolve these issues he ended up creating few more problems in the project which did not persist at the time of deployment. When these problems were resolved many more cropped up. We treating him like family did not issue any warning letter as such but kept pushing him to learn from his mistakes and not to repeat them.
Employer-employer relationship is one thing and family relationship is another, why did you mix these two together?
However, this never happened same problems kept occuring. Now the client and ourselves both are quite frustrated with the errors on the project. We do not see the fault of our client at all.
If the same problems kept on recurring then this shows that the employee in question was incapable to take up the work assigned to him.
Our fault probably could be about the extent of trust we had shown in the person. Though it is very clearly written in his appointment letter that the company can recover losses incurred by employees if it desires so.
It appears that you have trusted the employee without verifying or assessing his capabilities. Secondly, what you have mentioned in the appointment letter is illegal.
We have held the last two months salary of this person due to non rather poor performance. Can this salary be confiscated as means of compensation for losses?
Withholding salary is illegal under the provisions of various labour laws in general and under the provisions of Shops and Establishment Act in particular. I mention this act because software companies fall under the purview of this act. If employee commits workplace errors and causes losses to the company then you should conduct the domestic enquiry and if his culpability is established in the enquiry then award him appropriate punishment. Forfeiture of wages is one of the punishments that you can award him. The recovered amount should be deposited in Labour Welfare Fund and you cannot keep it with yourself. That is illegal.
But please remember that supreme court has ruled that if you forfeit wages of worker even then also recovery has to be split in multiple instalments so that worker gets half of his/her take home salary. Recovery of amount should not exceed 50% of the take home salary of any month.
Final comments: - Assessing the case from legal point of view apart let us examine this case from the management theory. This fiasco has happened because of the poor recruitment. The whole episode goes on to explain what caution you should observe while recruiting an employee. While recruiting this employee, what recruitment tests you had conducted? What questions you had asked? Did you ask the questions related to the job competencies of this position? By the way have you identified the job competencies of every position?
But then this is the syndrome of SMEs. All candidates want to work in branded companies. Those who do not get jobs in branded companies end up in turning to SMEs or to the companies who are yet to establish or start ups. SMEs have to put up with these inferior employees and tread ahead. That is what their life and fate is!
I may sound little harsh however, I have tried to analyse the case dispassionately and critically. My comments need not be taken as criticism of your management style as a whole.
Thanks,
Dinesh V Divekar
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