Fired for a Costly Mistake: How Should HR Handle This Reimbursement Error?

Friends,

One of my friends has recently been fired from his job (from a Ltd company) due to his mistake in processing conveyance reimbursement checks for 5 employees twice by error (total loss to the company was around Rs. 20,000). Unfortunately, nobody disclosed that they received double reimbursements. He realized his mistake and honestly informed his HOD. Although the amount can be recovered from the 5 employees who received double checks, his boss became angry and deemed it an unavoidable and significant error, resulting in his termination.

He needs advice from me and all of us HR professionals. Please share your advice and opinion on this case to help him receive justice.

Is there any clause mentioned in his Appointment Letter? Usually, such actions are taken if an employee engages in corruption.

With Regards,
Vineet Deshmukh

Clarifying the Situation

In fact, this is not a case of corruption; it is a case of a mistake. Such mistakes are typically found in the finance departments of many companies, involving data manipulations, typographical errors, etc.

If he were corrupt, he would not have been honest and informed his Head of Department (HOD) that he made a mistake. However, he did not receive the appropriate reward for his honesty.

Please advise.

Dear rdave86,

Your friend did not keep the money for himself, and it's a mistake, though big, but not corruption or deliberate misconduct.

Secondly, people who got credited money twice should come forward and accept their mistake. They were not given any show cause notice for this mistake.

I think your friend can talk to the HR person there and offer his written apology. What happened to the money? Perhaps they might have recovered it from those 5 employees. If it is not recoverable from those persons, your friend can offer to have it deducted from his salary.

Many times in banks, if an employee mistakenly credits more money to an individual, it is recoverable from the receiver only. Nowadays, banks have excellent tracking systems. If it's not traceable or not recoverable, then the deduction comes from the employee's salary.

I think the company is totally in the wrong. Let some senior reply on your case and then ask your friend to follow up.

Regards,
Meetu Singh

Dear rdave86, as per your thread, he is not corrupted. Is there any clause mentioned in his appointment letter regarding a lack of attention to his duties and any penalty? If not, such a practice is unethical. Has there been any Show Cause Notice received from the Management?

With Regards,
Vineet Deshmukh

Yes, it has a clause in his appointment letter that the company reserves the right to terminate any employee on an immediate basis without giving any reasons and rewards for his misconduct, indiscipline, or severe acts which affect the company's business or reputation.

He was asked to provide justification for this mistake in writing, and he has given a description in writing. However, just by entering the clause, the company cannot terminate somebody for such a mistake which can be resolved in different ways. Don’t you think that the company is safeguarding itself by having such clauses in the appointment letters?

Please comment.

I want to also know if the company has put such a clause in the appointment letter and gets it signed by employees, does it really reserve such rights? The company may put many clauses that are against the laws, but employees agree and sign for the job.

Legal Control Over Appointment Letters

Is there any governmental or legal control over furnishing appointment letters and including clauses, or is any company independent to include clauses as per its comfort? Is there any law for it or not? Please revert if you have any such idea because I really want to help and give justice to that guy. His other HR colleagues are not ready to support as the company's head has made the decision.

If there is such a clause, then the employer is on the safe side, and the employee has no right to file a case against the management decision.

With regards,
Vineet Deshmukh

Company Clauses and Employee Rights

I want to know if a company includes a clause in the appointment letter and gets it signed by employees, does it truly reserve such rights? The company may include many clauses that are against the law, but employees agree and sign for the job. Can a company create any clause as per its comfort and act as it likes? Isn't this exploitation? Is there no legal control over it?

Regards