Legal positions will vary based on actual facts
A: If there is a criminal act inside the premises, two parallel actions may be taken.
1. Charge sheet and disciplinary action by the Management
2. Based on the complaint lodged by the affected party, police might file a FIR and initiate criminal action
A person may be acquitted in the Police Action however the law does not say that the Mangement's action should be based on Police Case. SC has held that that the Enquiry Officer is not guided by Indian Evidence Act and hence his finding need not not be dependant on the Criminal Court's findings
B: If there is a criminal act outside the factory premises in connction with employment,
If there is a provision in the Standing Order. similar rule will be applicable.
C; If the criminal proceeding is not connected with employment but was committed outside the premises
If the Police files FIR and registers a case, the employee can be suspended pending enquiry. The option is employer's. But the employee will be paid Sub.Allowance for the period. If he is found guilty, then he can be terminated by quoting the same . Follow procedure as prescribed in Certified SO or Model SO whichever is applicable. If he goes on appeal, then you need to wait for the veridct. However, there is no need to pay Sub Allowance. If he is acquitted from the charges, the employee will be treated as though he was on duty from the day of suspension and he need to be paid full wages after adjusting the Sub Allowance paid.
If you can give actual facts of the case, we can give our views
Sivasankaran