Can a Company Withhold Benefits or Penalize an Employee After Resignation Due to Errors?

The person in question has been well-decorated in his company and has even recently received an increment. However, in a retrospective audit, it was found that he might not have fully done justice to his role. As a team leader, he says he could not perform well due to a lack of resources and limited personal skills. Nevertheless, he acknowledges his error in judgment and submits his resignation citing personal grounds.

Can the Company Act Vindictively?

Can the company suddenly act vindictively and withhold his FnF, Gratuity, or dismiss him? Can the company impose financial penalties on him for this error?

Request urgent advice.

I believe the company is mistaken in not differentiating between 'willful mistake/wrong-doing' and 'judgment error'. However, it may be premature or incorrect to draw a final conclusion without the details of the situation or case—since much depends on "WHAT" consequences arose due to this situation and also the hierarchy of the individual. Please provide the full details so that the members can offer their 'well-informed' opinions.

Regards,
TS

Dear Executor,

If the employee has done it unknowingly, it's normal. It's human tendency to make errors. After all, nobody is 100% perfect and everybody makes mistakes.

But, in case the employee has behaved ambitiously with a lot of intentions, you can definitely penalize him.

Regards,
Bharghavi

Situation of a Senior Manager Facing Blame

The person in question is a senior manager with the firm, handling a slew of projects. Due to the management not providing the necessary personnel, the team has not been able to do justice to the projects. He has fought with the management multiple times on this account. Now that the clients have taken action, the company is blaming him for the same—he's become the fall guy. The company has a history of being vindictive, even towards juniors who leave.

This question is from the harassed individual's point of view. He has had enough and wants to quit. However, the company's history has him scared. What should he do? What risks is he running?

Regards,

This is done routinely by many companies. A sincere, hard-working person is victimized. He is made the fall guy, scapegoat, or the target of a witch-hunt. This is to save the skin of others. To put the maximum possible blame on him or to punish him the most would absolve all others of their part in everything—this seems to be the idea behind it. The best possible alternative is to counsel the person, explain that this is how life moves, and make him ready and prepared to take on another assignment... and life moves on. More than any technical solution to his problem, this person needs moral support and guidance.

Warm regards.

I completely agree with Mr. Rajkumar. As of right now, he is not working with you, and the blame game has started to shift the responsibility for mistakes from one person's head to another for selfish motives. You need a scapegoat, and you've found one.

Regards,
Bharghavi

I get a 'feeling' that the person in the posting COULD be YOU—anyway, that wouldn't affect/influence the suggestion(s) of the members.

Options for the Person in Question

First and foremost, suggest to him to have all the discussions/decisions taken along the way from now on IN WRITING. I know it's tough to do it without raising suspicions among the management. One way—that worked out well for me in the past—is this: After a verbal/oral discussion/meeting where any decision(s) is/are taken—especially if this person gets a feeling that something CAN go wrong—suggest to him to send a formal/innocuous email to those who attended the meeting. It could be in the garb of Minutes of Meeting or just a Summary of what was discussed. The logic/reason for such a step is two-fold:

1. To put things in writing and safeguard himself for any later unpleasant situations.
2. To ensure that all the participants are on the same page—this would be the positive aspect.

He can end the email/note with a line saying/asking others to correct/add/modify if he has missed out or misunderstood any points. This would ensure that the general agreement among the participants is on record, even if no one replies to his email.

Hope you got the point.

Concerns About the Company's Reputation

Coming to his being scared of the company's past history of vindictive attitude, going by what you mentioned, I have a feeling that this would be known even outside the company—among the competitors and companies in a similar line of business. So any bad-mouthing MAY NOT have much effect—if that's what he is fearing—ASSUMING this person has a reasonably good reputation outside the company circles.

Client Perceptions and References

Coming to another aspect, you haven't mentioned the perceptions among the clients about the ACTUAL reasons for the situations which forced them to initiate action. I would differentiate the 'action taken' from the 'perception' of the clients—the former being what they are expected to do officially and the latter being 'in the know' of the issues 'within the company' that led to the situations.

If the clients DO KNOW about the internal issues, then I think this person can take some of the clients as references, INSTEAD of the company references, when he is looking to change.

Regards,
TS

Thank you for your responses, TS. I am not going to confirm one way or the other since I like to keep conversations here impersonal and fluid. That way, biases are often avoided in responses from experts. 

Thank you all. I think he needs to quit this company but is really fearing vindictive action and is quite scared. His salary for two months, pending reimbursements (up to 60k), and statutory benefits (7.5 years!) are all going to be held up, and he can't afford that. Sadly, the company knows his financial status and is using it against him.

Counseling is something that he won’t get in his company.

Regards,

I guess this person needs to first make up his mind and set his priorities. There's a saying in Hindi: "zindagi mein kuch paana hai toh kuch khona hai" (to gain something in life, you have to lose something).

It's up to each individual to decide what he or she wants or wishes and then be prepared to pay the price. It doesn't work if I want something, but I'm not ready to pay the needed price for it at the necessary time.

You mentioned that he stands to lose a lot of money—I agree that the amount isn't small by any standards. However, when it comes to statutory benefits, I don't think the company has any say or control—like PF, etc.—even if they want to play dirty. And even if they did, going legal and spreading the message on social media is, nowadays, a big deterrent for such companies. More than correcting the wrongs done, it's the unwanted publicity that such companies prefer not to handle.

So in a way, the worst-case scenario would be the loss of only the Salary + Reimbursements part of the dues. It depends on him and him alone to decide which is the lesser evil or constraint of the available options—since this isn't a 'right' or 'wrong' issue. It depends more on individual priorities at a given point in time for the person.

I suggest waiting for other members to respond too.

Regards,
TS