Construction Site Dilemma: How Should Companies Handle Employee Misconduct?

Case in the Construction Industry

This is a case related to the construction industry where one of the employees took some money (as he was in need) from another person working with the client and left the company without notice. Since he was not coming to the site, the person who lent him the money started looking for him and informed his seniors, who in turn approached the company. As an organization, how can we keep ourselves out of it without creating a dispute with the client?

Regards,
Kavita

The person used his personal clout to secure a loan from another individual. The dispute is deemed to be between the two individuals. Both organizations are out of the picture.

Regards.

Dear Kavita,

This is a real problem, and such employees exist in most companies. Although there are policies in all companies that none of the employees should borrow money from vendors, in reality, this does not happen. Here, two important points need to be considered:

First Point

First, your company is not responsible for the personal actions and omissions of the employees, and legally, you are not responsible to the lender as the lender had not taken consent from the company before lending the money.

Second Point

The second point is when the money was given, the borrower was your employee, and he might have used his official clout to take money from the vendor's employee. The non-refund of this amount will cause an unnecessary dispute with that person. I am sure it can harm the interests of your company somewhere indirectly.

In this case, just tell the lender that your company does not appreciate these types of transactions as these transactions are treated like bribing people by vendors. Also, inform the same to his seniors. They must inform their employees strictly not to enter into similar transactions in the future, and if any of the company employees ask for some money or favors, they must inform your company immediately. You should also issue a circular to all your employees and warn them of strict action if anybody is found doing similar misconduct; he will be sacked, or strict penal action will be taken.

Resolving the Present Case

To solve the present case, assure the lender that you sympathize with him personally and will try to help him recover his dues. As your employee has left the job without intimating the company and there may be some wages or other funds payable to him, he may come to settle the accounts. Just make sure the lender is present at the time of the settlement of the account and then let them settle the account themselves.

I hope by doing so, you can settle the dispute and avoid a similar problem in the future.

Regards.

As the company is not responsible for this type of transaction, you may add a point in the terms & conditions with every client. Any transaction made in cash/cheque to an employee on a personal level will not be liable for payment by the company. Therefore, do not pay any amount to an employee without a company receipt.

Regards

Navneet's assertions are correct. I will add another thing: provide all contact information of the absconding employee to the lender. They can then go and apprehend him to recover the money. It may also be useful for a manager to call and speak to the absconding employee to inquire about his intentions regarding repayment (although the effectiveness of this approach is uncertain).

As Naveen suggested, it is important for you to communicate to the client (including the owners and top management) the nature of the transaction and remind them to ensure that such incidents do not occur in the future. Addressing this now will prevent any potential blame being placed on you later on.

Dear all, Thank you for the suggestions. We have been able to track the employee and asked him to talk to the lender. The situation is under control. It was a tricky situation as we were getting calls from the client's senior person as well.

Regards,
Kasturi Rao