Understanding Termination and Domestic Inquiry Processes in Employment Law

Dear Seniors,

Greetings of the day!

Are there any circumstances where an employee would be dismissed or terminated without resorting to or conducting a domestic inquiry by the principal employer?

Thanks in anticipation.

Yes, there are certain circumstances where the employee would be dismissed or terminated without resorting to conducting a domestic inquiry by the principal employer. A domestic inquiry can be conducted for acts or crimes committed within the employer's premises and during the course of employment. For example, a punishable judgment from a court of law for an act or crime committed before joining the company.

Whose employee and why principal employer. What about the immediate employer. The post is not clear.

B. Saikumar

Dear Prashant,

If the offense is committed within the 'premises' 'precincts' of the Factory/office, in the course of employment, dismissal (pending inquiry) without conducting a formal inquiry as provided for under Standing Order is not maintainable before the law. Any action devoid of due process cannot be defended in court. Natural justice should prevail.

Kumar S.

An employee can be terminated without due enquiry in exceptional situations. However, when it is challenged in court, the matter will be open before the court. The employer has to prove the guilt with evidence. The employee also will adduce evidence. But termination without an enquiry is risky. It is always better to go for a due enquiry. An employee can be terminated without due enquiry at the end of his fixed-term appointment or as per a clause in the agreement. When an establishment is closed or transferred, or an employee is retrenched for unauthorized absence for many years.

VARGHESE MATHEW

Dear Prashant,

I have read all views so far. A domestic enquiry provides an opportunity for the employer to ensure that the employee is at fault and requires punishment. In direct action, there is a chance that the employer is wrong. However, sometimes the employee does not cooperate during the domestic enquiry process. This lack of cooperation could manifest as absence, threats to the EO or MR, or intimidation of witnesses, among other behaviors. In such cases, the employer can proceed with dismissal after providing due notice to the employee, and further evidence can be presented in court. Additionally, in court, the employer will need to demonstrate why conducting a domestic enquiry was not feasible.

It is essential to note that the enquiry must be initiated by the employer and not the principal employer or any other individual. The manager of the organization is authorized to issue a chargesheet and notice of enquiry.

Vibhakar Ramtirthkar.

Dear Prashant,

The post is not clear to me. Do you want to ask whether the principal employer can terminate a contract worker without conducting a domestic enquiry? Clear my doubt so that we can provide a proper answer to it.

The doubt arises only because you have mentioned the term "Principal Employer."

Arun J.

Dear Sir,

I want to clarify that Principal employer is equal to employer. I hope this is clear now.

Direct termination/dismissal is resorted to only in exceptional severe circumstances. If the charges are serious, the employee can be suspended pending further proceedings, and a domestic enquiry can be conducted. Even in extreme circumstances where such drastic action is necessary, the principles of natural justice must be followed. This includes asking for an explanation through a show cause notice, providing an opportunity to respond to a second show cause notice intimating the proposed direct termination, and ensuring that the final order justifies the said direct action. The management should be prepared to participate in a full-fledged enquiry in the Labour Court on the matter. In such proceedings, the verdict may go against the management due to the lapse of a few years in the Court.

M. Venkatraghavan

Dear All,

It should be clear that the principal employer is not the employer. In the case of a contract laborer, their employer is the contractor, and the principal employer is the person who employed the contractor. The principal employer has no authority over the contract labor, and if they do, the contract labor then becomes their direct employee. Action regarding contract labor should be taken by the employer, i.e., the contractor, and not the principal employer.

Vibhakar Ramtirthkar SVR Associates HR Consultant

Dear all,

An employee can be terminated without a domestic inquiry only if he commits or is involved in any serious criminal offense, whether such crime occurred within the premises of the company or outside is immaterial.

Jeevanantham S.
Advocate, Chennai

In my view, you cannot terminate an employee without a domestic inquiry for committing even a serious offense unless there is an enabling provision in the service rules/standing orders or a statute that governs the service conditions of the employee.

B. Saikumar
Mumbai

A model query: What if the contract employee commits a breach of trust, theft, or some other criminal offence punishable under both the PE's rules, IPC/Cr.PC, etc.? The PE doesn't have the right to ban/bar him (terminate or expel or prosecute, etc.) despite the fact that he is not directly employed by the PE? Does the accused CL enjoy immunity under the CLRA Act or such acts?

This is for the queriest (for further clarifications on this issue):

"Q. Who is to take disciplinary action against contract labor? Under what rules? Are standing orders applicable to contract labour?

Ans. The contractor, as the employer in relation to contract workmen, should take disciplinary action against such errant workmen under the service rules of his organization/terms of employment. Standing Orders are not applicable to contract labour as the definition of the workman under the Industrial Employment Standing Order Act does not cover contract labour unless your Standing Orders cover this category."

Kumar S.

Dear All,

If a contract labor commits theft or other serious misconduct, it is not that the contract labor gets immunity. The contractor, on his own, or at least after being informed by the principal employer, has to take action. The contractor is the employer and has the authority to employ or terminate his labor.

Standing Orders can become applicable to the contractor if he employs 50/100 labor, as the case may be, as per the rules in different states. Even if the contractor employs fewer than that number, he is governed by court-made laws and principles of natural justice. The contractor cannot summarily dismiss his labor. Since contract labor is not organized, the contractor can orally tell the labor to go, and that marks the end of the labor's employment. But that is a different matter. Legally speaking, what is given above will hold.

Vibhakar Ramtirthkar SVR Associates HR Consultant

Dear Prashant,

It seems the responses to your original query stand "vitiated" by the usage of wrong terminologies, i.e., using the term "Principal Employer".

I do not know if you are aware of the real meaning of the term. Perhaps you thought that by adding a serious-sounding prefix like "principal," you would make the word have more emphasis.

This is evident from your second response when members were confused.

However, your response again adds to the confusion.

Either you should have accepted your lapse or should have paraphrased (re-stated) your query.

What do you mean by: "Principal employer = employer"?

Do you mean that the Left Hand Side is equal to R.H.S.?

Implying that both are the same thing?

No wonder the responses you are receiving are confusing and contradictory.

It is like saying, "Father-in-law = Father."

It may be in spirit, but while asking questions of a technical nature, one should be very specific.

Please deliberate on what you want to know and then ask the right questions.

Warm regards.

Dear Mr. Hansdah,

I am very sorry for wrongly writing "Principal Employer". Actually, I wanted to know if an employer can terminate an employee without any domestic enquiry.

Dear Prashant,

Thank you for restating your query. It now provides an entirely new perspective, and the discussions will proceed in the right direction, unclouded by any reference to contractors or their employees. While awaiting a fresh response, I have found that in some posts, this query has been adequately addressed.

Warm regards.

Case Study: CPSU Self-Termination Clause Application

The following case study involves a CPSU applying a self-termination clause without a domestic inquiry based on case grounds. The appeal was dismissed in the Karnataka High Court on 10-11-2014. Judgment links are as follows:

http://judgmenthck.kar.nic.in/judgme...3456789/904828

http://judgmenthck.kar.nic.in/judgme...3456789/931584

I am the AGM of Engineering and Project ID No. 1476 since 2007 at Karnataka Antibiotic and Pharmaceuticals Ltd, a PSU in Bangalore. During a project assignment in 2008, management transferred me to Engineering Stores in January 2013 without a salary reduction. Later, I was transferred to the marketing department as AGM Marketing (medicine sales) in October 2013. I believe the transfer may not align with the PSU transfer policy, as it occurred within 10 months without validating the purpose of the appointment and posting at Guwahati.

CDA rules and the transfer policy are not accessible. The transfer might be a retaliation by a senior officer for refusing to amend a vendor purchase order when I was the project in-charge, even after explaining the techno-commercial reasons that would increase project costs. I later learned that the order amendment was done with consultant approval against the tender terms. The transfer letter dated October 2013, signed by the GM HRD, is not from the appointing authority as per my appointment letter and does not indicate the Guwahati company's present or establishment address details as per PSU guidelines. It lacks clarity regarding the employee's transfer benefits and reporting to GM Marketing at the Bangalore head office. Hence, I submitted a representation for reconsideration of the transfer, which was rejected. I sought legal opinion. Even the High Court order for reconsideration of the transfer, as an engineer may not be suitable to sell medicines, was rejected by HRD.

I reported for duty at the Bangalore marketing department at the head office and took long medical leaves exceeding 60 days. HRD could have revoked the self-termination clause for unauthorized absence, but the leaves were sanctioned by GM HRD, not GM Marketing. Then, the reporting officer forced me to accept a letter as Manager, a demoted post, without a domestic inquiry and chargesheet. The letter does not mention the company's establishment address details, and the reporting officer is based in the Bangalore office. Later, in January 2014, I reached Guwahati and started working from a hotel, communicating via personal email ID; the company did not provide an official email ID. Daily report emails were treated as work attendance, hoping the company might support with office infrastructure and staff at the AGM grade, but this was refused in writing. This appears to be a malicious transfer and misuse of public power. I was later forced to work at a further lower post as a medical representative. After almost two years of physical and mental harassment, salary reduction, unexplained salary deductions, and nonpayment of March 2014 salary despite income tax deductions, I vacated Guwahati. In January 2016, the company settled my dues on account of self-termination or self-abandonment of service or unauthorized absence without conducting a domestic inquiry and without my resignation. I hope CDA rules approved by CVC protect PSU employees under Articles 14, 16, and 21.

Kindly note the links below for reference:

http://alrafeeq.blogspot.in/2008/02/...75639277268737

https://indiankanoon.org/doc/389826/

http://www.lawyersclubindia.com/judi...p#.VwP9t1O3Qb3

http://www.hrinfo.in/2015/12/case-laws-2014.html?m=1

Case no P&H High Court 31

Poor employee has received gratuity without resignation/termination/VRS and without service certificates. Has the CPSU acted legally?

P.S. Kindly copy and paste the links.