Handling Employee Resignation After Inquiry: Can We Recover Inquiry Costs?

Dear Members,

We have conducted an inquiry of a permanent workman, and he has been found guilty by the inquiry officer. He has now requested the company not to dismiss him and is willing to resign.

If we accept his resignation, can we recover the money from him that we have spent on the inquiry process?

Regards,
Govind Pawar
IR Dept

Dear Govind,

Inflicting a major punishment like termination depends on the misconduct committed (which, as you state, has been proved in the domestic inquiry) and as laid down in your standing orders, code of conduct, or discipline rules. In accordance with the above, it is your prerogative to terminate his services. Similarly, to condone or accept resignation is also the prerogative of the company. The inquiry process and the expenditure incurred are part of the administrative functions of the company.

Therefore, it seems unethical to ask an employee that his termination can be converted to resignation if he is willing to pay for the departmental inquiry expenses. If it is not blackmail, then it is too ridiculous and exhibits to what level a company can stoop. Such practices are unheard of and unthinkable in good, established, and big companies. Please advise your management that it may be a good idea to condone the misconduct or accept a resignation letter instead of issuing a termination order, which can be challenged in court and would necessarily involve expenses of hiring a lawyer, etc.

Also, remember that the labor court or civil court can definitely find certain lacunae with the departmental inquiry and vitiate all your actions. Thus, the company may have to pay the unpaid salary as well as compensation for wrongful termination. The expenses on the inquiry would have already gone down the drain.

Dear Govind, I understand yours must be a small family-run company to act in this manner. If an employee dies during employment, would such a company recover the cost related to post-mortem and funeral from the widow? Try to act as a conscientious HR and advise your management accordingly.

Warm regards.

While I am in complete agreement with Mr. Raj Kumar Hansda, I wish to add another perspective to bolster his case further. If you do not agree to the concerned workman's request (to be allowed to resign) and insist upon your "right" to terminate his employment by way of dismissal, then kindly remember:

1. The dismissed workman can always raise an industrial dispute and go through all the paces, dragging the company along. This would entail additional costs to the company in terms of money, executive time, and ultimately the advocate's charges if the matter is referred to judicial determination (which it will be if there is no compromise before the Conciliation Officer).

2. Furthermore, if the matter is decided against the employer and a "reinstatement" is ordered (with or without back wages), you will have to either go on appeal and incur further costs or will have to take the workman back in employment as ordered by the court (at this stage or at the appeal if that also goes against the employer). A reinstated worker can be a real "pain" in the future!

3. If you go in appeal against the order of reinstatement (if there is any), you have to start paying full wages under Sec. 17 (B) of the Industrial Disputes Act until the final outcome of the matter.

All in all, I feel the workman is handing you an opportunity to avoid future (possible) costs and inconveniences. Convince the management to grab this opportunity with both hands and close the issue amicably, as that will also deny the workman any opportunity to litigate as the dispute will not have survived when you accept his request and let him resign from employment. Compared to what the company may have to go through in defending the decision to terminate, bearing costs of domestic inquiry is a small matter! Remember that the vitiation of the inquiry is quite possible depending on how it is conducted, and under Sec. 11 of the Industrial Disputes Act, the courts have the power to interfere with the quantum of punishment and substitute its own. It is theoretically possible that the domestic inquiry may be held to be fair and proper, but the court may interfere with the quantum of punishment.

Either way, the company will remain vulnerable. It is wise to let the workman resign from another point of view also. See, for alleged misconducts the company was about to terminate the employer-employee relationship. If the workman wishes to do so and protect his future possibilities of alternative employment/occupation, HR thought must encourage him to do so, if not for anything else, at least its own enlightened organizational interests.

Get the point?

Regards,
Samvedan
February 15, 2013

Dear Seniors,

I have some questions in my mind:

1. Can workmen make a complaint to the Conciliation Officer that the Inquiry Officer is biased while the inquiry is in process? What are the repercussions on the company?

2. If we terminate or dismiss workmen found guilty by the Inquiry Officer, where can they appeal? Is it in the Labour Court or the Industrial Court?

Regards,
Govind Pawar

Of course, he can make a complaint to the Conciliation Officer, but it would be futile, as the Conciliation Officer has NO statutory role in the matter. Even if he were to have a role, the law does not permit him to make decisions or direct parties in any way. The worker would be wasting his time.

Steps to Address Bias Allegations

The right step would be to make a statement in the enquiry proceedings itself, and if the EO does not record the objection and/or does not give a ruling, the workmen may approach the authority appointing the EO and lodge a complaint. However, the worker should remember that UNLESS he has some reliable evidence to support the allegation of bias on the part of the EO, his complaint will fail. The workmen may even refuse to participate in further proceedings until his grievance is resolved, but he would be taking a great risk with his case.

Impact of Bias Allegations

Normally, a substantive allegation of bias is not ignored, as if proven, it would vitiate the whole Domestic Enquiry itself. The courts will not take a light view of an allegation of bias, especially if it is substantiated.

Process After Dismissal

Dismissing a workman is a decision that must be taken with a lot of internal deliberation. Assuming that it has been done, then the workman, in normal cases, "raises" an industrial dispute with the employer, goes through the conciliation process, and in case of a failure of the process, the dispute will be referred to an appropriate court of law. At this stage, it is not an "appeal," and if the workman's claim fails in court, then depending on the facts of the matter, he may appeal further right up to the Supreme Court by following each stage of the judiciary, but only if the matter merits an appeal (not merely the workman's desire!).

Are your questions answered, please?

Regards,
Samvedan

April 12, 2013