Employee Arrested for Serious Crime: Can We Legally Terminate His Employment?

In our organization, one of our employees has been arrested on suspicion of murdering his wife, and he is in police custody. On this basis, can we terminate him from our employment? I am waiting for your valuable suggestion.

Regards

The employer needs to have a valid and fair reason for termination. According to Indian law, an employee can be terminated based on four valid reasons/situations. They are:

1. Misconduct
2. Incapacity
3. Incompatibility
4. Employer's operational requirements/retrenchment.

Apart from the above-mentioned reasons, an employer can also terminate an employee due to any legal case for which an employee is convicted and sentenced to a period of punishment. An employer should always have a genuine reason to support the course of action.

According to the law, under the Employment and Labour Relations Act, 2004, and The Employment and Labour Relations Rules, 2007, the procedures for termination are different depending on the reason for termination, but they all have a common item - the right of an employee to be heard before a termination decision is taken against an employee.

Also, no employer can terminate or take disciplinary action against an employee who is facing criminal charges before a court of law unless the same has been proved against him/her or they have been convicted for the criminal case filed against them.

On an individual level, the fair law states that one is innocent until proven guilty. Therefore, should your employee be punished now (by you) before being proven guilty? Unfortunately, the answer is YES. This is because you have a duty to the company and the rest of the employees, known as a Duty of Care. You cannot upset the employees; you cannot create a worrying situation by allowing the employees to think that this person will be back, and you must take action now to prevent rumors.

However, you must also write to this person and inform them that their employment is being terminated with immediate effect and give the reasons why, including the above. He probably knows that he has lost his job, but you must act responsibly and ensure that all his dues are paid up to the date of arrest.

I hope the above helps.

Regards, Harsh

Termination on the Grounds of Conviction

Termination on the ground of conviction by court is not just automatic, but the employer is under an obligation to follow the same procedures as are required in the case of an employee charged with an offense or misconduct during the course of employment. It is true that a convicted employee may not be able to accept a show cause notice/charge sheet or attend departmental inquiries. If he/she does not turn up for departmental inquiries, certainly, you can take a call to terminate the employee. The law also states that even if he is convicted, the employer should wait until the order of the appeal court comes, and if he is not filing any appeal against the order of the lower court, wait until the time of appeal expires.

To add one more thing, though he/she is terminated on the ground of conviction and following the procedures in the standing orders of the company, you cannot deny his gratuity if he is otherwise eligible for gratuity. Because gratuity is something that can be forfeited only on the grounds of serious misconduct that has taken place DURING THE COURSE OF EMPLOYMENT.

The employee is in police custody. What is the official paper or communication that you have from him or his relations about his absenteeism? If there is any intimation, whether true or false, you have to handle the situation according to the reason mentioned in such communication.

If there is no communication from him about his absenteeism, you should send him a letter of absconding from duties, which will likely remain unanswered, and then you can take further steps. If the police department has informed you that this employee is in their custody, then I don't think you can do anything until the court verdict is announced.

Termination Due to Employee Incapacity

Follow inquiries, and then you can terminate the employee on the basis of their incapacity to come to work for a considerable time. If the employee can return to work within three months, you must wait, but if not, you can terminate them after an inquiry. Additionally, all dues, including gratuity, must be paid on the last date of termination.

I think it will be unfair to remove him for the above reasons. Until the person is found guilty, we cannot say that he has committed a serious offense. There are many cases where people have lost their jobs due to such situations, only to be later found not guilty. Therefore, unless the same is proven in a court of law, it would be improper to dismiss him from his job.

Additionally, his behavior in the company needs to be taken into consideration. So before any action is taken, kindly ensure that the principles of natural justice are not disregarded.

You cannot terminate him based on his criminal case because his case is pending before the criminal court and has not been cleared. The law treats him as an accused, not a convicted person.

Legal Action Post-Judgment

If the court judgment does not come in favor of the employee, then you can discuss the same with your management for further legal action. Additionally, you have to refer to your company's certified standing order regarding the process of termination or disciplinary procedures and follow the same.

Thanks & Regards,

Kanthraj