Handling Employee Resignation After Financial Misconduct: Is a Hold and Inquiry Enough?

I have a query. Suppose an employee, after committing financial irregularities, tenders his immediate resignation to the management. Thereafter, he goes on a long absence. Management, despite accepting his resignation, sent him a notice (after 10-20 days) stating that his resignation has been put on hold and a detailed inquiry will be conducted against him. During his absence, he will work on a no work, no pay basis. Will this suffice, or should other measures have been adopted?

I need an earliest reply.

Regards.

Since the resignation is not accepted, the employer-employee relationship continues. Disciplinary action can be initiated with the issuance of a charge sheet. The employee may be kept under suspension pending an inquiry (see your standing orders), in which case a subsistence allowance is to be paid. Other than these disciplinary procedures (required if you decide later to dismiss him in case charges are proved, and for the forfeiture of gratuity, leave encashment, etc.), an FIR may be lodged with the police under the applicable provisions of the IPC, and a criminal case may also be initiated.

Your action seems to have some contradictions. Your statement that, in spite of accepting his resignation, management has sent him a notice informing him that his resignation has been put on hold. Once the resignation has been accepted, how was it again kept on hold? Was the resignation to take immediate effect, or is it to take effect from a future date? If so, was the notice sent within such a future date? Was it accepted with immediate effect or with effect from a future date? Was the acceptance communicated to the employee? What is this working on a no-work-no-pay basis? All these issues are to be examined before taking disciplinary action.

Regards,
B. Saikumar

I agree with the views of Mr. Sajan, except for a few things as detailed below. You may proceed as follows:

Issue a Chargesheet

Issue a chargesheet as per the standing orders applicable, mentioning the clause number(s) under which charges have been framed. Place the employee concerned under suspension and ask him to report on working days to get his presence marked for payment of subsistence allowance and to ensure that he has not secured employment elsewhere during the period of suspension. Clearly mention the amount of misappropriation and ask for an explanation. Order and conduct an inquiry. Notify the employee concerned to participate and defend himself/herself. Mentioning the amount is necessary so that it may be included in the dismissal order if charges are proved and the employee is found guilty of misconduct.

Inquiry Process

Send a copy of the constitution of the Inquiry Committee and fix the date of the inquiry for the accused employee (AW) through registered post with A/D, allowing reasonable time for postal delivery. If AW fails to participate in the inquiry and defend himself, provide two more dates for attending the inquiry. The Inquiry Officer (IO) should record the absence. Even if the AW fails thereafter, conclude the inquiry proceedings ex-parte. The IO will give his findings and conclude by proving the charges as the AW failed to defend himself/herself.

Disciplinary Action

The Disciplinary Authority will then order the punishment deemed fit. In this case, it might be dismissal from service on moral turpitude grounds with forfeiture of gratuity and other terminal dues to the extent of misappropriation of funds.

Please Note:

1. Gratuity cannot be forfeited unless the amount of forfeiture is mentioned in the dismissal order, and dismissal is being made on the ground of moral turpitude.

2. Ensure that resignation is not accepted. Do not use the term "on hold" for keeping the acceptance of resignation in abeyance. Communicate to the erring employee that resignation has not been accepted, and he has been found guilty of misconduct.

Regards,
AK Jain

I appreciate the further inputs provided by Mr. A K Jain. However, I would suggest that it should be mentioned that misconduct is alleged until the charges are proven in a duly conducted domestic/departmental inquiry, rather than stating "he has been found guilty of misconduct - see the last sentence" at this stage. Otherwise, it could be argued later that the management was prejudiced and had already decided to find the employee guilty.

Regards,
V K Sajan

Urgent Assistance Required: Suspension and Inquiry Situation

I require all of your help on an urgent basis regarding the matter below. Please assist me in resolving this situation:

I was working with a Limited company, and there was an incident involving another employee where my name was also implicated. As a result, the company suspended me, and I have been on suspension from Sep. 2009 until the present date. After almost 9 months, the company began providing me with a suspension allowance, which amounts to 75% of my gross salary. Now, after 5 years, an official inquiry has been initiated against me, and I am being called to the Head Office every week. The inquiry officer and the personnel manager are pressuring me to resign and drop the matter.

Could anyone please suggest what I should do in this situation? Should I resign or face the inquiry proceedings? If I opt for the inquiry, how should I handle these professionals?

Thanks & Regards,
Amit

Dear Mr. Amit,

Allegations and Suspension Details

The inputs given by you:
- You have been alleged of misconduct in September 2009.
- The company is paying subsistence allowance at 75% after 9 months of suspension.
- The inquiry proceedings have started after a lapse of about 5 years.

Suggestions for Handling the Situation

1) Go through the Certified Standing Orders of your company. There must be a timeframe mentioned to complete the inquiry in disciplinary cases, modalities for the payment of subsistence allowance, assistance of co-workers, etc.

2) Normally, after a suspension period of 10 days, 50% of wages/salary is payable as a subsistence allowance for 90 days in some establishments, and thereafter at 75% for the rest of the suspension period. The only condition is that the suspended employee has to submit a declaration that he has not undertaken any employment elsewhere. As for the completion of the inquiry, the normal time period is 6 months from the date of the issuance of the chargesheet. However, this period can be extended depending upon the proceedings and the gravity of the charges. But the proceedings must start within 6 months.

3) You need not submit your resignation if you are not guilty. Defend yourself honestly. Honesty will prevail.

4) If you are being forced to resign, you can seek shelter in the court of law in the Honorable High Court under whose jurisdiction your company falls or before any other court that is deemed appropriate.

First of all, you must claim the subsistence allowance from the date of the expiry of 10 days at 50% and at 75% after the expiry of 90 days of suspension. Obtain a receipt of the application from the concerned office to have proof of the submission of the claim. But before that, please review the Certified Standing Order for your company or Model Standing Orders.

Feel free to ask in case of any doubt.

Regards,
AK Jain
HR Personnel.

Dear Mr. Jain,

Please accept my heartfelt thanks for your valuable suggestions and reply. Kindly suggest some more things if you feel free.

Standing Orders and Their Benefits

1. From where can I collect the Standing Orders of my company? If the standing order is in my favor, how can I fight on its behalf, and what benefits can I get?

Proceedings After Delay

2. In my case, proceedings started after 5 years. Is it beneficial for me?

Jurisdiction Concerns

3. My company falls under the Maharashtra Government, and I was working in the Gurgaon branch. Which jurisdiction's door do I have to knock?

Committee and Proof Concerns

4. One more suggestion I would require: They are the entire committee, and I am a single person without any strong proof against the charges. If I am found guilty, what actions can they take against me? If I am not found guilty, what financial benefits will I get from them?

Thanks & Regards,
Amit

I am happy that my suggestions helped you.

1) You can request a Certified Standing Order copy from the HR department personally, through an application, or through the RTI Act - 2005.

2) There is no question of beneficial or non-beneficial. The question is one of justice or injustice.

3) There is no specific question about jurisdiction. You can approach the court that suits you according to your easy accessibility. The jurisdiction, if challenged by the Counselor of management, can be set aside by the Honorable court if your grounds for approaching this court are justified and accepted by the Honorable Judge.

4) As suggested earlier, you can seek help from a co-worker who will assist/help you in the inquiry proceedings. Normally, these are Union leaders if you have any in your organization. If not, you may seek legal assistance, or you may discuss your Memo/Chargesheet via my phone/email [Email Removed For Privacy Reasons] for purely friendly advice, nothing professional, if you wish. Please note that this discussion will purely be on a friendly platform, with no legal implications whatsoever.

Regards,
AK Jain
HR Professional.

Dear Mr. Nathrao,

Thank you for your reply. I'm confused about your line "I would take them to court and ask for back wages and certainly look for another job." I would require some more valuable suggestions from all the seniors. All are kindly requested to please help me in this matter on an urgent basis.

Thanks & Regards,
Amit Kumar

With the new employee code, your earlier history of service will be closed, and your new history as a fresh employee will begin.

Think carefully before accepting such sweet offers that may have deeper meanings.