Dear Mahesh,
Nobody is guilty till it is proved, this is what Indian jurisprudence teaches us. Therefore,
prima facie, the employee is not guilty.
You have not written what are the charges, what is the gravity of offense, whether it was domestic issue etc. It is so easy to fix someone. Take the case of Section 498-A. Large number of suicides happens because wives implicate their husbands under this section. Do not forget that on the one side there are women atrocities and on the another all the family laws are heavily tilted towards women. Men or women, manipulate the laws for their insidious gains.
About 4 years ago,
HR Manager of Infosys was arrested for murdering his wife. Infosys had removed him from the job because the charges were severe and there was enough evidence at hand.
Therefore, I request you to first find out the facts of the case. Whether there was act of moral turpitude, whether there is material evidence, quality of the evidence etc. If the charges are not so severe then you may allow him to continue. I say so because suppose you remove him from the job and what if court acquits the accused? In that case will it not be injustice to the employee? Will you pay him the back wages and restore his job?
I request you to take equanimous view and not get carried away. The arrest might have become talk of the town in your company. However, tell the employees to mind their own business.
Thanks,
Dinesh V Divekar