How Should I Handle a Branch Manager Running a Side Business Without Permission?

Dear Seniors, Please guide me with the procedure and a draft for a show cause notice. One of my Branch Managers is carrying out his own business of water supply in his city. I am looking forward to seniors for help in this regard.

Condition in Appointment Letter

There is a condition in our appointment letter that mentions that during the course of employment, an employee should not engage themselves in any other business or profession without written permission from the management. Please guide me with a show cause notice.

Best regards,
Yash Bangar

What is the proof that the Branch Manager is engaging in other business activities? Would he claim that it belongs to his wife, son, brother, etc.? Drafting a show-cause notice is easy, but proving the violation of the terms of appointment or company rules can be very difficult.

On Company Letterhead

Date: DD/MM/YYYY
Name:
Designation:
Department

Re: Carrying on of Private Business

It has been brought to my notice that you are involved in running a business of water supply at (address). Running a private business while being employed is a violation of paragraph ---- of the terms and conditions of employment which you have accepted on (date of acceptance or signing on appointment order in acceptance of the job). This act of yours is a clear violation of company policy as aforementioned.

Your conduct is totally unbecoming of an employee of the company, and you are, therefore, required to submit a written explanation to the undersigned on or before (date) as to why appropriate action should not be taken against you.

It may be noted that if no reply is received, the company is at liberty to proceed with suitable actions against you.

Yours faithfully

You should discuss this issue with him first before issuing any letter. As rightly suggested by Nathrao, you must have the proof before mooting any discussion.

Check whether the business is in his name first. Most of the time, it would be in the name of a family member. Without ascertaining the facts, in case you issue him a notice and he responds back stating that the business belongs to his family member, it would be embarrassing for you and the organization. So, kindly first ascertain the facts discreetly before you proceed with issuing a notice.

Do the terms of appointment prevent employees from engaging in their own business? If yes, then only can you take any direct action. If the same is not included now, at the time of the revision of salary next time, such a clause can be included.