Can Employers Suspend Underperforming Employees and Adjust Leave for Suspension?

Dear Seniors,

If an employee is not performing well, and the employer wishes to suspend them for one week, can the employer suspend them or not? If the employer suspends the employee and the employee has a balance of leave, can we adjust their leave against the suspension period when preparing the salary? Also, if we demote an employee, can we decrease their salary or not? Please reply.

Thanks & Regards,
Nitin Sharma

Understanding Employee Performance Issues

What do you mean by saying an employee is not working well? Is he a poor worker or intentionally showing poor work output? Suspension is basically disciplinary in nature and cannot be invoked for incapability in work. He can be sent for additional training.

Demotion and Salary Reduction

Demoting an employee or reducing salary can be done by following the due procedure of law-certified standing order, etc. The basic principle for demotion: Every arbitrary demotion is illegal if made without giving any opportunity to the employee to defend his cause. One has to equally understand the impact of demotion on the employee and the negative effects on the individual and organization as well. So deal with such cases after deep and careful thought in all angles.

For more information on decreasing salary after demotion, you can visit the following link: https://www.citehr.com/84507-decreas...otion-pg2.html

Understanding Suspension and Forced Leave
Suspension and forced leave are two different things. Suspension can be used against misconduct, violation, or breach of policies only when other means of counseling statements have been exhausted. Immediate suspension can also be possible when the misconduct results in loss of trust, or any further damage is anticipated. Suspension is generally "unpaid" and followed by a domestic or legal inquiry. Suspension on full pay can also be used when an employee needs to be removed from the workplace to avoid prejudicing an investigation. This is used not as a punishment but in the employer's best interest.

If you want to compensate the suspension against the earned leave days, then it is 'forced leave'. This is an adjustment accepted by the employee, as the suspension is not shown on his record, and the organization remains clean since the leave application is made to be filled up by the employee. Such leaves are useful when there is no real work available to the employee, and the company has no other choice than to 'lay off' employees.

Impact on Employee Performance
With neither action, the "efficiency" of the employee would show any upgrade after the suspension. His priorities and dedication towards the job may increase, but not his productivity and work accuracy. At the same time, his interest in the job may diminish with this suspension. You need to first find out on which aspect the employee is really lacking. Also, think if you can motivate him further by inducting training or suggesting different opportunities to show good performance (maybe a change of department?).

If after all, the employee is really an underperformer, then why don't you just ask him to leave? Maybe this is not the suitable job for him, or he is not the suitable candidate for your organization.

Considerations on Demotion
Demotion with a salary decrease is not a good move for the company as well as for the employee. Demotion just increases dissatisfaction at both levels. An alternative is to let the person go and hire someone with a lower salary at the junior level. Here the issue is not only the employee's performance but the promotion policy of the company in the first place.

Best Regards,
Amod Bobade.

Thank you so much Nath Rao Sir & Amod Sir for your great reply. However, I made a mistake in my previous message. I mentioned that the employee was not working well, but the issue is actually that the employee is consistently late for duty. As a result, my boss has decided that we should issue him a suspension letter.

Not coming on duty time is a breach of discipline. Is he a frequent latecomer? Has he been warned earlier? You just cannot suspend a person coming late for the first time or even infrequently, without following earlier warning and counseling procedures. This is supposed to be how a good employer treats staff. But then we have employers waiting for the least chance to remove/suspend employees as well. Basically, a sense of fairness and justice should be the cornerstone of any action.

Based on evidence of repeated late arrivals, warnings, and salary deductions, appropriate action should be taken against the employee.

You have to mention in the suspension letter that you won't be paid during the period of suspension. Suspension is a punishment. If you can avail leaves during the suspension period, then suspension will become meaningless.

We discourage demotion. Yes, you can promote someone to that position or hire someone else, but you cannot decrease the salary of that employee. It's not good for employee motivation or morale, as well as not good for the company.

Is the employee a 'He' or a 'She'? Not that this matters, but your responses give mixed indications. Anyway, 'she' may show that she doesn't care about salary, but actually, everyone does. A delayed promotion/increment (or demotion in this case) (as compared to other peers getting these perks) always affects a person. She may show that for one or two instances it did not affect her, but in the long run, she will surely feel it. Try to have a candid discussion with her and understand her concerns. Also, give clear indications of these long-term effects on her career with this background.

If you want to make it an example to highlight your office punctuality rules, then surely suspension is one of the suitable disciplinary actions. Though, the effectiveness of it 'for this employee' might not be as you expect. It does not take time to multiply such behavior amongst employees starting from one isolated case. But punishment does not necessarily stop it. You have to work towards modifying the office culture where coming late does not even come to the mind of employees.

As I said before, if this is just one employee creating a bad environment in an otherwise good office culture, then it will be better to let her go than trying to rectify her.

Follow-up Questions

1. Does she also stay back in the office and work until late?
2. Is her work effective, and does the late coming affect her productivity? Except for this one concern, how is her overall performance?
3. Even though she does not care for the salary, does she really care for her assignments and the company welfare?
4. Is she being given less work so she feels her presence in the office full time is not necessary? Have you tried increasing her workload? Maybe give some additional extracurricular responsibility like internal trainings?
5. What is her relative position in the organization? What is the strength of her department? Have you tried to collect 360-degree feedback for her?
6. What is her job profile—physical or mental efforts work?
7. What is the general attendance record and punctuality in the workplace otherwise?
8. Do you have a union/work associations in the workplace? What is the job security in your organization?

Answers to these questions would also affect the possibility/effectiveness of suspension as disciplinary action. This might not be the scenario, but sometimes such cases are indications that the company policies need to upgrade to the next level (like +/- 1-hour flexible office timing for everyone).

Best Regards,
Amod Bobade.

Suggest your 'gender' right—is it 'he' or 'she'? Amod Bobade has given you a perfect checklist to figure out the reasons why the employee is a regular latecomer. Unless you ascertain the reasons, how can you decide what action to take? However, I am not sure of your reasons for deciding that 'suspension' could be the right choice. What are you trying to achieve? Your line "She doesn’t care about their salary" doesn't look realistic—unless she is well-off and doing a job just for 'time-pass'. In which case, termination could be a better action than suspending—after following the due procedures.

Regards,
TS

Handling Habitual Latecomers and Indiscipline

Your intentions are understood that a 'habitual latecomer' has to be punished for 'indiscipline' with a punishment of 'suspension'. If so, the first thing is to check your Standing Order or Conduct and Discipline Rule applicable to such personnel and find what it says about such cases and how to handle them. If there is no such Standing Order or Rule in vogue in your establishment, it would be prudent to bring into operation properly drafted rules in your HR policy. Then the Standing Order or Rule itself will tell you what to do.

Generally, any indiscipline should be dealt with by giving enough opportunity to the accused to defend themselves against charges to be framed on the alleged indiscipline. If you have your HR personnel in position, they will know how a domestic inquiry should be initiated and how to proceed thereafter. Therefore, assuming all that is required is available in your establishment, the first thing to do is to initiate a formal 'domestic inquiry', issue a show-cause notice, obtain an explanation, and proceed based on the outcome supported by the evidence and records available to you.

You, as a Competent Authority, can suspend any accused pending inquiry for a period as provided for in your HR policy. But such a suspension would give a right to the concerned individual for 'subsistence allowance' during the suspension. Your query does not sound like you are contemplating substituting the adjustment of EL/PL against the suspension period, which does not go together.

Even if the inquiry findings result in demotion or reduction in salary for an erring employee, it should be backed by a properly conducted 'domestic inquiry' only. There is no other legal route to punish an errant employee outside a 'domestic inquiry' procedure. Any shortcut method is not workable.

Regards

Your Queries

If an employee is not working well and the employer wants to suspend them for one week, can the employer suspend them or not? If the employer suspends them and the employee has a balance of leave, can we adjust their leave against the suspension period? If we demote an employee, can we decrease their salary or not? Please reply.

Answer

The employer or the punishing authority can issue a Suspension-Pending Inquiry Order as prescribed in the Standing Orders or the Service Rules for a grave act of misconduct. Thereafter, on the conclusion of the inquiry held as per procedures, issue a Punishment Order.

In other cases of alleged misconduct, it is better to issue a Charge Sheet or an Explanation Letter, get the explanation, hold a proper inquiry, and then issue a Punishment Order based on the findings.

During Suspension Pending Inquiry, the employer has to pay a subsistence allowance. In case the suspension is a Punishment Order after the inquiry findings, the suspended employee is not paid their wages or salary as that is a punishment.

The employer can exercise their prerogative to demote the concerned employee, and in that event, the employee shall receive the wages or salary applicable to the demoted post.

An employee's unavailed leave cannot be set off against or in lieu of the suspension period.

Please advise if you require any other assistance.

Regards,
Kritarth Team
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