How Should Management Handle Employees in Custody for Criminal Charges?

Handling Employees Indicted in Criminal Cases

How should management handle a situation where employees are indicted in a criminal case by the authorities and are under police/judicial custody for investigations? The management has suspended the employees, but communication cannot be reached due to their custody. The alleged offenses are severe in nature and not related to the company but are related to similar activities outside, creating a conflict of interest.

Actions to Avoid Financial Loss

What actions can be initiated under these circumstances to avoid a 50% salary loss to the management? Additionally, how can the management terminate the employees from the payroll?

Please advise.

Handling Employees Indicted in Criminal Cases

The employer's right and power to initiate disciplinary action against any employee are not unlimited. They are confined to the zone of employment and only against acts enumerated as misconduct in the Standing Orders. However, Model Standing Orders provide for the suspension of an employee where criminal proceedings against them in respect of any offense are under investigation or trial, and the employer is satisfied that it is necessary or desirable to do so. In other words, it is a discretionary power of the employer defined by the factors of necessity and adverse implications on the establishment.

Therefore, much consideration is to be given before placing an employee under suspension for their alleged involvement in a criminal act outside the zone of their employment if they are under police/judicial custody/remanded for investigation. This is because they have to be paid a subsistence allowance until they come out of custody on bail or after the investigation.

The details of action taken by the management in this regard so far and the conflict of interest that you've mentioned necessitating your second question seem contradictory to me. In the first place, you have taken the decision of suspension superfluously by going through the letter of the particular enabling provision of the standing order, it seems. Second, you are not able to serve the suspension orders or to have any communication with the employees who are held incommunicado because of their custody. However, the suspension orders have come into effect from the very moment of issue, so there is no possibility of avoiding payment of subsistence allowance as long as the suspension is in effect.

My suggestion under this circumstance, therefore, would be to wait until their release from custody, revoke the suspension as soon as they are enlarged on bail or released on the close of the investigation. No answer can be given regarding their termination of employment at this stage by removing their names from the rolls.

Regards.

Handling Employee Suspension Due to Criminal Cases

It seems your organization has suspended the employee due to criminal issues or a case pending with other authorities, such as police or judicial custody.

In the first sense, how can you suspend the employee unless you have ample evidence against them? Have you received any complaints lodged or information from any authority? Have you verified it?

In these circumstances, you should have the communicative address apart from the one residence address you have in your ledgers, and the other from the authorities through whom you can communicate with the employee. Thus, you have two kinds of addresses for the person/employee whom you want to suspend. Further, you have mentioned that the criminal case has no connection with your organization, meaning the employee is absent either with information or without information. If the employee is absent from day-to-day work with information, you can put the salary in abeyance and let them come to work. The period of absence may be regularized with appropriate proceedings or available evidence, whatever the case may be. When the criminal case is not connected with your organization, the whole issue is related to discipline from your perspective, and you should proceed accordingly. In case the criminal activity is related to your organization, you can directly suspend the individual, and pendency is revoked at the end of the case.

Split the case, and you will find a solution. Also, get the help of your lawyer in such cases.

Best of luck.

Learned posters/members have given you the correct legal position. What I want to add regarding: What action can be initiated under this circumstance to avoid a 50% salary loss to the management? Or how can the management terminate the employees from the payroll?

Subsistence Allowance as a Welfare Provision

The 50% subsistence allowance is a welfare provision for the employee and their dependents. It is a business expenditure and should be regarded as such. Tomorrow, the employee may come out on bail or even get acquitted and rejoin; the gesture of following welfare provisions would boost employee morale. So, wait and watch how things work out.

One can find out details of the case against the employee.

Before we consider options for you, I would like to state my assumption in this case, which is that the concerned employee is a "workman" under the Industrial Disputes Act 1947. Proceeding from this assumption, please note the following points:

1. As an employer, you do have the right to terminate the employment of any such employee by following the established/approved procedures under applicable laws for serious misconduct, as described under the Industrial Employment (Standing Orders) Act 1946.

2. If you have already suspended this employee because there is apparently a criminal proceeding against him, you need to be able to frame (in the right sense) a charge and follow the procedure.

3. The subsistence allowance will have to be paid at stipulated rates for the first 180 days and thereafter at the rate of full salary if the departmental proceedings are not complete for any reasons.

4. Do you have official intimation about his arrest either from the police, the complainants, or his family?

5. If not, kindly proceed as per the normal procedure and take the matters to the logical conclusion.

You must, however, also note that if the disciplinary action is based on the said criminal proceedings, and if at a later date the employee is absolved of the charges (even if by being given the benefit of the doubt), you will be obliged to take him back into employment without a blemish and pay him full back wages; if you don't, he will claim these through a court of law.

Professionally, I do not approve of the haste in suspending him without adequate information at hand! This has amounted to "shooting first and aiming later"!

In the given situation, address relevant correspondence to his latest home address on records and end with a public notification of the charge and the Notice of Enquiry, and take the matter forward in line with the law!

Regards,
Samvedan

July 7, 2015

Conflict of Interest and Double Employment

In the above case, the conflict of interest in terms of double employment has already been established. From the viewpoint of the employer, there is a sufficient basis to inquire into the incident. An employee's association with another employer or outsider is criminal in nature and a non-bailable offense. Obviously, the process has to be followed as per the IR part.

The above-mentioned employees are only accused, not convicted. I have raised a question without any prejudices. Even though the statements of authorities and fellow employees point to the participation of an offense by the employees, the facts have not been established by a competent court.

Extended police custody or extension of judicial custody for inquiry is a ground for the above query while fulfilling the IR process. But when considering a challenge by the employees in the future, we need to have a logical conclusion on the facts of the case to have locus standi in the competent court to justify the termination.

Appreciate your participation and further advice.

Handling Employee Misconduct: Absence Without Leave

If an employee is 'Absent without leave/permission,' this amounts to an act of misconduct in itself. Leaving aside the criminal case against him (as it is not connected with the place of work), I suppose the employer could have dealt with the situation just like any other case of 'Absent without leave' and followed the usual proceedings. If the employee had requested 'extraordinary leave without pay,' that could have been considered, and continuity of service could have been maintained. I fail to see why he was suspended in the first place, thereby having to pay a subsistence allowance for no plausible reason.

Regards

Handling Employee Indictment in Criminal Cases

As a devil's advocate, please behave as if you are unaware of what happened outside your premises. What you can do is show unauthorized absence and issue show cause notices, and prepare a file for a domestic inquiry.

If he is proved guilty, you have two reasons to terminate: one for unauthorized absence and one for being found guilty of a criminal offense.

If he is acquitted, you have only one reason: his unauthorized absence, as you have not received any communication from him or his family on his case. Suspension without any basic documentation may not be tenable in court.

Regards