Amount Mis-appropiated Is Due Towards Terminated Employee

Hi All,
I am working with a Bank .
We have so many cases in which employees are terminated after due process of Departmental Inquiry.
Thus the amount mis-appropiated is due towards terminated employee.
We have filed Recovery suit.
Some payable benefits are also pending with Bank ie. Gratuity, Leave Salary , Security Deposits of terminated employes etc.
But the bank has used word "salary and these benefits are attached" in termination order.
Now question before me is that, can we adjust the Payable benefits against the fraud amounts -as these amounts are attached by bank.
For adjusting accounting entries- we have to make debits to Salary & AllowancesAccount which effects on Profit of Bank.
Also it mean we have breaching the termination order ie."salary and these benefits are attached".
Thanks. Your views are Highly appreciated.
Posted 10th August 2015

Dear Friend,

An employee can be terminated on due completion of the inquiry and find the amount mis-appropriated by him is the cause of termination. So, final orders should have been passed with the direction to the authorities to recover the amount from payable benefits on termination or the orders passed on the date. This must have been clearly mentioned by the inquiry officer on his recommendation or passed by the appropriate authority to recover from the employee. As this is the case, you have full right to recover the amount from the employee from payable benefits. There is no question of withholding all benefits or attached without taking any action. In case the employee (terminated) goes to court to prove his innocence the case may take turns and twists, even then, the amount is being recovered for making good for the misappropriation and not to the benefit of the others personally in that case the inquiry and other issues arise. Kindly go through the final orders and effect recoveries properly accounting the same for the misappropriation...in the absence of such orders you may end up with dubious state, even you have no right to attach his financial benefits..(disciplinary proceedings for misappropriation/punishment there of)

best of luck...

DEAR NATHRAO,
Still the question remains before me is that, when the bank has used word " Attached" in final order of termination as a punishment , is it proper to give effect of showing payment done by debiting P&L Ac's and reduce the loss? Or it will be proper to recover the loss from the Employee separately ( without taking into consideration the salary or any other amount is payable with bank -as it is "Attached")

Dear Friend,
The word attachment is a tag, that the amount neither disbursed to the individual nor to be taken into account for making good of misappropriation. The absence of final orders this case seems to be pending (specifically for making good from the employee), kindly go through the orders again the authority who is passing orders might have given a chance to pay/remit the misappropriated amount to the bank, otherwise, they should have done with alternative arrangement of given time for recovery.
Also, kindly go through the order whether final settlements can be processed in the instant case, if that is the order such that/as such, certainly the authorities act in the way laid down.
Otherwise, better refer the full case to the legal department of the branch/get legal opinion on the orders for taking action, which will help the manager for a better decision.
best of luck....

Gratuity cannot be forfeited except for termination due to wilful ommission or negligence causing any damage or loss to, or destruction to property belonging to the employer, to the extent of damage or loss caused. You may forfeit the amount and amend your recovery suit to that extent