How Should We Handle Employee Suspensions After a Night Shift Theft Incident?

Dear all, in one of our units, money was stolen by second shift (Night) employees. We have filed a police complaint and have given 4 days' time to all employees who were in the second shift, but we didn't get any outcome. We suspect 3 to 4 individuals. My question is, can we suspend the employees by giving a show-cause notice to all those in the second shift and ask them to stop coming to work until this issue is resolved? Please advise me on this matter and provide a draft copy of the show-cause notice for suspension from work. Please help me.

Regards, Ram

You cannot suspend people on mere suspicion. What is the basis of your suspicion? Was it company funds or individual employee funds? Has the company lodged a complaint, or is it an employee who has lost cash? The police will conduct an investigation to determine who the possible thief is.

Dear Sir,

We have lodged a police complaint as the amount belongs to the company. The police are conducting an investigation. In the meantime, can we suspend the employees working the second shift?

Regards,
Ram

Suspension Without Charges: A Risky Move

Without charges, you cannot suspend any employee. As already pointed out by Nathrao, is it the company fund that was stolen or that of coworkers? If any worker's fund was misappropriated and that worker has given you a complaint, then why did you inform the police to investigate it? You should have investigated and found the thief. If the police are involved, why should you suspend anyone? And if you suspend, will you suspend the entire second shift employees and the supervisors who were on duty on that day, shutting down the production? How long can you do so? You suspect a few workers, but how did you come to know that these would be the thieves?

The Importance of a Charge Sheet

Suspension should be followed by a charge sheet. Before suspending, you wanted to give each a show-cause notice. Now, what will you say in the notice? That you suspect them, and therefore they should show cause why action should not be taken? You have already taken action by lodging a complaint against your own workers for the theft that took place within the establishment. When you believe that some workers only would have taken the money, you should have taken it as your own responsibility to find the thief.

Ensuring Maintainable Charges

In order to make charges maintainable, you have to ensure that the charges are very specific with the time of theft, amount involved, witnesses, etc., and in the present case, I don’t think that you will be able to do justice to these basic procedures. I suggest, in the absence of any evidence to show that these 3 or 4 employees are the culprits, you should not initiate action against them. Moreover, since you have lodged a complaint at the police station, let the police investigate. Till then, you can allow the workers to continue as usual.

Regards,
Madhu.T.K

Clarification on Employee Suspension and Show Cause Notice

Your Query: Can we suspend the employees by giving a show-cause notice to all?

Kritarth Team Clarification: An employee or employees can be suspended from duty pending inquiry (departmental/domestic inquiry, as commonly referred to) only after or immediately after a proper charge sheet or charge sheets have been issued, clearly stating definite acts of misconduct (commission or omission) alleged against the employees concerned. Suspension pending inquiry entitles the suspended employees/workers to payment of subsistence allowance as admissible to them as per the certified standing orders or the service rules as applicable, until the inquiry in respect of the concerned employee is concluded.

When you are not sure and certain as to who allegedly stole the company's property, you should first conduct a fact-finding preliminary inquiry to ascertain prima facie whether there is enough evidence against specific individuals to proceed further. Do it now.

If you decide to stop any worker/employee from resuming duty, as you deem it an option, be aware that such an act may amount to layoff and consequent layoff wages, too.

We are a republic with the rule of law supreme. No employer ought to take arbitrary action in such punitive yet sensitive matters as stated. Our Supreme Court has time and again cautioned employers to refrain from punishing any worker/employee without giving him/her a reasonable opportunity to defend his/her actions as alleged and without holding a fair, proper, and just inquiry in accordance with the principles of natural justice.

Regards, Kritarth Team

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Bengaluru Office

21 March 2016

Investigating Employee Misconduct Before Suspension

There should be some material evidence before you raise suspicion against certain employees prior to suspending them. Acts like misappropriation or fraud may have documentary evidence to raise a prima facie suspicion against an employee. However, an act like theft may not have such documentary evidence. It shall be based either on circumstantial evidence or direct evidence, such as a witness observing the employee stealing. Therefore, as prudence demands, an investigation should precede the suspension of an employee to support it with some prima facie evidence.

However, employees can be suspended pending investigation, provided the rules of the organization permit it, since the objective of suspension is to protect the evidence from being tampered with by the suspected employees.

Regards, B. Saikumar

Neither can you issue a show-cause notice nor suspend an employee based on mere suspicion. You cannot prevent them from coming to work.

Thank you.

Difference Between a Police Complaint and an F.I.R.

Mr. Ram, in his query, clearly stated "logged Police Complaint." I think there is a vast difference between a Police Complaint and a First Investigation Report (F.I.R.). At any time, the complainant can withdraw his complaint, but when an F.I.R. is lodged, it can't be withdrawn even by the lodger. The lodger of an F.I.R. at any stage can't withdraw his F.I.R. because then the litigation continues between the respective State Government and the culprit.

In the above case, if only a Police Complaint has been lodged, the company can withdraw the Police Complaint and proceed with the procedure on its own. Mr. Ram, please confirm in your statement.

Regards, A. Prakash