Can We Still Take Disciplinary Action for Fraud That Happened in 2014? Seeking Advice

Respected Seniors,

If misconduct involving fraud occurred in November 2014, can we take action in May 2016? This is a simple question, but I am confused. Management is asking me to take action. What should I do?

Regards,
Abhay Ashtoorkaer

Dear Abhay,

Serious misconduct, such as fraud, committed by an employee during the course of their employment does not automatically get extinguished by the passage of time. The actual time of detection of the misconduct is equally important. Generally, misconduct like fraud would only be exposed when the consequences begin to surface. Therefore, the date of detection of the misconduct would justify any belated disciplinary action, unless it is restricted by the service rules of the establishment.

What is the nature of fraud committed? As the learned member above states, fraud charges do not become invalid just because time has passed and there is a delay. So, the importance of the nature of fraud, how and when it was discovered become relevant. Give the employee a full opportunity to defend himself. Upon conclusion of the inquiry, if he is found guilty, management can take appropriate action. Delayed punishments and inquiries do not, in general, look good and have full effect.

Importance of Timing in Fraud Discovery

As already mentioned, the time of discovery or detection of fraud is very important. Assuming that the fraud took place two years ago and you discovered it one month ago, you can easily take disciplinary action. However, if the fraud was discovered two years ago and you remained silent, then your grounds become weak. Nevertheless, you can still initiate an inquiry provided that you have sufficient grounds to cover such a long delay of two years. If this is a serious issue, consult a labor lawyer with documents before proceeding further.

Check out my blog at www.labourlawhub.com

Keeping quiet for a long time can indicate condonation of fraud. In this case, the delay is nearly 2 years. It is important to consider the reasons for waiting so long to initiate action. Fraud is a serious irregularity that requires immediate action, including inquiry and appropriate punishment. The employee in question may attempt to use laches as an excuse to avoid facing the consequences of their actions. It is advisable to proceed with caution and carefully consider all perspectives before taking further steps.

Dear Abhay,

Whether fraudulent or not, any misconduct at any time during an employee's service period warrants disciplinary action against them.

Thank you.

Action for Misconduct

Action for misconduct can be initiated during the period of an employee's service at the earliest opportunity when it is detected. Since the word "fraud" has been used, it means there was grave misconduct involving a loss to the company. The loss may be in monetary terms or in any other form, such as damage to the company's reputation. The management must have sufficient material evidence on record to prove the charge. The company may consult a subject expert. It is not necessary that they be an advocate, but they must be a professional with a sound knowledge of disciplinary proceedings.

If the company decides to conduct an inquiry, it may appoint an inquiry officer and a presenting officer and afford the employee an opportunity for defense. The employee will also be given an opportunity to engage a Defense Assistant during the inquiry, but they will not be a practicing advocate.

If you would like, you can have the charge sheet vetted by me. The success of the charge sheet mainly depends on the sufficient evidence available on record with the company. Relevant witnesses will also need to be identified to support the charge during the inquiry process.

Regards,
srivastavacmlal