Chit Fund Scandals in the Workplace: How Can HR Address and Prevent Them?

Dear All,

In our factory, some employees are involved in chit fund scandals. What do labor laws say regarding these issues? As HR professionals, how can we stop this process inside the factory, and what necessary actions should be taken?

Please guide me to solve this problem.

Regards,
G. Arularasan
8148883009

Dear Arularasan,

Your description of the alleged act of some of your employees is not clear to me. Are they involved in any Chit Fund business within the establishment or are they involved in any Chit Fund scandal outside the zone of their employment? Is the act of money lending to fellow employees as a business in any form, including Chit Funds within the premises of the establishment, specifically enumerated as misconduct in your certified Standing Orders?

Kind regards

If the act allegedly committed by the employees comes within the purview of 'misconduct', then you have to issue a warning/show cause/charge sheet as per the gravity of the situation. If things do not get resolved, then you have to initiate disciplinary proceedings against such employees and take necessary action based on the report of the inquiry officer.

In all its fairness, a stipulation prohibiting the chit fund business is necessary in the Certified Standing Orders to dispense with such practices. However, missing such a provision doesn't stop an employer from taking disciplinary action against employees involved. Employers are at liberty to take action against employees who engage in any "private business" within the premises of a factory. A general notice may be issued advising them to refrain from such practices. If they still continue with the practice, disciplinary action should be taken against the organizer(s) without any hesitation.

Regards, BS Kalsi