Can We File a Police Complaint Against an Employee Who Absconded with Company Funds?

Dear All, please advise if the company can file a police complaint against an employee who has absconded with the company's money. Here are certain other facts related to the matter:

1) The absconding employee's salary for the preceding month has not been paid.
2) The absconding employee has joined a competitor company.
3) The company has sent him a formal show-cause notice explaining why he should not be terminated for dereliction of duty, uninformed absence, and non-deposit of company collection money.
4) No response has been received to date, and it has been almost seven working days since the dispatch of the Registered AD letter; hence, as of now, the employee has not yet been terminated.

If the amount due can be recovered from his salary, then are we still within our rights to file a police complaint for theft and cheating?

Please guide.

Regards, Anuradha

Non-deposit of company money is a serious offense

What were the duties of the employee? For how long was the company's money not deposited into the company's bank account? Has the company kept any security deposit or fidelity bond since he was handling cash? First, work out how much money was to be deposited and quantify the amount. The police, while accepting the complaint, are going to ask for proof that the employee was holding company funds or collections. Conduct an inquiry (ex-parte if required) to determine the amounts held with the employee and for the termination of service due to theft and absconding from duty. Send a copy of the notice of the inquiry to his registered address by Speed post and also by SMS on the declared mobile number so that the employee cannot claim a lack of knowledge of the inquiry.

Employees dealing with cash collection/handling can be covered by an insurance policy.

I had taken fidelity insurance on the manager of my housing society who used to collect monthly charges from all owners for monthly society charges.

The company will lay down certain conditions on which they issue a fidelity bond.

It is worth taking such bonds.

Fidelity insurance policies/bonds can cover the employer from such absconding cases or irrecoverable amounts. This is only an assurance for the employer's money.

Employer's liability of checking the employee's background comes into the picture in these kinds of situations. It is better to hire employees after due verification and thorough checks, rather than solely relying on a fidelity policy.

Thank you for your inputs. However, I still have a query: if the money can be recovered from the salary or other employee dues besides EPF, can the company lodge an FIR? The management is concerned that if such theft occurs and all the company does is recover from the absconding person, it may start a nefarious practice among other employees.

Background checks

Regarding background checks, we conduct a thorough investigation. In the case at hand, the employee had been with the company for the last two years without any negative feedback or reports.

Please suggest the next best course of action, as the accused employee has also declined to accept the show cause notice sent to him by speed post.

"However, I am still having a query that if the money can be recovered from the salary or other employee dues besides EPF, then too can the company lodge an FIR."

Answer is YES. Theft is theft once proved. FIR can be lodged.