Legal Dilemma: How Should We Handle a Manager's Termination Over Confidentiality Breach?

Dear All

I am immensely happy for the response received for my queries posted in this forum.

I thank you all for support and confidence given for my posts. There is a legal issue which is pending in our company. I request our august members to share their knowledge in this typical case.

The Management has terminated the services of a Manager – Business development who had put up two years of service, for the charges of pilfering / divulging the companies drawings / business informations and leaked to our business competitors there by our company lost orders worth of several crores of rupees. When the management came to know the fact that this person acting against the interest of the company and asked him to resign, he refused and then he was sacked. He raised a dispute under section 2A of the ID Act in the conciliation forum.

The management is of the view that he was served an appointment order where in the following clause strictly prohibiting an employee from divulging business information to any of the competitors.

Clause in the appointment order:

You should not disclose, publish of authorize anyone else to disclose or publish either during the term of employment or subsequent thereto, any confidential or secret information including, secret process, drawings, designs and formulae acquired in the course of your employment by the Company. You should not take with you without the consent of the Company any records or documents of a confidential character when you leave the services of the Company.

Further he was drawing Rs.30K at the time of termination and hence he cannot be treated as workmen under I D act.

With regards

Trisha

HR Professional

Hi, Trisha,

First of all, salary is not a constraint to check if he is a workman or not. If he does not have supervisory capacity, then he will be considered a workman. As you mentioned he is a manager, there must be a few persons who report to him. If this is true, then he cannot raise a dispute.

Regarding conciliation, let it proceed. It will have no impact, as soon the conciliation officer will provide a report stating that no conclusion has been reached. The matter will then proceed to the labor court, where the first step will be to establish if he is indeed a workman. Therefore, prepare well to prove that he is not a workman as he holds supervisory capacity. Next, try to gather documented information that can prove he has leaked sensitive company information. By collecting this information, you can easily justify his termination.

For further assistance, provide us with more data so that we can offer you a better solution.

Regards,
Nilendra

Dear Trisha,

As rightly pointed out by you, he cannot seek a remedy under Section 2A of the Industrial Disputes Act. The only option available to him is that he can file a civil suit claiming damages, alleging wrongful termination. As it is a time-consuming process, he may not prefer that option.

When initiating such actions, we should always issue a show cause notice to the concerned employee seeking his explanation. Upon receiving the explanation, we can terminate him, stating that his explanation is not acceptable and goes against the facts. Courts typically consider this aspect - whether an opportunity is given to the delinquent employee or not.

Although the employee may not prefer the option of filing a civil suit, we have to collect evidence and keep the documents ready to prove his guilt to make our case stronger.

Thanks & Regards,

Kalyan R
9840942232

Hi Trisha,

Do you have any proof for the leaking information he has done? Try to get through that; you will get some way to nail him.