Company sacking me (not following code of conduct) - helping employee with money (small loan)

Sometime back, I helped a junior employee of the company by giving him 10K as a loan on a returnable basis. When HR came to know of this, HR said that I am running a money lending business. I showed my account details, and they found nothing fishy. Now, they have put an allegation on me that I don't follow the code of conduct, which states that if I give or take money from any employee, I should bring it to the notice of my reporting manager.

I told them I have not received any code of conduct, but HR said that it is posted on the notice board in the common area, and if I didn't see it, that's not HR's problem.

I also discovered that they want to terminate me for such a small thing by stating that I don't follow the code of conduct. What should I do - should I resign, or wait for them to terminate me, and then go to the labor inspector to file a complaint against the company?

Dear Sampat,

Had you reproduced the relevant clause of the Code of Conduct, it would have been easier for us to give a proper response. Giving some small amount of money to a friend who happens to be a colleague as a hand loan cannot be considered money lending or usury to warrant disciplinary action by the employer. When your HRD is known to be so strict and the particular HR person is such a loyal watchdog of compliance with the Code of Conduct by all and sundry, what prevented you from intimating the fact? I don't think this is a proper reason warranting the extreme punishment of termination of any individual's employment. What about the gentleman who borrowed the sum? Was he also served any such notice?

Under the employer's roof and during employment times, personal discussions should be avoided. If you have lent money, how has it been communicated to HR? Now, if your so-called friend has approached HR or anyone else, like you, for money, stating that it is a repayment to you, the issue of SCN for a breach of the code of conduct arises.

Hi,

The clause is as follows: In the event of any favor being received or extended in the context of an emergency (e.g., a medical emergency), the occurrence of such a favor being received or extended should be reported to the duty manager by the employee.

The clause is part of the code of conduct. I informed my duty manager, but HR only found out now, after my life. They terminated me on Monday, but I am not planning to go back to work. What advice can you offer, sir?

Thank you.

I think you have left out the opening part of the clause, for it seems very vague. Precisely speaking, the act of money lending as well as borrowing among the employees within the premises of the establishment can be prohibited by the employer. Such an act done by the employees outside the zone of their employment, that too out of their personal acquaintance or friendship, cannot be questioned by the employer as a subject matter of his disciplinary control over them. Certainly, the inclusion of such a clause in the code of conduct cannot be a proscription on borrowing or lending by employees outside the sphere of their employment among themselves as ordinary members of society. The actual reason for your termination may be something else, for I don't want to underestimate the reasoning capacity or common sense of an HR.

Better make a personal representation to the CEO of the establishment. In the event of such an appeal proving to be futile, raise a dispute under 2-A(1) of the Industrial Disputes Act, 1947 if you were a workman; if not, file a Civil Suit against the management for wrongful dismissal and claim damages.

Dear Colleague,

Even going by the relevant clause of the COC, giving or receiving a monetary favor is not prohibited. The only thing is it should be informed to the reporting manager, which you have failed to do. This is a very minor aberration, and the punishment of termination is out of proportion and unwarranted for such a lapse.

You should make a written appeal to the CEO, as suggested by Mr. Umakanthan, apologizing for your minor lapse, and request him to take you back into service. If your appeal is not heeded, knock on the doors of legal remedy by engaging a good labor lawyer. The law is on your side, and sooner or later, the victory will be yours.

Regards,
Vinayak Nagarkar
HR Consultant

Dear Sampat,

Is there any code of conduct in your establishment that disallows monetary help among employees? If not, then your management is biased, and someone in HR is playing a foul game, or the person whom you helped might have made a complaint.

Forget about the code of conduct displayed in a conspicuous place on the notice board. Is there anything in your appointment letter specifically mentioning the COC? Your HR is wrong; any documents like the code of conduct or policies should be handed over to the new employee on the day of joining, not expecting them to search for it on a notice board around the premises.

In my suggestion, you are well-placed to challenge if they terminate you. You should be prepared to teach a lesson to your HR by challenging your termination. In simple terms, one cannot be sacked or terminated as and when they wish.

Dear Sampat,

I manage HR for an MNC and have come across many cases of money lending among employees. I choose not to intervene beyond counseling upon complaints unless it hampers the office environment. The only time I acted on such an issue was when two employees got into a fistfight over a money dispute, and one of them was seriously injured. Consequently, we had to terminate their services for "violence" in the workplace.

I really don't see anything wrong with this approach, unless we are dealing with serial debtors or lenders earning interest from fellow colleagues. If the accusations against you do not fall into the aforementioned categories, you can approach the management for a fair representation or seek other available remedies as suggested by respected Shri Umakanthan Ji.

Regards,
Rahul Chhabra

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