Employee Acquitted After Arrest: Should We Reinstate with Full Back Wages?

Employee Arrest and Suspension in 2011

In the year 2011, one employee was arrested by the police on criminal charges. The matter was solely between the police and that employee and was not connected with our office. However, due to the arrest, he was placed under suspension and remains under suspension, even though he was released on bail a few days after the arrest.

Acquittal by the High Court in 2018

Recently, in 2018, the Honorable High Court of Mumbai acquitted him. He is now requesting reinstatement with full back wages for the entire period of suspension since 2011.

Considerations for Reinstatement

Given the acquittal by the high court, is it necessary to take any disciplinary action, even though no inquiry or chargesheet was framed against him by the office after the arrest/suspension? If he is reinstated, should the period of suspension be considered as time spent on duty? Is he eligible for full back wages after adjusting the subsistence allowance?

Thank you.

Get the help of a labor lawyer, as the management was not involved in his crime or arrest. The management had to issue a Show Cause Notice (SCN) for his absence from duty, failing which the management had to suspend or terminate. A labor counsel can provide better guidance after studying the full history.

Dear Yusuf, The suspension of the employee in 2011 by the Management under its disciplinary power seems to have originated from the arrest of the employee for a criminal act unconnected with his employment under the management in any way. It could have been revoked as soon as he was released on bail. On the contrary, the Management thought it proper to keep him under suspension until the disposal of the criminal case. Therefore, disciplinary action had already commenced with the orders of the employee's suspension as well as its continuation until 2018, though no charges were framed so far. It is also not known how the employer got the information of the arrest of the employee. Therefore, initiating disciplinary proceedings on the ground of absence now, after a lapse of 7 years, cannot stand judicial scrutiny.

Moreover, the cause of action for the suspension ordered and continued has become nullified by the acquittal of the criminal charges by the High Court.

Needless to point out that the power of suspension vested with the employer has to be exercised very judiciously. Only when there are sufficient reasons to believe that the continuance of the delinquent employee on the job would hamper the disciplinary action or the misconduct is of such a grave nature that immediate suspension of the individual would act as a deterrent to others, suspension can be a right prelude in any disciplinary proceedings.

Therefore, my humble opinion is that the Management should avoid precipitating the issue any further at this stage. Let them consider revoking the suspension forthwith and paying him full wages minus the subsistence allowance already paid, with attendant benefits like regularization of the entire period of suspension as duty, sanction of annual increments with retrospective effect. No harm in legal consultation as suggested by the other learned friend.

Management should have taken legal advice at the time of arrest and subsequent release on bail. Keeping him suspended for so long and now talking of action is not in order. On what grounds will the company take action in a case where he has been acquitted? The company is bound to take him back, pay back wages, and reduce the subsistence allowance paid to him.

Respectfully, I am thankful to Sharma Sir, Umakanthan Sir, and Nathrao Sir for their kind guidance, which will definitely help in ensuring justice by the employer towards the employee.

One thing I am still unaware of is whether the suspension of an employee can be revoked after he has been granted bail by any Honorable Court, despite the arrest/detention by police exceeding 48 hours and a criminal case pending with the court.

Second Instance of Employee Arrest and Suspension

This is the second instance in our office where an employee was arrested by the police. One was arrested in the year 2000, and their suspension continued until 2013, i.e., only after acquittal from the Honorable High Court. Although he was released on bail soon after the arrest, he was kept under suspension until the final outcome of the case.

Now, this is the second case. In both instances, employees have been kept under suspension during the pending court cases against them.

So, is there a provision to revoke the suspension after bail, despite the fact that the employee's arrest exceeded 48 hours and the court case is pending?

The "Panacea" suggested by Shri Umakantan is the only available option for the employer/management/appointing authority in the circumstances stated by Mr. Yusuf. Our apex court has maintained the non-negotiable prerogative/right of employers to initiate appropriate disciplinary action, including suspension pending inquiry, after the employer has applied his/her mind and found it expedient to issue the charge sheet, followed by a letter of suspension pending inquiry, which is a prerequisite step. Issuing a proper charge sheet to the concerned employee, stating the reason/act of misconduct (alleged), which in this case would have been "Unauthorized Absence from Duty" as per the standing orders or service rules applicable to the person.

Better late than never, lesson learned for future decision-making. The employer's act may be termed as "arbitrary," causing immense inconveniences, suffering, and loss to the suspended employee (who happens to still be and remain on the muster rolls of the establishment).

Let the decision-makers be effective so as to take the right decision right, the first time, every time.

Sharan, Kritarth Team of Learner-Managers, 13.9.2018

Dear Yusuf, First, let us know whether the suspended employees were just let on bail by the High Court or acquitted of the entire criminal charges filed against them by the police.

Second, in what way are you interested in this case—as an affected employee, as a well-wisher, or as an HR professional?

Whatever your answers might be, I hope honestly that my following further reply would suit the cases of suspension or termination of the services of any industrial employee in case of his arrest and custody by the police or any other competent authority for his involvement in any criminal act/offense as well as his subsequent final conviction or acquittal by any competent court of law.

Employer's right to initiate disciplinary action

First and foremost, the employer's right and power to initiate disciplinary action against any of his employees are not at all unlimited. In fact, they are restricted to the zone or sphere of employment as much as they correspond to the acts specifically enumerated as misconducts in the Standing Orders or Service Regulations applicable. However, the Model Standing Orders provide for the suspension of an employee when criminal proceedings against him in respect of any offense are under investigation or trial, and the employer is satisfied that it is necessary or desirable to do so. In other words, it is a power of discretion of the employer well-defined by the parameters/factors of necessity and adverse implications on the establishment. Therefore, no knee-jerk reaction is expected from the employer or his HR team. Much consideration is to be given before placing an employee under suspension for his alleged involvement in a criminal act outside the zone of his employment and his police custody because he has to be paid a subsistence allowance until he comes out on bail or is acquitted of the charges in case his suspension continues as in your examples.

Revoking suspension

I am quite unable to understand why you are searching for specific provisions to revoke suspension. The power to revoke suspension when the necessity for suspension is no longer present is well-ingrained already in the power to suspend.

Dear Colleague, very well stated elaborately by Mr. Umakanthan, Sir. You had the right to frame charges as per the Standing Orders against the employee and hold an independent inquiry simultaneously with the criminal proceedings, which you failed to utilize for seven long years. Your suspension was perhaps until the criminal proceedings were concluded, which has happened, and the employee is acquitted. At this stage, your option is to revoke the suspension, take him back with continuity of service, and pay him full back wages from the date of suspension till his rejoining, less the suspension allowance already paid.

Regards, Vinayak Nagarkar HR Consultant

Sir, since I am dealing with the Establishment Division, I need to process the file keeping many aspects in view.

The suspended employee, who was arrested in 2011 and later granted bail, has since been acquitted of all charges by the Honorable High Court at the end of July 2018.

Dear Yusuf,

Please obtain a written representation from the employee along with a certified copy of the High Court's orders for the revocation of his suspension and immediate reinstatement with all attendant benefits. Submit a note to the relevant authority or the CEO, as applicable, explaining the aforementioned legal position and requesting appropriate orders.

The employer made a gross mistake by keeping the person on suspension for 7 plus years for an invalid reason. The grounds of the employee are justified; he is right to receive the back wages.

In the above case, the employee has been reinstated with full back wages and all benefits as spent on duty. He is being given arrears on each yearly increment as well.

Now, whether Earned Leave and Half Pay Leave shall also have to be credited on the 1st of every January and July since 2011?