How to Handle a Court Case After Employee Disputes Forced Resignation Over Missing Materials?

Dear all,

I had an employee who was working as a General Manager. A few months back, there was an incident involving the loss of raw material. When he was questioned and asked to reply within three days about the incident, he showed his ignorance and stopped coming to the plant. We have not approached the police for this as it was under a value of 8000.

After 15 days, we received a court notice stating that we forcefully asked him to leave the organization. We also replied through a lawyer, and the case has started. I wanted to know what the actual rights of that person are and how I should proceed further to resolve this case. Please suggest.

Dear Savioncare, you found the deficiency in the raw material. How did you discover it? Was it discovered during the stock audit? What kind of stock audit was it - monthly, quarterly, or half-yearly? Was it conducted by a third party? Did the auditors obtain the statement from the stores in-charge?

You had questioned the General Manager (GM), but then he stopped coming for his duties. However, a follow-up was required on two counts. One was to order an inquiry into the shortage of materials in the stores, and the other was to issue a notice to the GM regarding his unauthorized absence. Did you take these actions?

About Shrinkage of Stores

What is the total stock value at your stores, and what kind of material was found deficient? Sometimes, there is a natural reduction in quantity, such as in the case of fuel and lubricants. Have you defined the percentage of that?

Shortages in inventory also occur due to excessive issuance of materials to the operations or production department. Upon discovering excess receipts, they should be promptly returned to the stores. However, many store personnel lament that this does not happen. Therefore, upon discovering material shortages, did you reconcile the material issue with the production department?

Sometimes certain materials wear out and become unusable, like corrosion of nuts and bolts. This obsolete material can be disposed of, but before doing so, a committee should be formed for condemnation. Have you taken this step? Is it possible that the obsolete raw material was disposed of, yet the records in the book inventory were not updated?

Therefore, the question arises: Have you conducted a shrinkage analysis of the material? Inventory accuracy is often a challenge in many stores, with discrepancies between book inventory and shelf inventory. What is the inventory accuracy percentage in your company?

There are numerous questions associated with your post. Please provide comprehensive information. Lastly, as the matter may end up in court, you need to be prepared to defend it. Nevertheless, if you had conducted an inquiry into the shortage of raw materials and the absence of the GM, your case would have been much stronger. It seems that the lack of administrative procedures has put you in a difficult position.

Thanks,

Dinesh Divekar