Legal Dilemma: Can an Employee Be Dismissed Before Court Judgment on Theft Charges?

Case Overview

The residence of the workman was raided by the Police Department under the benefit of doubt by the employer due to the possession of establishment property. A suitable search warrant was sought, understanding the complications of the lost goods. An FIR was registered, and the case was taken to court under IPC 378. The case is awaiting judgment. Meanwhile, the employee was placed under suspension under Sec 2(g) of the Subsistence Allowance Act and called for a domestic enquiry for disciplinary proceedings. The delinquent employee has not attended the enquiry and requested to postpone the enquiry until the judgment of the trial case. The employer subsequently sent several call letters to the employee for attending the enquiry, and it was further treated as ex parte. The employee was dismissed since the tenure of suspension escalated for 260 days.

Questions for Consideration

a) Since the domestic enquiry and the case under trial are based on the same facts, can the employer dismiss the employee before judgment since it is not proved?

b) If he could not be dismissed, should the employer pay 100% subsistence allowance? Refer to Sec 10A of the Industrial Employment Standing Order Act 1946.

c) If that is the case, what would be the cost if the judgment prolongs? This is a matter of penalizing the employer for the misconduct of the employee. To prevent this, what is the legal route?

I request the seniors to clarify the above.

Dear Dinesh, Simultaneous initiation of disciplinary proceedings and a criminal case in a Court of Law against the same employee based on the same facts of misconduct is certainly a very tricky situation. The purpose of the disciplinary action taken by the employer regarding any serious misconduct is to determine whether to retain the services of the employee within the organization. However, the Criminal Court requires adequate evidence beyond any doubt to convict the accused person. Upon a thorough evaluation of the evidence presented, the Court may either acquit the accused due to the benefit of the doubt, exonerate him of the charges, or convict him. In such a scenario, regardless of the employer's decision on the punishment following the disciplinary proceedings, it must abide by the verdict of the Criminal Court. Therefore, the employer should await the outcome of the pending criminal case. There are numerous judgments available on this topic online. I hope this helps clarify the situation. Let me know if you need further assistance.

Best regards, [Your Name]

Thank you for your suggestion, sir.

Once the employer is made to wait for a judgment that prolongs for more than 1 year, they will be in a position to pay 100% wages as a subsistence allowance. This is more prejudicial and will create a coercive situation for the employer. How should one face this scenario?

Criminal Proceedings and Domestic Enquiry

In simultaneous criminal proceedings and domestic enquiry proceedings on the same charges of misconduct, if the court acquits an employee of an organization, the employer is at liberty to award punishment of dismissal to an employee, depending on the gravity of misconduct, after due compliance with the departmental/domestic enquiry following the principles of natural justice as laid down in the standing orders applicable to the employee. Criminal proceedings and domestic enquiry are two different processes, with the former following the law of evidence and the latter based on facts.

Case Study: R.K. Solanki vs Central Bank Of India

The MP HC held in R.K. Solanki vs Central Bank Of India on 7 February 2018, upholding the action of the employer in dismissing an employee for the same charges of misconduct despite being acquitted in a trial court. This saw further hierarchical appellate proceedings by both the employee and employer, culminating in the orders of MP HC which upheld the dismissal orders of the employer.

Citations Relied on by the HC of MP

- The Indian Evidence Act, 1872
- Article 226 in The Constitution Of India 1949
- Union Of India vs Sardar Bahadur on 29 October 1971
- R.S. Saini vs State Of Punjab & Ors on 9 September 1999
- The Industrial Disputes Act, 1947
- Jagjeevan @ Jage Ram vs Airport Authority Of India on 12 July 2019

Advice on Dismissal Order

As regards your second question, in view of the aforesaid judgment, I am of the view that it will be in order for you to go ahead with the dismissal order without necessarily waiting for the outcome of the court, which is not only time-dragging but an unnecessary adjunct to the outcome of your departmental enquiry.

Regards, Panchsen

P. Senthilkumar
[Email Removed For Privacy Reasons]
[Phone Number Removed For Privacy-Reasons]

In continuation of my immediate previous post, let me add that regarding the payment of subsistence allowance, it is a statutory obligation for the employer to pay the specified amount of subsistence in terms of a percentage of salary or wages, depending on the duration of the inquiry, i.e., from the start to the close of the inquiry.

Panchsen

P. Senthilkumar