Dear Om Chinmay,
Employees are paid for the duties they do during working hours. During working hours, they are expected to discharge their duties faithfully and diligently. While at work, they are expected to spend their time in the interest of the company. Attending an interview does not serve the interests of the company in any way, therefore, it is an act of impropriety.
However, how did someone come to know that an employee attended an interview while on duty? Is there material evidence? On discovery of the said action of the employee, did someone ask him/her to submit a statement in writing? If yes, then did the employee admit to having attended the interview? To initiate disciplinary action, you need to have material evidence. Disciplinary actions cannot be initiated on hearsay.
Now coming initiating disciplinary action. You will be able to take action provided you have approved and certified standing orders and not just that but what is impropriety is clearly defined as misconduct. In the list of misconducts, if the acts of improprieties are not defined, then you cannot take action under the provisions of standing orders.
If not standing orders, then what about the appointment letter? Has any code of conduct been defined in the appointment letter? If yes, then are their clauses related to "working in the interest of the company" or "working faithfully", "breach of trust" etc.? If yes, then you may take action under the provisions of these clauses in the appointment letter.
If you have material evidence of the misconduct, then issue a show-cause notice to the employee. Give him a chance to defend his case. If the explanation is not satisfactory or if no reply is received, then the administration of your company reserves the right to initiate disciplinary action. However, in such a case, the employee may be told to resign. However, while telling him, ensure that he/she does not record the conversation. Officially, it should appear as a normal separation from the company.
Thanks,
Dinesh Divekar