Can Management Refuse a Resignation Amid Theft Allegations? Seeking Expert Advice

Dear Experts,

One of the employees is involved in the theft of company properties and is currently undergoing interrogation or, to say, in the preliminary inquiry process. Meanwhile, another employee has submitted a one-month notice of resignation, but there is also suspicion of involvement in the theft incident by the resigning employee. I request expert views on the following:

1. Can the management deny acceptance of the resignation letter from the employee who submitted resignation?
2. Is it necessary for the management to accept the resignation and release the employee upon the expiry of the notice period?
3. If the resigned employee does not report for work after submitting resignation, what course of action should be taken against them?
4. If we accept the resignation, can the Management state in the relieving order that the relieving is without prejudice to reserving the right of the Management to take legal criminal action, if any, if the employee's involvement in theft is noticed after the conclusion of the preliminary inquiry process?
5. Any other valuable suggestions, please.

Thanks and regards,

V. Sridharan

You can accept the resignation on one condition, i.e., the relieving is pending a decision by the disciplinary authority. This will send a message that he cannot get an easy walkover, but his exit will depend on the decision of the disciplinary authority, for which he should be available and should cooperate. If he absents himself, then his relieving will not happen. At the same time, if he cooperates, the inquiry will happen in time, and if he is found not guilty, he can get relieved with a very good endorsement of his good service. But if he does not cooperate, the decision will have to be taken ex parte, and he would be terminated based on the reports. This will certainly spoil his career. Therefore, educate him on the consequences.

Hi, Until the completion of the notice period, the employment relationship, including all rights and obligations, exists. Therefore, an employer can pursue disciplinary action against the employee. The proceedings must, however, be concluded within the notice period; that is, the employee must be heard, and judgment delivered to validate the findings of the process. If the employee is found guilty before the notice period's expiry, and the employer terminates the employment contract, such termination will be reflected as a dismissal and not resignation.

If the employee is relieved after the completion of the notice period, there is no longer an employee-employer relationship to support any disciplinary proceedings.

The response to your queries is as follows:

1. The resignation can be rejected when a disciplinary inquiry is in progress or is contemplated. This is the general law on the subject.

2. It is not necessary for the management to accept the resignation; the management can reject the resignation and state the reasons for the same.

3. Reply to the employee rejecting the resignation, ask the employee to return to duty, and clearly state that the absence is unauthorized and a separate action could lie for it.

4. Yes, it can be mentioned so. But it will not be a solution to the problem.

5. It is necessary to take strong action in such matters; otherwise, it sets a bad precedent, as though anything can be done and on the verge of being caught, submit a resignation and get away from the scene. This will not be a decisive action. Expedite the preliminary inquiry and decide the matter accordingly.

Dear Sridhar,

A contract of employment can be unilaterally terminated by an employee at their will through a formal resignation, subject to compliance with the exit clause. The employer has no discretion in this regard unless certain charges of misconduct are either contemplated or pending, or if the employee's services are highly indispensable for the time being in the interest of the organization.

From your narrative, it is discernible that the employee who has submitted their resignation has not yet been indicted in the theft charges, either as one of the offenders or as an accomplice. However, their sudden resignation raises doubts about whether they might have been involved in the offense and could be resigning to avoid any disciplinary action. Mere suspicion cannot take the place of proof. The value of the property stolen, whether the theft was a single attempt or occurred on different dates by the employee against whom the preliminary inquiry is in progress, the probability of connivance on the part of the resigning employee due to their official position and relationship with the accused, etc., are factors that arouse such suspicion. Therefore, the employer cannot reject the resignation merely because its submission coincides with the inquiry into the theft of the company's property by another employee.

In the absence of concrete evidence, if the resignation is rejected and the employee is also indicted, it would amount to coercion. On the other hand, if the resignation is accepted conditionally as mentioned by Mr. Madhu, the employer loses disciplinary control over a resigned employee except upon charges of monetary loss or damage to the employer's property if it comes to light later. Even the employee's formal and peaceful separation cannot bar their conviction in criminal proceedings instituted against them later.