Why Do MNCs Prefer Resignation Over Termination for Gross Misconduct Cases? Seeking Clarification

Dear Advisors,

Why do many MNCs ask employees to resign instead of terminating them when they are found guilty of gross misconduct? Does this rule apply to all violations? Does it depend on HR's decision? Can someone please provide clarification?

Thank you

Dear member,

Once the senior authorities decide to investigate an employee, they hand over the matter to HR. If an employee engages in misconduct, they are required to follow a complete disciplinary process. The critical aspect of this process is to conduct a domestic inquiry. To avoid taking this long and demanding route, they may ask the employee to submit a letter of resignation.

Furthermore, when accepting the resignation letter, they instruct the employee not to disclose the actual reason but to state the reason as 'personal'. By doing this, they maintain a semblance of normalcy in the separation process.

Asking an employee to resign is common practice not only in multinational corporations but also in Indian companies.

Thanks,

Dinesh Divekar

Thank you, Dinesh Divekar Sir, for your insights.

In regards to one of your comments in a post, does decision-making in cases of gross misconduct vary? Also, which one is more critical, PoSH or just accessing data, something that one should not do? Like you said, comparing the two is not ideal, but I am asking to have some confirmation.

Thank you

Dear member,

The punishment is decided based on the gravity of the misconduct. Whether under the PoSH or due to the breach of data security, if the misconduct is minor, the accused may be given a minor punishment. However, if the misconduct is serious, the punishment could be termination of services.

Other factors that influence the decision-making process include the length of service of the accused, the relationship of the accused with the HOD, their performance, whether the employee possesses unique skills, and whether the misconduct was a first-time occurrence.

Thanks,

Dinesh Divekar