How Should We Legally Handle Terminating an Employee After Losing a Client Due to Negligence?

Dear Senior, I am writing to seek guidance on the termination of an employee whose negligence at work has cost us a big client. This employee has made mistakes in the past for which he was given a few verbal warnings and one written warning. However, at this point, due to the loss of the client, we want to terminate this employee. Can you help with the correct process we should follow to adhere to the statutory laws? Thanks.

Dear Roshni,

If, due to the employee's negligence, the company has suffered losses, then you may order a domestic enquiry. Please note the following while conducting the domestic enquiry:

a) The focus of the enquiry should be on 'what happened' rather than 'who did it.' The Enquiry Officer (EO) should not conduct the enquiry with prejudice.

b) The EO should find out whether only one employee was responsible for the loss of the company's client or if there were other employees involved in the incident.

c) Why didn't the employee's reporting manager intervene timely? What is their accountability?

d) If not the reporting manager, why were there no safeguards to avoid the loss? Is it that the safeguards were there, but they were not followed?

e) During the enquiry, give the employee a chance to defend their case.

If misconduct is proven during the domestic enquiry, then issue a show-cause notice to the employee. While issuing the show-cause notice, quote the exact chapter number, paragraph number, and clause number where the misconduct is listed.

If the reply to the show-cause notice is not satisfactory, the management can award a suitable punishment.

Thanks,

Dinesh Divekar

First, check your internal documents, standing orders, and Conduct & Discipline rules. If there's an effective one, it will help you organize the Domestic Inquiry. If you are from HR, following the Standard Operating Procedure (SOP) is required. If you have no such document, then consult your advocate for guidance.

Process of Handling Employee Termination

The process should commence with the receipt and registration of a formal complaint from the concerned department, specifying the errors of omissions and commissions, and clearly pointing out the alleged employee, attributing the loss to him. Following this, the process will begin with the appointment of a Presiding Officer and a Presenting Officer formally by the Competent Authority. Consider 'suspension' pending the inquiry.