"Misconduct" is the label employers reach for when they want to avoid notice and compensation, because punishment inflicted by way of disciplinary action is carved out of the definition of retrenchment. The label only works if the process behind it was real, and the process is where most of these dismissals fail.
What a proper disciplinary process looks like
- A written charge sheet setting out the specific act alleged, when and where it happened, and the rule or standing order said to have been breached. A charge framed as "loss of confidence" or "unprofessional behaviour" without particulars cannot be answered, and an unanswerable charge is the first defect.
- Disclosure of the material relied on before the enquiry, not at it: the complaint, statements, access logs, CCTV, emails, audit findings.
- An enquiry officer who is not the complainant, the witness or the disciplinary authority. The same person occupying two of those roles is a recurring and fatal defect.
- An opportunity to be present, to hear the evidence, to cross examine the witnesses and to lead your own. An enquiry conducted on documents alone, or in your absence without proper notice, is vulnerable.
- A reasoned enquiry report, furnished to you, and an opportunity to respond to it before the punishment is decided.
- A punishment proportionate to the misconduct found. Dismissal for a first and minor lapse is open to challenge on proportionality even where the misconduct is proved.
Section 39 of the Karnataka Shops and Commercial Establishments Act, 1961, which the labour codes did not repeal, says that no employer shall remove or dismiss an employee with not less than six months of continuous service except for reasonable cause and unless one month's previous notice or pay in lieu has been given, with a proviso that the notice is not required where misconduct of an employee is brought on record with proof at an enquiry held for the purpose. An employee removed or dismissed has a right of appeal to the prescribed authority on the ground that there was no reasonable cause, or that he was not guilty of the misconduct as held by the employer.
The structure of that provision repays reading. An employer who dismisses for misconduct without holding an enquiry cannot claim the proviso, and therefore owes the one month's notice or pay in lieu at the least. And the appeal is expressly available on the ground that the misconduct was not made out, so the appellate authority is not confined to procedure. Where the employer will not reinstate, the authority may award compensation, capped at one month's pay for every year of service, and a person aggrieved by that order may apply to the District Judge for revision. Two cautions: the Act does not apply to persons occupying positions of management, and once compensation is awarded under that section the same claim cannot also be taken to a civil suit.
If you are a worker under the Code
- The route is an industrial dispute: conciliation before a conciliation officer, and on failure an application to the Industrial Tribunal, which can order reinstatement with back wages.
- Where a Tribunal directs reinstatement and the employer takes the award to the High Court or the Supreme Court, the employer is liable to pay full wages last drawn during the pendency of those proceedings, on an affidavit by the worker that he has not been employed elsewhere in that period.
- The Code prohibits any employer from committing an unfair labour practice specified in its Second Schedule, which is the provision to use where the "misconduct" was a pretext for victimisation.
- In an establishment with three hundred or more workers, certified standing orders govern what counts as misconduct and what procedure applies, and a dismissal in breach of them is challengeable on that footing. Below that threshold the appointment letter and the HR policy do that work, which is why our guide on what an Indian employment agreement should contain is worth reading before you answer a charge.
Conciliation cannot be held more than two years after the dispute arose, and an application to the Tribunal must follow within ninety days of the conciliation officer's failure report. The appeal period under the Karnataka rules is far shorter and runs from the dismissal, so check it in the same week. And do not accept the offer to "resign instead, with a clean letter". A resignation removes the dismissal that every remedy above is built on. If you are pressed, record in writing the same day that you were asked to resign, that you deny the allegations, and that anything you sign is under protest.
What to ask for, in writing, immediately
- The charge sheet and the specific allegation, with dates
- The complaint and all statements or material relied on
- The name of the enquiry officer and confirmation of his role in the events
- The enquiry report and the findings
- The show cause notice, if any, and the order of punishment with reasons
- The standing orders or the policy said to have been breached
A refusal to supply these is itself evidence. Where the alleged misconduct is outside work or a second engagement, read our note on moonlighting and dual employment in India before replying, because the answer differs sharply depending on whether the work was during or after the employment and whether the employer's resources were used. For the remedies in sequence and the forum for each, see our guide on wrongful termination and employee rights in India.