DISCIPLINARY ACTION PROCEDURE

01. Prologue
In the interest of maintaining good order and discipline in his establishment en employer has
in inherent right to suitably punish a delinquent employee. However, with the emergence of
modern concepts of social justice, this inherent right has come to be concepts of social
justice; this inherent right has come to be subjected to certain restrictions so as to protect an
employee against any sort of vindictive or capricious action. The employer is, therefore,
required to follow certain principles and procedures before he can award any punishment to
his employee. It is very essential that the correct procedure is followed by the employer to
ensure that his punishment order is not upset, later on by any Industrial Tribunal on technical
grounds, should it be made the subject matter of an industrial dispute. Except to a certain
extent in the Industrial Employment (Standing Orders) Act, 1946, there is little or no specific
provision in any statue relating to industrial law in this country prescribing in detail the
correct procedure as such, which should be followed before awarding punishment to an
employee. However, in recent years there has been a gradual emergence of a body of
principles resulting from the decisions of the various Industrial Tribunals, as well as High
Courts and the Supreme Courts indicating the basic formalities to be observed and the correct
procedure to be followed by the employer in such cases. These principles are fairly well
established by now and an attempt has been made in this handbook to explain these principles
and their practical application in detail as far as possible.

02. What Constitutes Misconduct?

In every general term, an act or conduct of an employee, which is

a) Prejudicial or likely to be prejudicial to the interest of the employer as also that of the other
employees;

b) Inconsistent or incompatible with the normal norms of discharge of his duty;

c) Such that it makes it unsafe and undesirable for the employer to retain him in service;

d) Such that the employer cannot rely on his faithfulness; or

e) Such that it amounts to insubordination to such a degree as to be incompatible with the

employer – employee relationship;

may be termed as misconduct. This description is illustrative only and not exhaustive.
However it gives a fairly good idea of the concept of misconduct.

02. Something about Industrial Employment (Standing Orders) Act,

1946
This Act was passed by the parliament in 1946. The object of this enactment is to define, in
precise terms, the conditions of employment for the employees. This Act is applicable to
“Industrial Establishment” employing one hundred or more employees. The States have
powers to make this Act applicable to “establishments” employing even lesser number of
employees. It is, therefore, advisable to ascertain from the offices of the respective State
Labour Commissioners, whether this Act, on a given date, becomes, applicable to a given
establishment or not. The “Industrial Establishments” to which this Act applies can have their
Standing Orders certified. The certification is done by the State Labour Commissioner or an
Officer under him known as a certifying Officer. These Standing Orders are required to be in
conformity with the Model Standing Orders framed by the respective State Governments.
The Standing Orders inter-alia defines acts and omissions, which constitute misconducts, as
also indicate generally a procedure for proceeding against an employee involved in
misconduct. Till such time as the Standing Orders for any establishment covered by the Act
are certified, it remains governed by the Model Standing Orders framed by the respective
State Governments. These Model Standing Orders are specified in Industrial Employment
(Standing Orders) Rules, framed by the State Governments.

03.1 The Model Standing Orders framed under the Bombay Industrial Employment (Standing
Orders) Rules, 1959, specify the following acts and omissions as misconducts for which the
delinquent employee can be punished:

a) Willful insubordination or disobedience, whether or not a combination with another, of any

lawful and reasonable order of a superior;

b) Going on an illegal strike or abetting, inciting, instigating or acting in furtherance thereof;

c) Willful slowing down in performance of work, or abetment or instigation thereof;

d) Theft, fraud or dishonesty in connection with the employer’s business or property or the
theft of property of another workman within the premises of the establishment.;

e) Taking or giving bribes or any illegal gratification;

f) Habitual absence without leave, or absence without leave for more than ten consecutive
days or overstaying the sanctioned leave without sufficient grounds or proper or satisfactory
explanation;

g) Late attendance on not less that four occasions within a month;

h) Habitual breach of any Standing Order or any law applicable to the establishment of any
rules made there under;

i) Collection without the permission of the Manager of any money within the premises of the
establishment except as sanctioned by any law for the time being in force;

j) Engaging in trade within the premises of the establishment;

k) Drunkenness, riotous, disorderly or indecent behaviour on the premises of the

establishment;

l) Commission of any act subversive of discipline or good behaviour on the premises of the
establishment;

m) Habitual neglect of work, or gross or habitual negligence;

n) Habitual breach of any rules or instructions for the maintenance and running of any
department, or the maintenance of the cleanliness of any portion of the establishment;

o) Habitual commission of any imposed under the Payment of Wages Act, 1936;

p) Canvassing for union membership or the collection of union dues within the premises of
the establishment, except in accordance with any law or with the permission of the Manager;

q) Willful damage to work in process or to any property of the establishment;

r) Holding meetings inside the premises of the establishment without the previous permission
of the manager or except in accordance with the provisions of any law for the time being in
force;

s) Disclosing to any unauthorized person any information in regard to the process of the
establishment which may come into the possession of the workman in the course of his work;

t) Gambling within the premises of the establishment;

u) Smoking within the premises of the establishment where it is prohibited by the employer;

v) Failure to observe safety instruction notified by the employer or interference with any
safety device or equipment installed within the establishment;

w) Distributing or exhibiting within the premises of the establishment hand-bills, pamphlets,

posters and such other things or causing to the displayed by means of signs or writing or
other visible representation on any matter without previous sanction of the Manager;

x) Refusal to accept a charge-sheet or other communication served in accordance with these

Standing Orders;

y) Unauthorized possession of any lethal weapon in the establishment.

Explanation: - No act of misconduct, which is committed on less than three occasions within
a space of one year, shall be treated as habitual.

This list may vary from State to State.

03.2 The above list precisely indicates which acts and omissions on the part of an employee
can be termed as misconduct. If any act or omission does not fall in any of the above, it will
not be possible for an employer to treat it as misconduct and proceed against the employee.
03.3 It may so happen that the Certified Standing Orders for a given establishment may
contain some additional items which can be called misconduct as are not enlisted in the
Model Standing Orders, and in such a case alone, action for such acts of misconduct will be
possible. The employer is, therefore, required to first ascertain whether any particular act or
omission on the part of the
03.4 Normally establishments which are not covered by the Standing Orders Act, frame rules
known as Service Rules, which have the same force as Standing Orders and such rules also
prescribe the acts and omissions, which can be treated as misconduct.

employee falls in the list mentioned in the Model Standing Orders or the Certified Standing
Orders, as the case may be, and then alone invoke the disciplinary procedure. It is needless to
say that no disciplinary action can be taken for any act or omission, which is not misconduct.

03.5 In cases where neither the Act is applicable nor any Service Rules have been framed, the
Model Standing Orders can be taken as a guide for disciplinary actions so as to fulfill the
principles of natural justice.

04. Principles of Natural Justice

a) An opportunity must be given to the delinquent employee to refute the charges and to
establish his innocence; this can be done only when he is told in unambiguous terms what is
the charge levelled against him.

b) An opportunity to conduct his defence must be available to him by cross-examining

witnesses in support of the charge levelled against him and by allowing him to examine
witnesses in his own defence.

c) The enquiry against the delinquent employee should be fair and should be conducted by an
impartial person.

d) The evidence at the enquiry should be adduced in the presence of the employee charged.

e) Punishment awarded should not be out or proportion to the misconduct committed.

As indicated earlier, the Supreme Court in its various pronouncements has enunciated certain
principles to be followed while proceeding against a delinquent employee. These principles
known as “Principles of Natural Justice”, can be summarized as follows;

05. Procedure for Disciplinary Action

It would thus be seen that it is an elementary principle of natural justice that no man should
be condemned or punished without being given an opportunity to explain the circumstances
obtaining against him. Based on this elementary principle of natural justice, Industrial
Tribunals in which India by their various awards have come to indicate an elaborate
procedure involves the following important steps:

Steps
1. Issue of a letter of charge to the employee calling upon him to submit his explanation.

2. Consideration of explanation.

3. Giving a notice of an Enquiry into the charges, if the explanation is not found satisfactory.
4. Holding of a full-fledged Enquiry giving all facilities to the employee for being heard.

5. Recording of the findings by the Enquiry Officer.

6. Consideration of the enquiry proceedings and the findings by the authorities empowered to
take a decision and make the final order of punishment.

7. Informing the employee of the punishment decided to be awarded to him.

Note: The Procedure indicated above is mainly for major misconducts, such as willful
insubordination, disobedience, theft, fraud, dishonesty, willful damage to employer’s
property, taking or giving illegal gratification, riotous or disorderly behaviour during working
hours, habitual negligence of work, striking work or inciting other to strike in contravention
of the provisions of law etc. For minor misconducts, for instance, unpunctuality, late
attendance, minor acts subversive of discipline, absence without permission, (Provided it is
not habitual), etc, the entire procedure listed above need not be followed. In such cases, it will
be sufficient to issue a show cause notice to the worker concerned, as for his explanation and
if the explanation is found unsatisfactory he may be issued a warning note straightaway.
(Draft show cause notice and draft warning notes are marked as annexure ‘A’ and ‘B’
respectively.)

05.1 First step – Issuing of the Letter of Charge

As soon as the Management comes to the conclusion, on the basis of the report received and
the necessary preliminary investigation made, that an act of misconduct committed by an
employee, in the circumstances of the case, warrants disciplinary action, the employee
concerned should without any delay be issued a charge sheet clearly and precisely setting
forth particulars of misconduct committed by him, and calling upon him to submit his
explanation in writing within a reasonable period of time. (A draft charge-sheet is marked as
Annexure ‘C’)

Note: No had and fast rule can be laid down for providing time for submitting explanation.
The only consideration should be that in the circumstances of the case the time given to the
employee should be sufficient to enable him to prepare and submit his explanation. Usually,
for minor misconducts 24 hours and for major misconducts 48 hours time may be allowed.
Extension of time for genuine reasons, if specifically requested for, should be granted in the
normal course.

Important
It is essential that the charges made in the charge-sheet should not be vogue. The charges
should be specific and clearly state that nature of misconduct, the date on which the
misconduct was committed and the time of its commission, place and other relevant details.
Great care should be taken in framing the charge-sheet for, on the proper framing of the
charge-sheet the validity or otherwise of a subsequent enquiry proceeding and dismissal or
any other punishment may entirely depend.

05.2 Refusal to Accept the Charge-sheet

If an employee refuses to accept the charge-sheet or to acknowledge its receipt it should be
sent to him by Registered Post, A.D.- at his last known address or alternatively the act of
refusal to accept should be recorded in the presence of at least known address or alternatively
the act of refusal to accept should be recorded in the presence of at least two witness. This
procedure is essential to be adopted so that the employer may not at a later stage deny the
service of the charge-sheet. A copy of the charge-sheet may also be displayed on the Notice
Board inside the establishment premises, with notings as to when displayed and when
removed, etc., before filing with appropriate papers. In appropriate cases, publishing the
charge-sheet in newspapers can also be adopted.

05.3 Misconduct, which is also Subject Matter of Criminal

Proceedings
There may be cases where the misconduct which besides being subject of a domestic enquiry
is also the subject of criminal proceedings in Court of Law. For such cases the principles of
natural justice do not require that the employer must await the decision of the Criminal Court
before taking disciplinary action against the employee though there may be peculiar cases
where it would be advisable for the employer to await the decision of the trying court. Thus a
pending criminal case is no bar for holding domestic enquiry. However, in general, if an
employer proceeds with an enquiry in spite of the fact that a criminal

case is pending, the domestic enquiry for that reason would not be vitiated. Similarly,
acquittal in criminal case does not affect the validity of the punishment awarded after a
domestic enquiry by the employer.

05.4 Suspension Pending Enquiry

If in the preliminary investigation it is established that the nature of misconduct committed by
the employee concerned is such that his physical presence inside the establishment premises
might endanger the safety of any individual or a group or aggravate the misconduct already
committed or if it is apprehended that the employee might tamper with the evidence or
intimidate the witnesses, the employer may suspend a worker pending the full-fledged
enquiry. During such suspension, the workman is entitled to suspension wages or subsistence
allowance as laid down in the Standing Orders or Service Rules, if applicable. If there is no
specific provision for such payment during suspension period, it must be noted that the
worker is entitled to full wages even if he is under suspension. Similarly, payment of wages
due for the period suspension is required to be made even if the worker is ultimately
dismissed after the enquiry. On the other hand if the employee is found not guilty of the
charges he becomes entitled to full wages for such suspension period, as if he was not guilty.
Suspension wages are “wages” within the meaning of the Payment of Wages Act and should
be paid on due dates. It must be noted that suspension pending enquiry is not a punishment.
Punishment follows only after the enquiry.

06. Second Step – Consideration of the Explanation

The employee in reply to the charge-sheet may:

a) Submit his explanation admitting the charge and ask for leniency;
b) Submit his explanation refuting the charge;

c) Apply for an extension of time for submitting the explanation;

d) Fail to submit his explanation.

06.1 When the employee Admits the Charge(s)

06.2 When the Employee Submits his Explanation Refuting the
Charge (s)
It may sometimes happen that the employee might admit the charge (s) levelled against him,
asking for leniency. Even if admission of the charge (s) by the employee is unqualified and
unambiguous, it may not be advisable for the employer to straightaway proceed to award
punishment to the employee without holding an enquiry for the simple reason that the
employee may later on disown his earlier4 confession and allege that it was obtained by the
employer under coercion or duress and that it was not voluntary confession. In such case, an
enquiry should be fixed as any other enquiry, the only difference being that it will not be
necessary for the Enquiry Officer to record evidence to bring home the charge, but he can
give his findings on the basis of admission made by the employee in his presence which he
must record and obtain the signature of the employee on it instead of relying on the letter of
such admission produced by the Management.

When an employee submits his explanation refuting the charge(s), it is to be carefully

considered whether or not the explanation offered is satisfactory. If it is found satisfactory,
further proceedings

06.3 When the Employee Asks for an Extension of Time

06.4 If the Employee Concerned Fails to Submit His Explanation
08.1.1 Procedure for Holding an Enquiry
in the matter should be dropped and the employee should be informed accordingly. However,
if it is found that the explanation submitted is not satisfactory and it felt that punishment
( other that warning note ) would be warranted, further steps regarding the holding of an
elaborate enquiry should be taken.

When the employee asks for an extension of time to submit explanation or reasonable
grounds it should preferably be granted, so that any future controversy on this issue is
avoided.

If the employee fails to submit his explanation, the employer may proceed to take further
proceedings as indicated herein. However, in such a case also it is important to bear in mind
that failure to submit an explanation by the employee would not entitle the employer to
dispense with the holding of an enquiry into the charges levelled against the employee, and to
proceed straightaway to award the punishment to him. The enquiry has to be held as per the
procedure, if punishment is to be awarded.

07. Third Step – Giving Notice of Holding of Enquiry

If the explanation submitted by the employee is found unsatisfactory, the next step is to issue
him a notice of holding an enquiry, giving him information as to the name of the Enquiry
Officer, the date, time and venue of the enquiry as also notifying to him that he should have
ready with him on the date of enquiry the witnesses that wishes to examine or any other
relevant information that he may like to give. ( A draft notice of holding an enquiry is marked
as Annexure ‘D’)

Note: In certain cases, it is advisable that instead of straightaway issuing a charge-sheet as

such, only a show-cause notice should be issued to the employee, requiring him to submit his
explanation. On the basis of the explanation submitted, it is possible to issue a specific
charge-sheet to the employee, in which case the notice of holding an enquiry can also be
incorporated therein. Thus, in such cases first step would be the issue of show-cause notice,
the second, consideration of the explanation and the third, issue of a charge-sheet as well as
notice of an enquiry.

On the other hand, in certain cases where prima-facie case is established it is possible and
permissible to combine the show-cause notice, charge-sheet and intimation of holding
enquiry in one and the same letter, to avoid delay in disciplinary action.

08. Fourth Step – Holding of the Enquiry

The object of holding an enquiry is to give an opportunity to the charge-sheeted employee to
establish his innocence by explaining the circumstances alleged against him, and
understanding his defence.

At the appointed time and date the following should be present at the venue of the enquiry
proceedings:

i) The Enquiry Officer: The Enquiry Officer and the authority empowered to issue
letter of charges and punishment should be different persons. The Enquiry may be held by
any responsible official of the company or even by an outsider while the letter of charge and
the letter awarding the punishment should be issued by the Manager. This is necessary from
the point of view that the judge and the prosecutor should not be the same person. It is also
essential that the Enquiry Officer does not import his knowledge of facts in the enquiry
proceedings. He should, therefore, preferably be a person who is neither a witness nor a party
to the incident which has resulted into the charge-sheet.
ii) The Management Representative: This is the person who presents the
Management’s case before the Enquiry Officer by adducing all the relevant evidence,
documentary and oral, in support of the charge. He has a right to cross-examine the employee
as well as the defence witness with a view to establishing the charge.
iii) The Charge-sheeted employee: It is absolutely necessary that the enquiry
should be held in the presence of the charge-sheeted employee. If, however, the employee
fails to report for the enquiry at the appointed time, despite reasonable opportunity, the
Enquiry Officer may proceed with the enquiry ex-parte provided the charge-sheeted
employee turns up and affords sufficient cause for his failure to report for the enquiry at the
appointed time, the enquiry may be proceeded with the de novo, after making appropriate
note in the proceedings to this effect.
iv) A representative of the charge-sheeted employee: If the charge-sheeted
employee wishes another employee of his choice to represent him and assist him at the
enquiry in the conduct of his defence, it should be normally allowed. Normally, it is provided
in the Standing Orders that an employee can be defended by another employee working in the
same department as himself. However, the Enquiry Officer may allow at his discretion an
employee from another department and particularly so, if he is Union official and should
make a note of it in the proceedings. Often a request is made for a non-employee union
official or a lawyer to be allowed to be present to assist the charge-sheeted employee. It is
absolutely in the discretion of the Management to grant or refuse such a request. The law
does not require admission of non-employees or lawyers in the domestic enquiry and,
therefore, requests for allowing an outsider union official to be present at the enquiry to assist
the charge-sheeted employee can be refused, whether or not the union is recognised.
Normally, persons who are not employees of the establishment and lawyers are not allowed
in domestic enquiries.
v) An interpreter, if necessary: The presence of an interpreter, from amongst the
employees, would be desirable though not mandatory, in case the charge-sheeted

employee pleads that he is not familiar with the language in which the Enquiry Officer
intends to conduct the proceedings. The enquiry should be as far as possible to be conducted
in the language understood by the majority of employees.

08.2 The Enquiry Officer should begin with recording the date of holding the enquiry, the
persons present on the date of holding the enquiry, the persons present at the enquiry, a
statement making reference to the charges, as per the letter of charge issued to the employee,
a statement to the effect that the procedure of enquiry was explained to the charge-sheeted
employee, and any other relevant statement, such as, a statement relating to a request by the
charge-sheeted employee to allow an outsider union official to be present at the enquiry and
the Enquiry Officer’s refusal to grant such a request, whether the employee admits charges or
not, etc. He should then ask the Management’s representative to present the case in detail,
which should be recorded.

08.3 Examination of Witnesses in Support of Charge(s)

It is advisable that none other than those who are to participate in the enquiry, should be
present. In particular, presence of a superior of the charge-sheeted employee should be
discouraged unless he is the management representative or a witness and enters the
proceedings at the appropriate time of his evidence, so that the employee later on does not
allege that an attempt was made to bring pressure on him during the enquiry.

Witness in support of charge(s) should be examined one by one. A witness should not be
present when another is being examined. After the witness has finished his evidence the
charge-sheeted employee should be asked to cross-examine the witness, if he so desires. If
the charge-sheeted employee does not wish to cross-examine the witness a statement to that
effect should be recorded in the proceedings. After the first witness has finished his evidence
the second witness should be called in and then the third witness and the same procedure
should be repeated. At the end of his evidence the signature of the witness should be
obtained. Also the signature of the charge-sheeted employee should be obtained, preferably
after inserting the following remarks:

“Read over, explained and admitted that the above, statement has
been recorded in my presence”
If the charge-sheeted employee refuses to sign, a remark to that effect should be recorded. At
the end of the cross-examination also signatures and dates of both the charge-sheeted
employee and the witness should be obtained. If the charge-sheeted employee refuses to sign,
once again a statement to this effect should be recorded.

There is no rule regarding the order in which the witnesses in support charge(s) should be
examined. However, normally, it is refused to examine the most important witness first.

08.4 Statement of the Charge-sheeted Employee

08.5 Cross-examination of the Charge-sheeted Employees:
08.6 Examination of the Witnesses in Defence
After the evidence of all the witness(es) in support of the charge is over, the charge-sheeted
employee should be asked give his statement in defence. After he has finished his statement
he should be asked to sign after inserting the following remarks:

“Read over, explained and admitted that the above statement has been
given by me”
If he refuses to sign or refuses to give a statement, a remark to that effect should be recorded
in the proceedings.

The charge-sheeted employee should then be cross-examined by the Management’s

representative in the same manner as other witnesses.

After the statement of the charge-sheeted employee and his cross-examination, he should be
asked to examine his witnesses, if any. If the employee has no witnesses to examine, or
refuses to examine them, a statement to that effect should be recorded so that it could be
proved later that the employee was given an opportunity to bring his own witnesses but he
declined to do so. If, however, the charge-sheeted employee wishes to examine witnesses in
defence he should be given every reasonable opportunity to do so. If he cites witnesses who
are his fellow employees, arrangements should be made to call them. If, however, the
witnesses cited by him are outsiders over whom the employer has no control, it is the
responsibility of the employee alone to present them at the enquiry. Witnesses tendered by
the charge-sheeted employee should be examined one by one just as in the case of witnesses
in the support of charge. The only difference here would here would be that the charge-
sheeted workman would first examine his witnesses and then the Management’s
representative would have the right to cross-examine them. At the end of the evidence of each
witness, the witness concerned should be asked to sign and after inserting the following
remark, the charge-sheeted employee should be asked to put his signature also.

“Read over, explained and admitted that the above statement has been
recorded in my presence”
If the witness or charge-sheeted employee refuses to sign, a remark to this effect should be
recorded. In case it is not possible to examine all the witness on the same day, the enquiry
may be continued the next day or may be adjourned to another day according to the
convenience of all concerned. A suitable endorsement to this effect will have to be made by
the Enquiry Officer in such cases in the enquiry proceedings.

08.7 After all the witnesses on behalf of the Company and those tendered by the charge-
sheeted workman have been examined, the enquiry would come to a close. ( A draft enquiry
procedure step by step is marked as Annexure ‘E’)
08.8 Though the evidence in an enquiry can be recorded in a narrative form of statement, it
is advantageous to record it in question-answer form so as to bring out the true implication of
the questions and the answers thereto and the proper analysis of the evidence.
08.9 The whole procedure relating to holding enquires, as given above, is lengthy and may
appear to be a bit complicated for a layman, but it hast to be followed as closely as possible,
if it is intended by the Management to exercise its right of punishment of delinquent
employees without fear of its being upset later on by an Industrial Tribunal, should it be made
the subject matter of an industrial dispute. However, it is not indented to say that unless the
above procedure is followed strictly, the decision of the Management punishing the
delinquent is bound to be upset. The rules and procedure are only handmaids of justice and
unless it could be shown that the employee was misled or prejudiced in his defence and
consequently there has been a failure of justice on account of some error or omission on the
part of the Enquiry Officer in the observance of the correct rules of procedure for holding
enquiries, such error or omission would not be deemed to be material enough to vitiate the
enquiry proceedings and become cause for upsetting of the decision of the Management
based thereon. Moreover, it is generally realized by the Tribunals that the persons holding
domestic enquiries are not generally versed in law and as such a rigid observance of the rules
of procedure prescribed by the Criminal Procedure Code or the Evidence Act cannot be
expected of them. As a matte of fact, as long as it can be shown that a fair opportunity was
given to the accused workman, (1) to remain present at the enquiry; (2) to cross-examine
witnesses in support of charges and (3) to examine his own witnesses, minor irregularities
will not vitiate the enquiry proceedings, which nevertheless should be avoided. The
procedure for holding domestic enquiries. Set out above in great detail, clearly indicates as to
when and where the Enquiry Officer should enter the necessary remarks in the records of the
proceedings which would bear out that a fair opportunity for the purposes aforesaid was duly
given to the charge-sheeted employee and it can be said that if the Enquiry Officer follows
the above procedure in essence, even though not strictly to the letter, he should have little fear
that his findings will be upset on grounds of procedure. (1) Enquiry Officer should acquaint
himself about the procedure to be followed before he embarks on the enquiry proceedings.

(2) If at any stage of cross-examination of the witness the Enquiry Officer fells that a
particular question asked is irrelevant in as much as that it has no bearing whatsoever with

09. A few Hints

the charge, he may disallow such a question, but a statement to this effect setting forth the
reasons for disallowing such a question will have to be recorded. Similarly, no leading
questions should be asked or allowed, which tantamount to forcing an answer from a witness.

(3) If at any stage of enquiry, the charge-sheeted employee withdraws from the enquiry, the
further proceedings of the enquiry should be held ex-parte. It is to be borne in mind that mere
withdrawal of the charge-sheeted employee from an enquiry would not entitle the
Management to dispense with the holding of further enquiry into the charges.
(4) If the charge-sheeted employee behaves rudely or does not cooperate in the enquiry
proceedings in the manner he should, a statement to this effect should also be recorded.

10. Fifth Step – Recording of the findings by the Enquiry Officer

After the conclusion of the enquiry proceedings the Enquiry Officer should give his findings
as to whether or not the charges levelled against the employee are proved on the evidence
recorded at the enquiry. The findings should be supported by an analysis of the evidence for
his conclusion an each item of the charge – ie., why he agrees or disagrees with the
management’s or employee’s contention on each of the charges. The Enquiry Officer should,
as far as possible, refrain from recommending any particular type of punishment, but should
leave it to be considered by the Authority empowered to decide the punishment and make the
order.

11. Sixth Step – Consideration of the Enquiry Officer Report and

Findings by the Authority: Management’s Note
After the Enquiry Officer has submitted his report and the findings, management’s note
should be prepared by the Authority empowered to decide punishment. In this note it is to be
indicated whether the Management concurs with the findings of the Enquiry Officer, what is
the past record of the workman charged, what punishment should be awarded and so on. The
authority should decide the suitable punishment warranted on the proven charges, taking into
account the gravity of the misconduct on the part of the workman. Such authority may also
take into consideration whether or not any extenuating or aggravating circumstances exist.
The past record of service of the employee must be looked into in this connection. If the past
record is clean it may be regarded as a mitigating circumstance, while if it is not so, it would
be an aggravating circumstance. ( A draft Management’s note is marked as Annexure ‘F’)

12. Seventh Step – Informing the workman in writing of the

punishment decided to be given to him.
After the decision as to the punishment to awarded to the employee has been made, it has to
be

communicated to the employee concerned as expeditiously as possible. (Draft letters of

punishment

are marked as Annexure ‘G’ & ‘H’.) The letter communicating the punishment should make
a reference to the letter of charge issued to the employee, the enquiry held into the charges
levelled against him, the findings of the enquiry officer, extenuating or aggravating
circumstances, if any, the decision as to the punishment, and the date from which the
punishment is to be effective. However, in cases where ‘approval’ or ‘prior’ permission of
conciliation officer, court or tribunal be necessary for effecting the order or punishment under
section 33 of the Industrial Dispute Act, a solightly different procedure has to be adopted in
this connection. In a case where ‘prior permission’ of the conciliation officer or court or
tribunal is necessary, the punishment order cannot be made effective without obtaining such
permission, and as such the letter communicating punishment in such a case should state that
the Management has taken or is taking steps to obtain the necessary permission form the
authority concerned and that the decision of the Management to punish him would be
implemented after such permission had been obtained. It may be further stated in that letter, -
if the proposed punishment be that of dismissal or discharge, that pending permission of the
authority to dismiss or discharge, that pending permission of the authority to dismiss or
discharge him, he shall be placed under suspension, (if in such a case it is considered
desirable that the employee should not visit the establishment.) But in the case where only
‘approval’ is necessary the order of punishment can be made effective at once, it being
required only to make an application to the authority concerned for ‘approval’ of the
Management’s action against the workman along with making a payment of one month’s
wages to the workman. A fuller discussion as to when and under what circumstances
‘permission’ or ‘approval’ is necessary under section 33 of the Industrial Dispute Act follow
hereunder.

PROCEDURE REGARDING DISCIPLINARY ACTIONS DURING

THE PENDENCY OF AN INDUSTRIAL DISPUTE
13. Express Permission
A workman who is concerned in the dispute which is pending in conciliation or adjudication
cannot be punished in regard to any matter or misconduct connected with the dispute during
the pendency of such proceedings except with the express or prior permission in writing of
the authority before which the proceedings are pending. Let us illustrate this. Suppose a
demand charter is pending before the Tribunal, and the workers shout slogans or behave in an
indisciplinary manner or choose to go on strike in support of the demand charter. Such
misconduct will be deemed connected with the dispute pending

13.1 Approval A workman who is concerned in the dispute which is under conciliation
or adjudication can be punished in accordance with the Standing Orders applicable to the
workman in regard to any matter or misconduct not connected with the dispute without prior
permission of the authority before whom the proceedings are pending. (a) Pay the workman
one month’s wages and

(b) Simultaneously make an application to the authority before which the proceedings are
pending for approval of the action already taken by the employer.

13.2 Notwithstanding the right allowed to the employer to punish a workman concerned in a

pending dispute for an act of misconduct not connected with the dispute without prior
permission of the authority, but to obtain an approval after the punishment, it may be noted
that a limited number of workmen known as “protected workmen” who are given special
protection, cannot be punished by way of dispute or dismissal in regard to any matter or
misconduct, whether connected with the dispute or not, without prior written permission of
the authority before which the dispute is pending.
13.3 It is needless to sate that a workman not concerned in the dispute under conciliation or
adjudication can be punished in regard to any matter or misconduct during the pendency of
such proceedings without any permission or approval of the authority before which the
proceedings are pending. To sum up:

before the Tribunal and accordingly express or prior permission in writing from Tribunal
concerned will have to be obtained for awarding punishment of discharge or dismissal to the
employees concerned.
For example, suppose a worker is involved in theft cases. Naturally this has nothing to do
with the Demand Charter pending before the Tribunal. Therefore, this misconduct cannot be
said to be connected with the dispute pending before the Tribunal and no prior permission
from the Tribunal for taking disciplinary action against the employee concerned would be
necessary. However, is such cases where the punishment inflicted is that of discharge or
dismissal, the employer has to

(a) An express permission from the authority concerned would be necessary only in the case
where both of the following conditions are satisfied:

(i) the workman against whom action is to be taken is a workman concerned in the dispute;

(j) the matter or misconduct for which it is intended to punish him is connected with the
dispute.

If any of the two conditions is not available, no prior permission shall be necessary from the
authority before which the dispute is pending, unless he is a protected workman, in which
case express permission is mandatory. In other words in the case of ‘protected’ workman
permission from the appropriate authority shall be necessary even if condition (ii) above is
not satisfied.

Filing of an application for approval of the authority concerned would be necessary, along
with payment of one month’s wages in the case where punishment inflicted is that of
discharge or dismissal, even if condition (ii) is not satisfied.

14. Protected Workman

Protected workman means a workman who is an officer of the Trade Union connected with
the particular establishment concerned and who has been recognised as such in accordance
with the rules made in this behalf.

Every year the recognised Union is expected to submit the list of office bearers to the
Management with a specific request to recognise these office bearers as “protected
workmen”. Under the Industrial Disputes Act the number of office bearers to be recognised
as “protected workmen” shall be one percent of the total number of workmen employed
subject to a minimum number of five and a maximum number of one hundred. Once these
workers are recognised as “protected workmen” they are immunized to the extent that before
taking disciplinary action (dismissal or discharge) against them, a prior permission in writing
from the authority before whom the dispute is pending will have to be obtained. If however,
there is no dispute pending, the question of obtaining permission does not arise.

Note: Since the matter of taking disciplinary action against the employee by way of
discharge or dismissal during the pendency of proceedings before conciliation, tribunal, etc.,
is of delicate nature in as much as that it involves cumbersome formalities, etc., it is advisable
to refer such matters for proper guidance and advice, before any action is taken.
15. Punishments: Kinds of Punishments 1. Dismissal
2. Discharge
3. With holding increments

4. Demotion to a lower grade

5. Suspension

6. Fine

7. Warning or censure

The various punishments which may be usually awarded to workmen for the misconducts
committed by them are set out below.

Of the above dismissal, discharge, suspension, may be called as ‘major punishment’, while
fine warning or censure, may be called as ‘minor punishment’.

15.1. Dismissal and Discharge

15.2. Discharge
As a normal rule punishment should be commensurate with the gravity of misconduct. Thus a
worker found guilty of an act of gross misconduct like theft, assault, etc., may be justifiably
awarded the extreme punishment of dismissal, while a worker found guilty of ac act of minor
misconduct like unpunctuality may be warned or censured.

In the establishments to which the Industrial Employment (Standing Orders) Act is

applicable, the various punishments that may be awarded are specified in the Model Standing
Orders or the Certified Standing Orders and as such no punishment other than that so
specified can be awarded. For instance, punishment by way of withholding of an increment or
demotion cannot be awarded unless they are allowed by the Standing Orders, applicable to
the establishment. Similarly if service rules have been framed for an establishment, the
punishment to be awarded should be in conformity with the said rules. In the establishments
where Standing Orders Act is not applicable, the Management has discretion to award any
appropriate punishment for a particular misconduct subject to the obvious qualification that
the punishment should not be unduly excessive.

Dismissal: Dismissal the extreme punishment. Infliction of this extreme punishment on an

employee would be justified if any conduct on the part of an employee may be deemed to be
incompatible with the faithful discharge of his duties, and it is considered undesirable or
against the interest of the employer to continue him in employment.

On the basis of the above principle serious misconduct like willful insubordination, riotous
and a disorderly behaviour, dishonesty, willful negligence of wok, would justify dismissal of
an employee.

In its legal sense discharge is not a punishment as such, but merely an incidence on
employment and denotes operation of such part of the contact between them as relates to
terminating it by giving agreed notice or by payment and acceptance of money in lieu of such
notice. When the contract of service is thus terminated the reciprocal promises and
obligations are said to be discharged. Therefore, at common law the term discharge is used to
describe the termination of an employee’s service for any reasons, which do not imply any
act of misconduct, or does not cast a slur on him. Though the right of the employer to put an
end to the contract of employment between him and his employee is recognised, it must be
noted that if the employee challenges the termination of his services as being not a bona fide
exercise of the right of the employer but as a colourable exercise of such right in the form or
a discharge simpliciter when in effect it is a dismissal for some misconduct, the employer is
required to prove his bona fide is this respect. However it is significant that the term
‘discharge’ has come to acquire a meaning analogous to ‘dismissal’ and an employee may be
punished by way of discharge also, in which case it is not considered as discharge simpliciter
but discharge in lieu of dismissal.

 15.3.Withholding of Increments
15.4. Fine
 Therefore, though discharge or dismissal, both have the same result, i.e., termination of the
services of an employee, discharge is considered a punishment less severe than that of
dismissal. The stigma attached to the expression ‘dismissal’ is not attached to the expression
‘discharge’. In the case of discharge, the agreed notice or payment in lieu thereof has to be
given but in the case of dismissal no such notice or payment in lieu thereof is required to be
made.

Some Standing Orders or Service Rules prescribe withholding of an increment or demotion to

a lower grade as one of the punishments, which can be awarded for misconduct. As a normal
rule, the employees in the graded scales enjoy benefit of regular annual increments. These
increments accrue automatically until the maximum of the scale is reached, and stoppage of
annual increment on any occasion when it is normally due, would amount to punishment of
the employee concerned. Annual increments constitute recognition of not merely the growing
needs of a workman’s family, but also the growing experience and consequent efficiency of
the workman. The questions of efficiency, therefore, is a very relevant consideration for the
Management for awarding annual increments. The employer has the right to expect from his
employees a certain minimum level of efficiency and, therefore, if he finds that a particular
employee has failed to attain that level, he would be justified in withholding the increment.
However, this cannot be suddenly done at the end of the year. The employee concerned
should be informed in writing from time to time about his deficiencies and given opportunity
to improve his efficiency. If in spite of his being informed about his deficiencies from time to
time there is no improvement in his efficiency then withholding increment will be perfectly
justified. Withholding of increment for continued inefficiency in normal course may not,
therefore, be considered as punishment for misconduct, but an implied service condition.
However it would amount to a punishment if it is specifically awarded as a punishment for a
specific misconduct after holding an enquiry which may be milder punishment than dismissal
or discharge.

Important
Withholding of annual increment as punishment if not prohibited by Standing Orders or
Service Rules is deemed to be a major punishment as the accumulative effect of losing an
increment would be considerable and generally speaking, the acts of misconducts for which
this punishment may be awarded are the same as those for which the extreme punishment of
dismissal of discharge may be awarded.
Fine means a deduction from the wages of an employee by way of punishment.

Power to make penal deductions from the remuneration of the employee is not an implied
term or ordinary contract between the master and servant. In Certified Standing Orders of
certain establishments, such power is given to the employer but here again this power is not
absolute inasmuch

as the Payment of Wages Act, 1036 comes in the way and places several statutory restrictions
on the exercise of such power.

The restrictions inter alia are:

a) No fine shall be imposed on any employee until he is given an opportunity of showing

cause against the fine;

b) All fines and realizations shall be recorded in a register in the prescribed form and should
be employed only to such purposes beneficial to the employees as are approved by the
prescribed authorities; and

c) The amount of fine to be imposed shall not exceed the statutory limit. 15.5.
Suspension
15.6. Warning
 Suspension means prohibiting an employee from performing his duties and withholding
wages for that period as punishment. During the period of suspension the contract of
employment between the employer and the employee is said to be under suspension.

The period of suspension should not, however, exceed the maximum period stipulated in the
Standing Orders. In the Model Standing Orders framed by the Maharashtra Government,
there is a provision of awarding punitive suspension (subject to maximum of 4 days).

It shall however be noted that suspension as punishment is quiet distinct from suspension
pending enquiry.

Warning is an admonition of an employee for a minor misconduct warning him against

commission of misconduct of a familiar nature or any other misconduct in future.

Warning may be issued orally or in writing. But in cases of habitual minor misconducts or
inefficiency it is desirable that these are issued in writing and brought on record so that they
may support, if necessary, any substantial punishment that may have to be given to the
employee in future.

Since warning is not considered as a substantive punishment, the elaborative procedure

prescribed for the award of punishment like dismissal, discharge, etc., need not be followed.
But it is desirable that the employee is asked to explain his conduct before the warning is
issued. Whether his explanation is satisfactory or not is for the Management to decide and to
that extent issuing of warning after receipt of explanation (if fond unsatisfactory) will be
perfectly in order.
16. What about Probationers?
 Probation means ‘proving’ and accordingly an employee on probation or a probationer
means a person who has been given an opportunity to prove his worth before he is admitted
to the regular employment.

Apart from cases of victimization, it is the exclusive jurisdiction of the employer to decide
whether or not the work of a probationer during the period of probation has been satisfactory
and to that extent to confirm him. However, it is to be born in mind that probationer comes
within the definition of ‘workman’ under the Industrial Disputes Act, and an industrial
dispute relating to his discharge can be

validly raised and adjudicated upon by an Industrial Tribunal. The Supreme Court has
observed that an appointment on probation gives an employer no right to terminate the
services of an employee before the expiry of the probationary period, except on the ground of
misconduct or other sufficient reason in which case even services of a permanent employee
can be terminated.

In view of the above observation of the Supreme Court, it will therefore be advisable:

            a) to terminate the services of a probationer only on the expiry of his probationary
period and not earlier;

            b) that if the performance of his duties during probationary period is found to be
unsatisfactory, it should be brought to his notice in writing from time to time. This will
strengthen the Management’s case, inasmuch as that a fair opportunity was given to him to
show marked improvement n his performance. If a probationer, however, commits a
misconduct during the probationary period, he can be punished like any other permanent
workman, by following the required disciplinary procedure.

            17.
Whether Act Subversive of Discipline Committed Outside
the Factory can be deemed to be Misconduct.
 Normally, the employer is not the general custodian of the morals of his workmen. However,
if the act subversive of discipline committed outside the establishment or outside the working
hours is found to

a) be inconsistent with the fulfillment of the express or implied conditions of service, or

b) be directly linked with the general relationship of employer and employee, or

c) have a direct connection with the contentment or comfort of the men at work, or

d) have a material bearing of the smooth and efficient working of the concern,

 the employer will be well within his rights to take disciplinary action against the employee
concerned.

18. When Tribunal Can Interfere

Important: It must be noted that an Industrial Tribunal can interfere with the decision of
the Management in regard to dismissal or discharge when it finds that:

a) there is a want of bone fides, or

b) it is a case of victimisation or unfair labour practice, or

c) there is violation of principles of natural justice, or

d) there is a basic error of facts, or

e) there has been a perverse findings on the materials placed at the enquiry.

 If any disciplinary action by the employer does not suffer from any of these infirmities, there
is no possibility of it being upset by any Industrial Tribunal.

19. Epilogue
 

The procedure for taking disciplinary action to be followed by an employer, is not an empty
formality. It is, in substance, the adherence to the principles of natural justice, which is a must
in any social or

industrial set-up. Legalities and technicalities apart, equity demands that these principles are
followed by every employer. The Managers must, therefore, fully acquaint themselves with
principles and practices in conducting domestic enquiries and taking disciplinary action.

20. Specimen Forms

 

ANNEXURE ‘A’
Show Cause Notice
Shri……………………………………………

Ticket No…………………………………..

Show Cause Notice

It has been reported against you as under:

On …………………….1 at ………………………..2 you ……………………3 The act(s) as

above alleged to have been committed by you amount to misconduct.

Accordingly, you are hereby called upon to submit your written explanation and show cause
why disciplinary action should not be taken against you.
Your explanation must reach the undersigned by …………………………….4 Should you
fail to submit your explanation as required, the matter will be disposed of without any further
reference to you.

1. Date of the incident

2. Time of the incident

3. Full details of the alleged misconduct

4. Allow 2 days for submission of the explanation.

Date: ___________ Manager
ANNEXURE ‘B’ 1
Simple Warning
Shri……………………………….

Ticket No………………………

Warning
Your explanation dated …………………… in reply to show cause notice dated
…………….. has been found to be unsatisfactory.

You are accordingly hereby warned.

You are further advised in your own interest to be cautious and not to repeat such an act in
future.

Manager
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