Welcome to Executive Education Program on Effective Discipline & Discipline Management

Law & Procedure of Disciplinary Actions in Industry By

Dr. N. Y. Phadnis Professor -IMT-Nagpur

Discipline in Industry

Observance of Norms & Rules- Duty/Job related & Behaviour at Work Place or in relation to employment. Maintenance of Discipline- a prerequisite for success of Industry. Positive Discipline & Self Discipline is preventive in nature & is achieved through Human Relations approach, Education, Counseling, Motivation & sound HR Practices. Negative Discipline is curative & punitive in nature & is enforced through Disciplinary Action & Punishment for Misconduct committed by an employee. The Program focuses on Negative aspects of Discipline & its Effective Management.

Misconduct

Mis- Bad/Wrong/Improper Conduct- Behaviour/Deed/Action. Misconduct is not necessarily a crime or an offence under the penal laws. Crime/Offence in relation to employment is a misconduct. Acts of commission & omission expressly stated in the standing orders or service rules as misconducts. It is desirable to provide a exhaustive list of misconducts in certified Standing orders or service Rules.

Case Law on Misconducts

Delhi cloth & General Mills Vs Workmen AIR 1970 SC 919. Mulchandani Electrical & Radio Industries 1975 II LLJ 391 SC Mahendrasingh Dhantwal Vs Hindustan Motors Ltd AIR 1976 SC 2062 M/s Glaxo Laboratories AIR 1984 SC 505.

Sexual Harassment at Work Place

It is a misconduct whether provided under SO or not. Deemed to be incorporated as misconduct under standing orders/service rules as per Apex court judgment in Vishakha Vs State of Rajasthan-AIR 1997 SC 3011. (Detail guidelines laid down) Also a crime/offence u/s 209,354 & 509 of IPC. Case Law- Apparel Export promotion council1999 LLR 169 SC. & Saudi Arabian Airlines- 1999 LLR 329 (Bom)

Disciplinary Action to be held as per

Certified or Model Standing Orders. OR Service Rules or Terms of Employment. And Principles of Natural Justice And Procedure/Guidelines evolved by SC & HC.

Disciplinary Action in Industry is not regulated by

Indian Evidence Act. Civil Procedure Code (CPC) Criminal Procedure Code (Cr. P. C) The Technical Rules of above 3 laws not applicable to disciplinary action. The rules or principles of natural justice contained in these laws does apply.

Nature of Domestic Enquiry.

It is an Internal Fact Finding enquiry by the employer into the allegations/charges of misconduct committed by an employee. Not a Judicial Enquiry. (Absence of Judicial Powers/Authority & Procedure) Treated as Quasi- Judicial i.e. to be held with judicious mind & approach & by observing Principles of Natural Justice. There is no set or prescribed form of conducting DE. Should be held as per the procedure if any under SO.

Principles of Natural Justice (Un-codified & Flexible)

No one should be Judge in his own cause. Hear the other Side. (No one to be condemned unheard) Fair, Transparent & Orderly Procedure. Reasonable & Adequate opportunity to defend the charges (of misconduct) given to delinquent at every stage of Enquiry. Due consideration of material on record by Enquiry Officer & Disciplinary Authority. Acid test for violation of PNJ is prejudice caused to delinquent or denial of justice.

Case Law on PNJ

D.K. Yadav Vs JMA Industries 1993 SCC (L&S) 723 State Bank of Patiala Vs S.K. Sharma 1996 II CLR 29 SC. Syndicate Bank Vs Venkatesh Gumrao Kurati 2006 I CLR 783 SC A. Sudhakar Vs PMG Hyderabad 2006 II CLR 27 SC

Nature & Status of Standing Orders (Model or Certified)

Is a statutorily imposed contract between employer & employees but not a statute by itself. SO have statutory force & binds employer & employees. SO should also be consistent with PNJ. Binding & enforceable so long as not violating the Labour Laws & Case Laws (Law overrides the Standing orders when inconsistent & conflicting) SO are not binding on Judiciary (Courts) To be read into contract of service & terms of service contract (Appointment letter) and overrides the appointment letter to the extent of inconsistency.

Case Law on SO

Rajasthan State Transport Vs Krishnakant 1995 II CLR 180 SC. (Para 13, 18 & 35) D.K. Yadav Vs JMA Industries 1993 SCC (L&S) 723 May & Baker Ltd Vs Kishore Icchaporia 1991 II CLR 176 Bom.HC

Disciplinary Action & Domestic Enquiry (Steps)

Report/Complaint or Notice of Misconduct. Suspension of employee (pending enquiry) (if desirable) Preliminary Investigations and/or show-cause notice (if necessary) Charge-sheet calling for explanation. Consideration of delinquents reply. Decision to hold enquiry & appointment of EO.& PO (MR) Notice of Enquiry to Delinquent.

DA & DE (steps) contd.

Enquiry Proceedings- Recording of Evidence. (As per the Procedure of SO & PNJ) Preparation & Submission of Enquiry Findings Report by EO to DA. Furnishing copy of ER to delinquent inviting comments. Due Consideration of Enquiry Record, comments & Past service record (of delinquent) by the disciplinary authority. Second Show cause notice (if expressly stated in SO otherwise not necessary) Communication of Punishment Order to delinquent & its implementation.

Report/Complaint of Misconduct

Must be in writing & signed by the complainant (s) Witnesses (if any) need not sign the complaint. Should contain full particulars of the incident- names of persons involved, date, time & place of incident, facts with specific allegations against delinquent.

Suspension Pending Enquiry (Optional)

If warranted. Should be done in case of serious acts of misconduct. Entry & Working of employee is prohibited in the interest of an organization. It is not a punishment. Insisting on daily reporting & marking attendance serve two purposes & employers convenience is served. Employer-Employee Relationship continues. Suspension/Subsistence Allowance to be paid as per Sec.10-A of IESO Act. (which overrides SO) (% of contractual salary & not Basic +DA alone) Less payment or No Payment of SA vitiates Enquiry. SA-Should not be linked with Attendance of suspended employee.

Suspension as Punishment

Not during the enquiry but at the end of enquiry on finding guilty. With full loss of pay for limited period not exceeding maximum days mentioned in SO or rules applicable. Technically & Legally amounts to break in service & re-appointment but generally not enforced due to feasibility.

Preliminary Enquiry (Optional)

If necessary/required. Collection of Information & Evidence to fix responsibility (to book an employee). Its not a regular DE & Participation of Delinquent is not necessary & required. Delinquents Statement should not be insisted upon. Out come of PE is a decision whether to issue Show-Cause Notice/Charge-sheet or not.

Charge-sheet or Show-Cause Notice

Is mandatory. Is starting of Regular Domestic Enquiry. Opportunity to reply must be given (within minimum 72 hours time to reply) Charges must Specific/Precise with full particulars of date, time, place, persons involved, incident alleged & allegations made. Relevant clauses of SO must be mentioned. Must be in writing & signed by competent authority. Insufficient particulars or vague charges vitiates enquiry. Translation of charge-sheet in local language necessary if employee does not understand English. Proof of Service of Charge-sheet is must.

Notice of Enquiry

It can be a part of charge-sheet if Show-cause notice calling for reply was given earlier. Should be issued generally after considering delinquents reply to charges & after decision to hold enquiry. Should communicate decision to hold enquiry & must give name of Enquiry officer & date, time & place of Enquiry. Should ask & assure employee to be defended by an assistant as per rules & to attend enquiry. Copies of documents & list of management witnesses should be attached.

Enquiry Officer

EO can be either an Internal officer or an Outsider including an Advocate. Charge-sheeting authority or Disciplinary authority can also be an EO however it is desirable not to appoint them as EO EO should be an unbiased & impartial person & should be above in rank than that of delinquent employee. Appointment of PO i.e MR is optional but desirable.

EO

Evidence of the Management in support of the charges should be recorded first. Defense Evidence should be recorded after Managements Evidence. Should not recommend punishment in ER. ER should be a Speaking Report EO does not have judicial powers but should act judiciously.

Appearance of Advocate in DE

Can hold Enquiry as Enquiry Officer. No right to delinquent employee even if EO is an Advocate. If MR/PO is an Advocate or legally trained officer then delinquent gets right. OR If charges are serious or complicated & legal expertise is necessary to defend then Advocate should be allowed. To follow the express provisions of SO or State law as applicable. Appearance of Advocate in DE is not a matter of Legal Right & Rule. It is an exception which is situation based.

Criminal Trial Vis--vis DE

Can proceed simultaneously (No bar) Level/degree of Proof required are different. Punishments have no bearing on each other. Desirable/Advisable to stay DE or reinstate employee only if 1) employee is acquitted with honour & 2) The Charges & Proof in both proceedings were identical.

Disciplinary Authority (DA)

Should give a copy of ER to delinquent & invite his comments. Can differ with the findings of EO however should record reasons. Should consider material on record before awarding punishment. An Authority who inflict punishment (CAO, CEO, Charge-sheeting authority or Appointing Authority)

Effect of No Enquiry or Defective Enquiry

Is an Unfair Labour Practice under MRTU & PULP Act in Maharashtra (Item 1(f) of schedule IV) Prohibited u/s 27 of MRTU & PULP Act. Courts exercise powers under sec. 28 & 30 of ULP Act & sec. 11-A of ID Act. Hindustan Lever Cases- 1993 LIC Bom.HC & 1995 II CLR 823 SC.

Land Mark Court Rulings

Charge-Sheet- Firestone Tyre Co- AIR 1981 SC 1626. Enquiry Officer & Enquiry Procedure- A.K. Kraipak VS UOI-AIR 1970 SC150, Delhi Cloth & General Mills (2 Cases)- 1972 I LLJ 172 SC & AIR 1972 SC 2128. Representation of Parties- Krishna chandra tandon Vs UOI- AIR 1974 SC 1589.Crescent dyes case- 1993 I CLR 253 SC Enquiry Procedure vis--vis Court procedure- UOI Vs Tulsiram PatelAIR 1985 SC 1416. Enquiry Vis--vis Criminal trial- Food corporation of India-AIR 1991SC 1115. Copy of Enquiry Report- UOI Vs Mohd. Ramzan Khan- AIR 1991 SC 762 SC & ECIL case- 1994 LIC 762 SC. Judicial Control- Fire stone Tyre co- AIR 1973 SC 1227. & Hindusthan Lever Case- 1995 II CLR 823 SC.

Triple Test or Mantra of Fair & Proper Disciplinary Action.

Follow the express rules prescribed under Standing orders (model or certified) Observe PNJ when rules under SO are silent or terms of appointment are not clear. Ensure that No prejudice and denial of justice is caused to an employee by your actions & decisions.

Thank You.
See you---

Legal Aspects of Employment

HR Elective Term-IV

Legal Aspects of Employment (LAE)

It basically covers Labour and/or Industrial Laws? The apt title is Industrial Labour Laws. Laws dealing with Labour employed & working in Industry. Also covers the legal issues & implications relating to terms of employment arising out of contract of and for employment. Also called as employment laws.

Nature of Labour/Industrial Law

A combination of Social Security & Welfare law + Criminal/Penal Law. For Employees- It is social justice, social security & welfare law. (Beneficial & Protective Law) For Employers- It is Penal/Criminal law. Creates Rights & Obligations for both employees & employer but more legal rights for employees & more statutory obligations for employers. Liberal interpretation favouring Labour Class & hence Pro-labour legislation.