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    Supreme Court On Disciplinary Proceedings 2016



    • Without following principles of natural justice no punishment should be imposed on the employee. 
    • Punishment should not be different to different employees who has committed the same or similar misconduct. 
    • In determining the quantum of punishment the Management should treat all the employee equally and there shall be no discrimination. 
    • The enquiry officer must be an independent person who is totally un-connected to the dispute and not an interested party in the outcome of the dispute. 
    • When an employee commits misconduct for personal gain punishment of dismissal is appropriate. 
    • When the acts of an employee adversely affect the interests of the company, it is nothing but gross misconduct and punishment of dismissal is appropriate.

    The Management of an industrial establishment has a right to exercise control over its employees. Employer employee relationship rests on the overall control that an employer is entitled to exercise over his employees, not only in regard to their work in the establishment but also in regard to their conduct and behaviour in relation to the performance of work. It also includes his attitude towards his co-workers, supervisors, outsiders with whom the employee may come into contact in relation to the performance of work. Without disciplinary control being exercised by the employer, work cannot run smoothly and efficiently.


    Maintenance of discipline in an industrial establishment is the core on which the survival and growth of an industry depends. At the same time employer has no right to ‘hire and fire’ an employee at his whims and fancies. Employer has no right to dismiss an employee from the services of the company for his acts of misconduct without following the procedures laid down in the Industrial Employment Standing Orders and in cases where the Standing Orders are not applicable in accordance with the rules framed by the company within the framework of law. Hence disciplinary proceedings are an essential part of maintenance of discipline in the industry.


    In a recent judgement the Supreme Court in the matter of Pawan Kumar Agarwala Vs General Manager, State Bank of India & Others held as under:

    Disciplinary Proceedings are liable to be set aside in case the delinquent is not supplied the copies of the documents, relied upon by the employer and list of witnesses for proving the charges since it is violation of principles of natural justice.


    Enquiry is liable to be vitiated if the enquiry proceedings are conducted in violation of Employer’s relations or applicable standing orders.


    Punishment is discriminatory if similarly situated another delinquent employee is let off lightly with stoppage of increment.


    Discriminatory punishment is liable to be vitiated.


    Misconduct would not stand proved, in respect of those charges which were not held to be proved by the Enquiry Officer, without giving an opportunity to the delinquent by the Disciplinary Authority to show cause as to why the finding on such charges should not be reversed.


    Let us look at what are the Principles of Natural Justice.


    The principles of natural justice mean the principles relating to the procedure required to be followed by authorities entrusted with the task of deciding disputes between the parties when no procedure is laid down by law. Through various pronouncements by the Supreme Court the following rules have been evolved over a period on the subject:


    1. No one shall be a judge in his own cause.


    1. Hear the other party. No one should be condemned unheard. A person must be given a fair opportunity to defend himself or to present his side of the case.


    1. Decision must be made in good faith.


    The Supreme Court in the matter of Sur Enamel and Stamping Works Ltd Vs Workmen laid down with regard to domestic enquiries as under:


    • The employee proceeded against has been informed clearly of the charges levelled against him.


    • The witnesses are examined in the presence of the employee in respect of the charges.
    • The employee is given a fair opportunity to cross-examine witnesses.


    • The employee is given a fair opportunity to examine witnesses including himself in his defence.


    • The enquiry officer records his findings with reasons for the same in his report.


    In the matter of A C C Ltd Vs Workmen it was held by the Supreme Court that if an officer himself sees the misconduct of a workman, it is desirable that the enquiry should be left to be held by some other person who does not claim to be an eye-witness of the incident. Domestic Enquiries must be conducted honestly and bona fide with a view to determine whether the charge framed against a particular employee is proved or not and so care must be taken to see that these enquiries do not become empty formalities.


    The Supreme Court in the matter of UP State RTC Vs Gopal Shukla (2016 LLR 113) held that when the employee committed misconduct for his personal gain, the punishment of dismissal is appropriate. The same is elaborated hereunder.

    When the misconduct reflects that the employee has committed the same for his personal gains causing loss to his employer or the employee loses the confidence of the employer, the nature of misconduct would be grave and serious. Punishment of dismissal from service is justified if the Management has lost confidence upon employee due to his grave and serious misconduct.


    In determining the quantum of punishment the Management should be fair and treat all the employee equally. There shall be no discrimination among the employee. The Supreme Court in the matter of AK Saxena Vs State Bank of Patiala (2016 LLR 485) held that dismissal from services of one employee out of four involved in commission of fraud is not justified only on the ground that other three have been put to face criminal trial or they were obeying his request for consequential steps or he was a kingpin of the whole transaction.


    Dismissing one employee out of four involved in commission of fraud amounts to his discrimination and hence not sustainable in law.


    The Supreme Court in the matter of Jagdish Lal Gambhir Vs Punjab National Bank ( 2016 LLR 84) held that Dismissal from service of bank officer is justified for deliberately flouting the Bank norms thereby accommodating some parties by putting huge funds of the bank at stake which proves that he has failed to discharge his duties with utmost integrity, honesty, devotion and diligence. In another case State Bank of Patiala Vs General Secretary, Staff Union (2016 LLR 1121 ) held that any act on the part of the workmen, adversely affecting the interest of the bank, is nothing but a gross negligence on his part, justifying major punishment of dismissal from service.


    Reference : Labour Law Reporter (2016) & Supreme Court on Industrial Employment

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