Termination of employee
I am working with one of private company. One of my employee committed cash misappropriation of 7 lakhs. We have taken a confession letter from erring employee and filed a police complaint. Police also arrested employee and now he is in police custody (Charge Sheet not filed yet) I want to terminate that employee however I am unable to do so because as per labor law I have to send hi show cause notice. As he is in police custody I am unable to send him SCN. Hence I have suspended him by paying half salary every month. Request your advice to terminate the employee.
You are advised to retrench the employee in the meantime, as it can be an easier process of terminating him/her from the service.
In a case, held that wherein the court held that an analysis of the definition reveals four essential ingredients, namely
1) There must be a termination of the service of a workman.
2) The termination must be by the employer,
3) For any reason whatsoever, and
4) Otherwise than as by way of punishment inflicted by way of disciplinary action.
In this case, you can do the same in the way of a disciplinary action. Section 25F provides the conditions precedent to retrenchment, in case the employee has been in service for less than a year. As per Section 25 F (a), workman has been given one months’ notice in writing indicating the reasons for retrenchment and the period of notice has expired, or the workman has been paid in lieu of such notice, wages for the period of the notice.
Section 25N (a) also lays down the conditions precedent to retrenchment in establishments with over 100 workers and continuous service for one year or more. The workman has to be given three months’ notice in writing indicating the reasons for retrenchment and the period of notice has expired, or the workman has been paid in lieu of such notice, wages for the period of the notice;
Thus, you are advised to follow either Section 25 F or Section 25 N (a). Even if he is under arrest, he can respond to the notice via his lawyer and the Industrial Disputes Act, which allows you to retrench workmen as a part of disciplinary action.
 State Bank of India V. Sundaramony