In India, disputes over termination or dismissal for misconduct are among the most commonly litigated matters in employment law. This is, in part, due to the complex and uncertain legal landscape surrounding workplace disciplinary inquiries — leaving employers vulnerable to wrongful dismissal claims. The complexity stems both from the lack of clear statutory regulations governing such proceedings, coupled with the ongoing evolution of judicial precedents on the matter.
While the state-specific shops and establishments legislation as well as Indian industrial laws allow employers to terminate employment immediately (without any notice) for misconduct, it does not specifically set out the process to be followed for conducting a disciplinary inquiry in relation to such terminations.
While the state-specific shops and establishments legislation as well as Indian industrial laws allow employers to terminate employment immediately (without any notice) for misconduct, it does not specifically set out the process to be followed for conducting a disciplinary inquiry in relation to such terminations.
Indian courts have consistently ruled that a dismissal on the grounds of "misconduct" must be preceded by a just, fair and reasonable inquiry into the alleged misconduct. It would be important for an establishment to ensure that when carrying out such proceedings that the inquiry must be held in accordance with the principles of natural justice and comply with any specific procedure for holding a disciplinary inquiry as set out in the establishment’s policies, standing orders (if applicable), code of conduct.
The principle of natural justice comprises three main tenets — that the person affected by a decision has a right to be heard; the authority deciding the matter should be free from bias; and the decision should be based on valid and reasonable grounds. The key idea behind this is to ensure that there is no miscarriage of justice and to ensure that proceedings are carried out in a fair manner.
Much of the litigation concerning disciplinary inquiries over the years has centred around the interpretation of 'fair opportunity' to be heard. What is the meaning of fair opportunity? When can an opportunity be said to be a 'fair opportunity'? Can 'what is fair' in one factual scenario be fair in another factual scenario?
Fair opportunity does not have a definitive meaning. It takes its form and content from the specific facts of each case and the necessity and significance of specific procedural aspects in light of the given factual matrix. Thus, what is fair and what is not must be determined based on the specific facts and circumstances of each case.
We outline certain judicial precedents below to throw light on how courts in India look at and approach disciplinary proceedings:
In S.P Paul v. Calcutta University (1969), the Supreme Court invalidated the inquiry on the grounds that witnesses were not examined in the presence of the charged parties and the charged parties were not given an opportunity to cross-examine the witnesses.
Contrary to the above, in Hira Nath Mishra v. The Principal (1973), the Supreme Court refused to invalidate the inquiry despite the fact that witnesses were not examined in the presence of the charged parties and that the charged parties were denied an opportunity to cross-examine the witnesses.
At first glance, the two outcomes may seem contradictory, but a closer examination reveals key differences in the facts of each case that led to distinct judicial decisions. In the first case, students were merely accused of copying during an exam, while in the second, male students were charged with harassing female students in a hostel.
The court, in the second case, recognised the trauma experienced by the female students and rejected an interpretation of fair opportunity that could have further victimised them. The court found that a neutral inquiry panel had thoroughly examined witnesses and deemed it unnecessary to have the accused male students present during witness testimony or allow cross-examination. Thus, the interpretation of 'fairness' in disciplinary inquiries varies based on the unique facts of each case.
In State Bank of Patiala v. S.K. Sharma (1996), the charged party was not provided copies of documents and statements relied upon by the inquiry authority. The court examined whether this omission caused any prejudice to the charged party's case. It noted that the party had an opportunity to review the material and make notes before the final hearing. As no prejudice was found, the court upheld the validity of the inquiry.
The cases discussed above underscore the fact that while broad principles guide the judicial interpretation of 'fair opportunity', courts' actual interpretations have varied, depending on the specific facts and circumstances of each case. This highlights the critical importance for employers to exercise caution and judgment when making decisions regarding disciplinary proceedings and actions against employees.
It is imperative to ensure a fair and just process before taking any disciplinary action against an employee. This includes, among other things, clearly articulating the charges, providing the employee an opportunity to respond, and ensuring that any action taken is proportionate to the findings of the inquiry panel. Employers must, therefore, fully comprehend the procedural requirements for conducting a disciplinary inquiry before initiating any punitive measures.
Vinay Joy is a partner, Srishti Ramkrishnan is the principal associate and Ajay Kranthi Kothwal is an associate at Khaitan & Co.
Disclaimer: The views expressed here are those of the author and do not necessarily represent the views of NDTV Profit or its editorial team.
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