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Domestic Enquiries & Employment Law

The very basis of any well organized establishment is discipline and the management must take prudent measures in upholding this. Disciplining a workman is one of the key methods of curtailing disputes amongst them and achieving maximum productivity.
 However, the power to supervise this discipline should not be used as tool to arbitrarily dismiss or punish a workman, which would be indeed be very unfair to them. Every establishment is expected to maintain Model Standing orders or Standard Standing Orders which lay down the bye laws of the industry including those dealing with misconduct and discipline.
With the growing importance of human rights, its enforcement and the notions of equality and fairness for all, law has made it necessary for an employer to work in a just and fair manner towards its workers knowing that it is the weaker party in industrial relations. It is for this purposes its mandatory for employers to hold domestic enquiries.
It has been held by Hon’ble Supreme Court of India in Hombe Gowda Educational Trust v. State of Karnataka, stated that giving managers the power to punish a workman according to law, even if the punishment may result in some hardship is important. But, one needs to bear in mind that conducting disciplinary proceedings against a workman is most controversial and often lead to long drawn-out cases. Hence, the management of any industrial establishment must cautiously approach such proceedings and strictly follow the procedure laid down by judicial precedents.

Concept of Domestic Enquiry
Domestic enquiry is similar to a trial in a court of law, but while a trial in a court is for crimes done against society, domestic enquiry is conducted for offences committed against the establishment for misconduct, punishable under the standing orders/rules and regulations of the organization.
Further, while a trail in a court is in accordance with the criminal procedure code, civil procedure code, evidence act, the domestic enquiry is conducted in terms of what is known as 'Natural Justice'. Also, the enquiry officer while examining the evidence and pronouncing on the guilt is not authorized to penalize the employee. It is only the employer or the appointing authority also known as notified disciplinary authority who can pronounce the penalty.
Domestic enquiry is not considered as a legal requirement under the Industrial Disputes Act, or other substantive laws such as the Factories act, Mines Act, etc. but has been provided under the standing orders to be framed in the Industrial Employment (Standing Order Act) 1946. As a result it is now well-established that such standing orders have the force of law and constitute statutory terms of employment.
The case law established over a long period has made it obligatory for the employers to hold a fair and just enquiry to prove the misconduct before awarding any serious punishment.

Dismissal of an employee without holding a fair and just domestic enquiry amounts to the violation of the principles of natural justice and is frowned upon by the Labour Courts/Industrial Tribunals and adverse conclusions may be drawn against the employer not holding a domestic enquiry, in so much so that the dismissal without holding a domestic enquiry is deemed to be illegal.

In Sur Enamel and Stamping Works (P) Ltd. v. Their Workmen, the hon’ble Supreme Court of India in an attempt to lay down the procedure for conducting an enquiry for industrial adjudication provided that: (a) the workman proceeded against must be informed clearly of the charges leveled against him; (b) the witnesses must be examined in the presence of the workman; (c) the workman must be given a fair opportunity to cross-examine the witnesses including himself if he so wishes; and (d) the Enquiry Officer ("Officer") must record his findings with reasons in his report.

Principles of Domestic Enquiry
1.      Rule of Natural Justice must be observed.
2.      The delinquent is entitled to a just hearing.
3.      He can call for his own evidence.
4.      Cross-examine any witness called by the prosecution.
5.      Where rules are laid down, the procedure of such rules must be followed.
6.      Disclose to the employee concerned, the documents of records and offer him an    opportunity to deal with it.
7.      Do not examine any witness in the absence of the employee.
8.      The enquiry officer is at liberty to disallow any evidence after recording the reasons in writing.

Keeping this in mind the above mentioned Principles, the following steps for conducting an enquiry against a workman need to be followed:

a)    Preliminary enquiry: When an act of misconduct has been committed and the Disciplinary Authority ("Authority") receives a complaint, it may conduct a preliminary enquiry. This enquiry is conducted before the charges are framed and is not part of a domestic enquiry. At this stage the management carries out investigations prior to launching enquiries against the workman, and determines whether there is sufficient material evidence to initiate domestic enquiry. The law with respect to preliminary investigation is, if the employer makes the enquiry it is not incumbent upon him to call for the explanation of the workman before serving the charge-sheet, since it may be used as a ploy for dishing out the defence of the workman. However, it is pertinent to note that the evidence recorded in a preliminary enquiry cannot be used in domestic enquiry because the workman has not had the opportunity to defend himself against such evidence. Upon conclusion of the preliminary enquiry, if the workman is found innocent, the employer need not undergo the following procedure. In such cases, the employer is only required to issue a show cause notice to the workman. However, if the workman is found guilty, the management has to hold a proper enquiry before dismissing him, which can be initiated only by supplying him with a charge-sheet.
Domestic enquiry commences once a charge-sheet is issued to the workman. A charge-sheet essentially contains detailed particulars of the misconduct, specific charges against the workman and the relevant clauses of the Standing Order under which the workman is liable to the punished. It is pertinent to note that the charge-sheet is to be sent by the employer to the workman by registered post and in case it is returned un-served, the employer must get the charges published in the local newspaper in the regional language understood by the workman.
Pursuant to service of the charge-sheet, the workman must be given an opportunity to submit an explanation to the Officer with respect to the alleged act or omission leading to misconduct. Accordingly, he must be granted reasonable time towards submitting the explanation and the enquiry must not be concluded unless this time period has expired. It is pertinent to note that there are no defined parameters of what constitutes "reasonable time period," and it depends on the facts and circumstances of each case, nature of charges, nature of proposed actions, etc.
Enquiry Report
Once the employer and the workman have been heard, the Officer is required to prepare a reasoned enquiry report and submit it with the Authority. This enquiry report must also be supplied to the workman upon conclusion of the enquiry. Since the Officer's may not be well acquainted with the law, minor discrepancies in the report which have no bearing on the decision may well be overlooked by the judiciary.
The Authority finally decides the matter and the penalty to be imposed, in case it agrees with the findings of the Officer. If the Authority does not agree with the findings it records its own findings based on the evidence on record. While doing so, if the Authority does not agree with the Officer's finding that the accused workman is not guilty, it may afford another opportunity to the workman to defend himself. However, once the Authority decides to impose punishment, it must be communicated to the workman at the earliest.
The decision of the Authority is appealable, provided the Standing Orders allow the appellate Authority created by the management to hear the matter again. The decision of the appellate Authority was final and binding upon the parties, and the domestic enquiry would be deemed concluded. However, this position has changed since the inception of section 11-A in the Act.

Impact of section 11-A of the Act

The significance of domestic enquiries has reduced due to the introduction of section 11-A in the Act and the finding of the SC in The Workmen of Firestone Tyre and Rubber Co. of India (Pvt.) Ltd. v. The Management, wherein it was held that even if no enquiry or defective enquiry had been conducted by the management of the industrial establishment, the parties can adduce evidence before the Industrial Tribunal ("Tribunal") to prove their stand. Thus, before section 11-A was introduced and a valid enquiry was conducted, the Tribunal could only interfere with the decision of the management on the following four grounds: (a) want of good faith; (b) unfair labour practice; (c) violation of principles of natural justice by the management; and (d) the finding is not based on the material evidence. However, post the amendment, the jurisdiction of the Tribunal/Labour Court can interfere with the decision of the Authority, even if the enquiry is conducted on the principles of natural justice. Therefore, in case of both, valid enquiry following the principles of natural justice or no enquiry being conducted, the Tribunal/Labour Court is empowered to set-aside the decision of the management or modify the punishment awarded to the workman. This in turn means that the amendment has granted the Tribunal/Labour Court extensive power which might be misused. If the employer or the workman is not satisfied with the decision of the Tribunal/Labour Court, they may further appeal before a high court by invoking writ jurisdiction.
Under the present system an Officer does not inspire the confidence of the delinquent workman as the charge-sheet is given by the employer and the Officer is also appointed by the employer. This frustrates the very essence of natural justice. Therefore, the law should provide a panel of Officers consisting of retired judges and labour law practitioners. They should be empowered with quasi-judicial powers while holding enquiries. Accordingly, due weightage will be given to the findings of such Officers and the number of industrial disputes will reduce.
Further, due to the extensive power of the interference of the Tribunal/Labour Court under section 11-A of the Act followed by an appeal before the high court, the significance of holding a valid domestic enquiry is overlooked in industries. The rationale is that the industry is averse to get involved with cumbersome procedures when the Tribunal/Labour Court is fully empowered to re-examine the case on merits. This undermines the entire process of industrial adjudication. Towards maintaining balance, if a valid enquiry is held, misconduct is proved and accordingly punishment is imposed, then the Tribunal/Labour Court should decline to interfere with the decision. Such a shifting of some degree of control back into the hands of the management will greatly help the cause of industrial discipline in India.


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