Employee Can Be Dismissed After Retirement If Found To Be Guilty In Disciplinary Proceedings Initiated During Service Period: Orissa HC
The Orissa High Court has clarified that an employer has the authority to dismiss an employee from service, even after their retirement, with retrospective effect if they are found guilty in a disciplinary proceeding initiated during their service period.
In that context, the Bench of Justice Sanjay Kumar Mishra observed that, "if departmental proceeding has been initiated against an employee before his retirement, if the service rules of the Employer provide so, the departmental proceeding can continue even after retirement of an employee and if the employee is found guilty, minor or major punishment, including the punishment of dismissal can be imposed by the Employer, even the employee has retired."
Counsel PK Jena appeared for the petitioners, while Counsel RD Sarkar appeared for the opposite party.
Prior to his retirement, Opposite Party No. 3 (OP No. 3) worked as the Manager, Sub-Branch at the National Small Industries Corporation Ltd. (NSIC), Balasore. Shortly before his retirement, a disciplinary proceeding was initiated against him, and he was suspended pending enquiry.
Despite being given the opportunity to defend himself, OP No. 3 refused to cooperate, claiming that the proceedings were illegal due to his retirement. Consequently, he was declared ex parte, and the Inquiry Officer found the charges against him to be genuine.
Considering the seriousness of the allegations and the potential risk to NSIC's investments, OP No. 3 was dismissed from service upon his retirement. Subsequently, OP No. 3 sought the release of his gratuity amount under the Payment of Gratuity Act, 1972, which was initially granted by the Controlling Authority and upheld by the Appellate Authority. However, NSIC challenged these orders in the High Court, arguing that they were based on a judgment that had been overruled. Additionally, NSIC contended that the proven misconduct amounted to moral turpitude, justifying the forfeiture of OP No. 3's gratuity.
The High Court specified that, "The Petitioners-Employer had a right to impose the major penalty of dismissal with retrospective effect i.e. the date when the Opposite Party No.3 was superannuated, and legality of punishment imposed is subject to judicial scrutiny."
Subsequently, the Court held that the National Small Industries Corporation Limited (Control and Appeal) Rules, 1968, do not include a provision for the forfeiture of gratuity. While the rules allow for the withholding of gratuity to recover pecuniary losses caused to the Corporation, forfeiting retirement benefits, such as gratuity and leave encashment, is deemed illegal under these rules.
In light of the same, the Court ordered the petitioner to process the payment of gratuity to OP No.3 as his entitlement had been pending since 2016.
Appearances:
Petitioners: Counsel PK Jena
Opposite Parties: Counsel RD Sarkar
Cause Title: The Sr. Branch Manager, the National Small Industries Corporation Ltd. vs The Deputy Chief Labour Commissioner (Central)
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