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Losing employer’s confidence can cost you job

SC said that in cases like corruption or theft, there can’t be any other punishment than dismissal of staffer.

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An employee loses the right to remain in service if his employer has lost confidence in him.

In a major ruling that encompass all type of employments and staff performing responsible functions, the Supreme Court on Tuesday held that in cases of misconduct of grave nature like corruption or theft, there can’t be any other punishment than the dismissal of a delinquent staffer.

The test for loss of confidence to determine whether there was “bona fide loss of confidence” in the employee, it must be established that a workman is holding the position of trust and confidence, and by abusing such a position, he “commits act which results in forfeiting” the confidence.

Another test is if retaining such an employee on the pay roll, he would be “embarrassing and inconvenient to the employer, or would be detrimental to the discipline or security of the establishment”.

A bench of justices BS Chauhan and TS Thakur also observed that “loss of confidence cannot be subjective, based upon the mind of the management”.

There must be objective facts which would lead to a definite inference of apprehension in the mind of the management regarding trustworthiness or reliability of the employee. These must be alleged and then proved by the management of a company.

This significant ruling has come in an appeal filed by the Karnataka State Road Transport Corporation challenging a high court order in 2009 directing restoration of job to its employee who had been found guilty of theft in the organisation and gross misconduct. Allowing its appeal, the court said: “An employer is not bound to keep an employee in service with whom relations have reached the point of complete loss of confidence or faith between the two.”

This judgment is an off shoot of the criminal offence committed by a KSTRC employee MG Vittal Rao in 1986.

He was subjected to disciplinary proceedings and in 1987 he was charged with the allegations that on October 3, 1986 he stayed away beyond his duty hours at his place of employment.  Then he and four other employees opened the inner door of the cash room by cutting the padlock and stole money from the cash chest there.

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