Domestic Inquiry in Labour Law

A domestic inquiry in Labour Law is similar to a trial in a court of law. It happens when someone does something wrong at their workplace. This could be breaking the rules or doing something against the company’s policies. The company has its own rules for how to handle these situations. The inquiry is done fairly and follows the principles of fairness.

The term “domestic inquiry” in Labour Law is mostly used when looking into cases of an employee doing something wrong or not following the rules. In simple words, it means a company investigation. The company’s managers or people in charge handle these cases, not judges in a court. When someone is not behaving well at work, the company can choose someone to investigate the situation. This kind of investigation is called a “domestic inquiry” in Labour Law.

What is Domestic Inquiry in Labour Law?

A domestic inquiry in Labour Law is a formal process conducted by an employer or management within an organisation to investigate allegations of misconduct or indiscipline involving an employee. 

A domestic inquiry in Labour Law aims to establish the facts surrounding the alleged misconduct, provide the accused employee with an opportunity to respond and present their side of the story and ultimately determine whether disciplinary action is warranted.

Principals of Natural Justice in Domestic Inquiry

(1) Nemo in propria causa judex, esse debet – No one should be made a judge in his own case or the rule against bias.

(2) Audi alteram partem – Hear the other party, the rule of fair hearing, or the rule that no one should be condemned unheard.

Who is Authorised to Punish an Employee?

Only the employer or the designated authority, also known as the notified disciplinary authority, has the power to decide the punishment. The person conducting the investigation should review the evidence and provide their findings regarding the charges against the employee in question.

Legal Requirement of Domestic Inquiry in Labour Law

The requirement for a domestic inquiry in Labour Law is outlined in the standing orders established by the Industrial Employment (Standing Order) Act of 1946. This means that these standing orders hold legal weight and are considered official terms of employment.

The precedent set by previous legal cases has made it mandatory for employers to conduct a fair and impartial inquiry to establish misconduct before imposing any form of punishment.

Domestic Inquiry and Departmental Inquiry

The term ‘domestic inquiry’ is often used when discussing investigations involving industrial or commercial workers. On the other hand, when an inquiry involves a government employee, it is referred to as a ‘departmental inquiry’.

Process of Domestic Inquiry in Labour Law

Fact-Finding Enquiry or Preliminary Enquiry

When management becomes aware of an employee’s potential instance of misconduct, they should conduct an initial inquiry into the matter. This type of inquiry is often referred to as a Factual Inquiry. The employee involved may also be questioned during this inquiry. 

The aim is to determine whether there is enough evidence to establish a preliminary case for taking disciplinary action against the employee. If the management concludes, based on the initial inquiry, that the employee may have committed misconduct warranting disciplinary action, they will proceed to issue a formal charge sheet.

Purpose of Initial Inquiry

Sometimes, accusations against individuals are made without proper basis, in a careless or biased manner. An initial inquiry can shed light on these allegations and assist the relevant authority in assessing whether there is a preliminary case and valid reasons to proceed with charges against the person in question. 

However, it’s important not to pre-judge the person’s guilt during the initial inquiry, regardless of how compelling the evidence gathered might be. The evidence collected during the initial inquiry mainly helps the authority decide whether to charge the individual facing the allegations formally. Initial inquiries are usually conducted orally whenever possible, with the person conducting the inquiry later documenting the findings in writing.

Framing of Charges for Domestic Inquiry in Labour Law

This phase is the most crucial and significant point throughout the process. The outcome of any disciplinary case relies heavily on the accuracy and strength of the charges. These charges for domestic inquiry in Labour Law, in turn, stem from accusations or claims, meaning that if these allegations are grounded in solid evidence, the prospects of a successful outcome for the internal inquiry are significantly increased. Regrettably, assembling foolproof evidence demands meticulous attention, patience and painstaking effort, often requiring a substantial amount of time that is frequently begrudged.

There is a lack of understanding that hastily crafted charges, rooted in insufficiently collected information, can allow the accused to evade consequences and evade punishment. Therefore, dedicating time during the informal inquiry into Labour Law to establish a robust foundation for the charges is an investment well worth making. The charges must be specific and clear, directly stemming from the description of the allegations and must pertain to the violations outlined in the employment regulations or officially endorsed operational guidelines applicable to the organisation. The subsequent factors should be taken into account when formulating the charges:

i) Are the charges well-defined and unambiguous?

ii) Is there a tendency to fragment a single offence into numerous charges?

iii) Are unrelated offences merged into a single charge?

iv) Are the charges constructed in a logically coherent manner? Do they naturally emanate from the nature of the allegations presented?

Service of Charge-Sheet for Domestic Inquiry in Labour Law

After preparing the chargesheet, it must be delivered to the concerned employee and evidence of its delivery should be obtained. If the employee is present, personal service can be used and acknowledgement of receipt can be obtained either on a copy of the chargesheet or in a record book. It’s recommended to have at least two witnesses during the service to document any refusal to accept the chargesheet during the Domestic Enquiry, with their signatures.

In some companies and under certain Standing Orders, a practice exists where the contents of the chargesheet are read out and explained to the employee in the presence of witnesses, often in a language they understand. This practice is important for illiterate or semi-literate employees and should be encouraged.

If the employee is absent or refuses to accept the chargesheet, it must be sent to their last known address by Registered Post with Acknowledgment Due (A.D.). Sending a copy by ordinary post with a certificate of posting might also be wise.

However, issues may arise if the Registered Post is marked as ‘refused’ or ‘not known.’ In such cases and if permitted by the standing orders, it may be considered proper service. But if this provision does not exist or the registered letter returns with remarks like ‘not known’ or ‘not in town,’ the entire chargesheet must be published in two widely circulated newspapers (in a regional language) where the employee works.

In companies with healthy industrial relations and cooperation between management and unions regarding disciplinary matters, many service-related problems may be avoided.

Response to the Charge-Sheet

Upon receiving the charge sheet, the employee has several options:

i) Request additional details or inspection of documents mentioned in the charge sheet.

ii) Acknowledge the allegations, admit guilt and offer apologies.

iii) Seek an extension of time to explain.

iv) Explain and deny the accusations.

v) Choose not to submit an explanation.

The response to a chargesheet involves carefully considering the employee’s actions, communicating with witnesses if necessary, granting reasonable requests for time extensions, and ensuring the principles of fairness and natural justice are upheld throughout the process.

Selection of the Inquiry Officer for Domestic Inquiry in Labour Law

Before proceeding with an inquiry, careful consideration should be given to selecting an inquiry officer to ensure impartiality and fairness. The following individuals should not be chosen as the inquiry officer:

i) Anyone who will be a witness during the upcoming inquiry.

ii) Someone who holds the authority to impose punishment themselves (although exceptions might apply, it’s generally best to avoid this situation).

iii) Someone with a personal connection to the complainant.

iv) Individuals who are known or likely to hold a bias against the employee facing the charges.

v) Anyone with direct personal knowledge of the facts and circumstances mentioned in the charge sheet.

vi) The person who issued the chargesheet.

If no suitable candidate is available within the organisation, an external individual, such as a lawyer or professional consultant (who can be compensated), may be appointed as the inquiry officer. This ensures an unbiased approach to the proceedings.

Communication of Punishment Order

Orders issued by the disciplinary authority should be comprehensive and explanatory, as the accused worker may appeal based on the grounds specified in the order. The Supreme Court’s principles from the case of Madhya Pradesh Industries Ltd. vs. Union of India (AIR 1966 SC 671) guide in this matter and can be summarised as follows:

Administrative authorities, when acting as a tribunal, are required to provide reasons to support their orders due to the following reasons:

i) Providing reasons ensures clarity and prevents arbitrariness. It informs the affected party and allows the appellate authority to oversee the lower tribunals.

ii) Without reason, unscrupulous or dishonest officers could misuse this power.

However, if the original tribunal offers sufficient reasons for its decision and the appellate authority concurs with the original decision, the appellate authority need not provide separate reasons.

The final order in a disciplinary case becomes effective only upon being communicated to the concerned employee, not before. Nonetheless, a dismissal order issued with retrospective effects, such as from the date of suspension, remains valid; only the effective date changes (AIR 1966 SC 951). This ensures that fairness and proper procedure are maintained throughout the disciplinary process.

Conclusion

A domestic inquiry in Labour Law is a formal internal process undertaken by employers or management to investigate allegations of misconduct or indiscipline involving an employee. This process is designed to ensure fairness, impartiality and adherence to the principles of natural justice. 

Key elements of a domestic inquiry include the examination of evidence, the opportunity for the accused employee to respond and present their case, the assessment of findings and the determination of appropriate disciplinary action.

A crucial aspect of the domestic inquiry in Labour Law is the selection of an impartial inquiry officer or committee to conduct the proceedings. The process aims to establish the truth of the matter while providing the accused employee with a chance to defend themselves and cross-examine witnesses. The outcome of the domestic inquiry leads to recommendations or decisions on disciplinary action, which are ultimately made by the relevant authority within the organisation.