Prioritising integrity

A country attracts better foreign investment when it has organisations with strong principles and values. In fact, courts have also viewed cases of loss of confidence very seriously and have held integrity to be integral.

Indian courts have categorically held that once an employer loses confidence in an employee and this bona fide loss of confidence is affirmed, the punishment order must be considered immune from challenge. This is because discharging a position of trust and confidence demands unwavering integrity. Generally, courts do not interfere with a bona fide loss of confidence.

In M/s Francis Klein & Co. Pvt. Ltd. v. The Workmen, 1971, the Supreme Court held that when an employer loses trust in his employee, particularly in respect of a person who was discharging an office of trust and confidence, there can be no justification for directing his reinstatement back into services upon challenge. In this case, the Apex court held the post of Durwan for guarding valuable property in an industrial concern to be a post of confidence. When one of the colleagues of the employee called the employee to assist him in apprehending a thief, the refusal to do so by the employee was sufficient to justify the loss of confidence by the employer. In the well-known case by the name of Air India Corporation v. V.A. Rebellow, 1972, the Apex Court held that Air India's contention was that it lost confidence in the employee due to grave suspicion regarding his private conduct and behaviour with air-hostesses. The Court held that if the management was not fully satisfied beyond suspicion about his general conduct and behaviour while dealing with them, it cannot be said that loss of confidence was not bona fide. It stands established that once a bona fide loss of confidence is affirmed, the order of termination must be considered immune from challenge. The opinion formed by the employer about the suitability of his employee for the job assigned to him, even though erroneous, if bonafide, is final and not subject to review by the industrial adjudicator.

In dicta of Abheraj Jaswal v. M/s Godrej Boyce Manufacturing, 2011, the Division Bench of Delhi High Court upheld the termination of the workman who was charged with breach of trust by diverting the customers to a third party. In Johnson and Johnson Ltd. v. Gajendra Singh Rawat, 2016, a Single Bench of Delhi High Court upheld the termination of the workman for loss of confidence for theft and stealing the privileged and confidential documents from the office and threatening the employer to circulate it to the outside agencies.

In Bharat Heavy Electricals Ltd. v. M. Chandrasekhar Reddy, 2005, the Apex court upheld the termination on the ground of loss of confidence. In this case, the employer lost confidence in the employee who removed security documents and was terminated. The Supreme Court upheld the termination on the ground of loss of confidence.

Integrity is considered more important than financial gains. The law of the land dictates that one's principles should not be compromised regardless of possible gain.

In Divisional Controller, Karnataka State Road Transport Corporation v. M.G. Vittal, 2011, the Supreme Court ruled on a case where one helper in the Road Transport Corporation was charged with breaking in and opening the cash room in collusion with four other employees. He was dismissed after an inquiry. The Industrial Tribunal held the inquiry bad for insufficient evidence. It was argued that the employee had been acquitted in the criminal case. The court held that reinstatement cannot be directed in case of loss of confidence even if the employee is able to secure acquittal or discharge in a criminal case. Serious loss of confidence is viewed from the employer's perspective, and even acquittal in a criminal case does not help in a disciplinary case.

In a case of Punjab Dairy Development Corporation, 1997, the Supreme Court upheld the dismissal of an employee from service after holding a domestic inquiry on the charge that he inflated the quantum of milk supplies and fat contents. The Supreme Court upheld the dismissal on the ground that the management had lost confidence that the employee would truthfully and carefully carry out his duties.

It is important for entities to have strong policies and not tolerate any kind of loss of confidence. Integrity is the most valuable trait to have in the workplace and anywhere in the country. It is the foundation of strong ethical standards.

The writer is a practising Advocate in Supreme Court and High Court of Delhi. Views expressed are personal