Beyond the Handbook: Why Discipline Needs Process, Not Just Policy

Arjun Paleri and Jaya Ramachandran

Part 1 of the ‘Lifecycle of Discipline’ Series

Most employers know what to do when an employee violates policy. Few know how to do it right.

Disciplinary action encompasses the spectrum of corrective measures available to the employer to address workplace violations. It can range from verbal warning to termination, often governed by a mix of company policies, employment contract, statutory frameworks such as the Industrial Employment (Standing Orders) Act, 1946 (now subsumed by the Industrial Relations Code, 2020) or the local Shops and Establishments Acts.

But many organisations falter, not because they act, but because they act without process.

Disciplinary action typically arises after:

• A workplace investigation finds misconduct (for example, harassment, insubordination, falsification of records, unauthorised absenteeism, etc.); or

• Someone reports a serious behavioural or policy violation.

• It is the point where investigation meets consequence and where organisations often move too fast or too informally.

Did you know?

Under Indian laws, termination without a domestic inquiry can be held illegal, even if the misconduct is later proven.

The Supreme Court in Delhi Cloth & General Mills Co. v. Ludh Budh Singh (1972) held that if a domestic inquiry is found to be defective (or if none was held), the employer must prove misconduct before the tribunal, losing the benefit of inquiry findings as prima facie proof. This judgment also established the “earliest stage” requirement, i.e., the employer must request the opportunity to lead evidence during the proceedings, rather than after they are closed and the judge has declared the inquiry illegal. This landmark judgment continues to serve as the foundation of disciplinary jurisprudence even today.

The Gujarat High Court in Minakshiben Laxmanbhai Paraliya v. State of Gujarat (2022) held that termination orders founded on allegations of misconduct without holding any inquiry, even for fixed-term (temporary) employees, amount to stigmatic termination and must be set aside.

Common Pitfalls Include:

• Taking action without a proper inquiry.

• Ignoring the principles of natural justice, especially the employee’s right to be heard.

• Lack of proportionality between the misconduct and the consequence.

• Inconsistent treatment across employees.

• No written record of warnings or communication.

Follow the Law (and Policy)

Indian workplaces often blend hierarchy with informality, often wanting to “settle things quietly” to avoid confrontation, but skipping the process, even with good intent, can backfire legally and reputationally.

Even if an employee is not a “worker”, fair procedure still matters. Skipping steps can amount to wrongful termination. Therefore, a fair disciplinary process protects both the employee and the employer.

A legally sound disciplinary process requires attention to these key elements:

1. Begin with a fair inquiry

• Always ground disciplinary measures in facts rather than assumptions or hearsay.

• If the allegations pertain to misconduct, it’s prudent to carry out a preliminary investigation to ascertain whether there is a prima facie case and proceed to a formal domestic inquiry if such a basis exists, before imposing any penalty.

• Ensure that the individual conducting the inquiry is not associated with the matter or has any vested interest.

• Provide the employee –

  • A written chargesheet outlining the misconduct.

  • A reasonable timeframe to respond and present evidence.

  • An opportunity to present their side and call witnesses, if any.

This approach upholds the principles of natural justice.

2. Maintain proportionality

• Align punishment with the seriousness of the misconduct. Consistent alignment of punishment with the seriousness of misconduct ensures employees have confidence that the system is not arbitrary.

  
  

3. Document every action

• Maintain copies of show cause notices and charge sheets, inquiry reports, etc. Proper documentation makes the difference between a defensible action and a disputed one.

  
  

4. Adhere to timelines

• Delays in taking or communicating action undermine credibility.

• However, pushing towards action without proper inquiry may lead to legal repercussions.

• Aim for balance, and where there is any delay, document the reasons for the delay.

  
  

5.  Maintain confidentiality and dignity

• Disciplinary action is not a public punishment. Communicate in a private, respectful manner and in writing.

• Discuss disciplinary issues only with those who are directly involved.

Although not every disciplinary case uncovers a systemic flaw, certain cases offer a chance for introspection: Is there a deficiency in training? Was there a failure in supervision? Is there a policy that lacks clarity? Used thoughtfully, disciplinary processes can highlight patterns that require organisational attention, while still preserving individual accountability.

When organisations hastily impose punishments, they often lose control over the outcome. By slowing down to guarantee fairness, you not only shield the company from legal risk but also foster a culture where accountability is valued.