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What are the legal consequences of fraud done by an employee?
03-Mar-2023 (In Labour & Service Law)
If the employee misuses company money and on investigation found guilty and even the employee confess that he had misused the money and he has been given one week time to repay the money. But of on failing to pay the money can the police officer arrest the employee?? What are the remedies available to the employer of the company?
Hello,
The employee is guilty of embezzlement of funds / fraud which qualifies as "criminal breach of trust" under the Indian Penal Code. It is also an offence under Section 452 of the Companies Act 2013 (that is, if the said person is the employee of a registered company). Therefore, if the offence is established, the employee may be punishable with imprisonment which may extend to three years with or without fine (under the Indian Penal Code) as well as a fine which may be a minimum of INR 1 Lakh and maximum of INR 5 Lakh (under the Companies Act). In addition to this, the Court would normally order that the employee returns the embezzled funds to the employer.
Therefore, the employer could lodge a complaint against the employee before the jurisdictional police station. The employer may also initiate proceedings under Section 452 (if applicable).
The employer may also initiate disciplinary action against the employee in accordance with the terms of the employment agreement/employee handbook/standing orders (if applicable).
The employee is guilty of embezzlement of funds / fraud which qualifies as "criminal breach of trust" under the Indian Penal Code. It is also an offence under Section 452 of the Companies Act 2013 (that is, if the said person is the employee of a registered company). Therefore, if the offence is established, the employee may be punishable with imprisonment which may extend to three years with or without fine (under the Indian Penal Code) as well as a fine which may be a minimum of INR 1 Lakh and maximum of INR 5 Lakh (under the Companies Act). In addition to this, the Court would normally order that the employee returns the embezzled funds to the employer.
Therefore, the employer could lodge a complaint against the employee before the jurisdictional police station. The employer may also initiate proceedings under Section 452 (if applicable).
The employer may also initiate disciplinary action against the employee in accordance with the terms of the employment agreement/employee handbook/standing orders (if applicable).
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