Responsibility of employer.

You have started an interesting thread and discussion. Valuable advice of learned experts/members is sought.

What is the complaint and what are the charges leveled? The acts of the individual employee or action/policy of the company is challenged? Has the employee violated rule/policy of the company or the employee has acted in accordance with the guidelines applicable to him? The employee would require the official record to defend him and company may or not provide it.

There is no way a client of the company sues its employee. There would no privity of contract and the case is liable to rejected even at the admission stage. Post your query in detail whether it is a civil one or criminal liability, for a fraud a FIR can be against the concerned person. ALso please write if there was any special contract or agreement between the client the employee concerned.

vasudevan

Learned Mr. vasudevan has given valuable advice. Kindly follow it.

The employee might have acted according to the rules and regulations of the company. Any customer can not raise an issue on any employee and it should be against the company.

When any employee left the organiszation he is no more responsible until and unless it is personal. If is purely personal then there should be a civil or criminal case against employee. It is the responsibility of the company to take care of the case.

Mr.Vasudevan has given a valuable point.

Regards - kamesh

Some clarification:

Case is like this. The ABC company gives its power of attorney to one of its employee to bid and represent the company for a work. The power of attorney given by directors of ABC company to the employee clearly states that

"We hereby agree to ratify all acts, deeds and things lawfully done by our said attorney purusant to this POA and all acts, deeds and things done by our aforesaid attorney shall and shall always be deemed to have been done by us".

The client is a state owned company (PSU). The work gets awarded to the comapnay. After the work is completed the employee leaves job of ABC company and joins any other company.

After the employee leaves the company, the client (PSU company) initiates an inquiry into the awarding work to ABC company. The directors of ABC company simply shows cold sholder towards their former employee and state they had given POA to one of their employee so only their attorney should be held responsible and directors of the company should be left out from the inquiry.

I want to konow that since the employee was simply working on instructions of the directors. What is the responbsibility of ABC company towards their former employee. Is their any law/judgement which says that it is the onus of ABC company to provide legal assistance to their former employee.

You have posted "all acts, deeds and things done by our aforesaid attorney shall and shall always be deemed to have been done by us".

"The work gets awarded to the comapnay. After the work is completed the employee leaves job of ABC company and joins any other company.

After the employee leaves the company, the client (PSU company) initiates an inquiry into the awarding work to ABC company."

What is the crux of matter for initiating enquiry regarding awarding work to ABC Company?

Kind attention Mr. Kumar Doab

The PSU thinks that the work was awarded to ABC company without following proper departmental guidelines. Thats the crux of matter for initiating enquiry regarding awarding work to ABC Company.

Kind attention Mr. Vasudevan

Corruption charges have been levelled against the former employee and not against the ABC company or its directors. All payment was made by PSU to the ABC comapany vide cheques only.

I just want to know that whether there is any statutory gudieline for the company to provide legal help to their former employee.

Is there any judgement which can be quoted in the court to get legal help from the ABC compny.

Thanks and regards.

Sandeep

You have posted that:

"You were to bid for the company", implying there were other bidders, and work has been assigned to the most qualifying bidder.

And "The PSU thinks that the work was awarded to ABC company without following proper departmental guidelines" implying dept. has erred in following guidelines. PSU had initiated an enquiry, but what is conclusion of the enquiry. Has the PSU extracted some proofs or admissions from their employees?

Surprisingly company and directors have not been charged.

It seems that PSU has noted POA and by their own wisdom or due to some communication by ABC Company has decided to make the formal employee a party.

Regret that citations sought by you are not available.

Valuable advice and help of learned experts/members is sought.

Dear Sandeep! After reading entire posting and replies made by Kumar Doab, I have reached to a conclusion that if proceeding is civil then become ex-parte and do not take part therein as the same shall go against your previous employer company, the management of which is shiefting his responsbility but if case filed is of criminal nature then you personally shall have to bear at this stage when you are not in the employment of that company.

You may plead performed work within limits of GPA hence any suit or expenses to be incured thereon is the sole responsibility of the then employer.

An employee was designated by the board of directors through a resoution as Manager under the Factories Act. But no authority is specifiucally delegated to excersise authority to discharge his duties which also encompasses various labour laws where a Manager under Fcatory is an employer. When the employee asked for additional remuneration, the board advertised for his position withoput evevn discusing with him. On sseing the advertisement the employee left. When he was the Factory manager, police had filed a criminal case for  aftal accident occured in the factory. The board of directoirs didn't even bother to take care of him nor asked him about the case where he is attending the court hearing even after he left. Only on asking thye paid for his train fare and hotel lodging. They left the matter to the contarctor to handle the case since the person died was employed by the contractor. Even when the employee raised abill to pay for him for appearing in the court, the board of directors are silent. Now, please advise whetehr the employee can file a petition beofre the H'ble Magistarte who is hearing the case that, the said employee is not at all responsible for the accident as he was not at all delegated any authority to act as Fcatory manger and he was only an administartion manager and no control over production department where the accident occured. Secondly, can he file a case of chaeting on th board of directors since they just nominated him as Factory Manager to escape thier statutory obligations.   

My dear fact given by you are not clear. You are not intimating :-

has a wrongful tender been awarded by govt department on you bid?

has a criminal case bene registered? (you are not disclosing if the proceedings are civil or criminal)

were the Directors of the company well within their powers (as per MOA) to authroise you to bid?

has company atified the said bid after award and gained any business (or attempted) out of the bid?

It is not clear as to how you equate the matter with 2G case?

You fail to appreciate that if it was a PSU you were prbably covered under PC Act and if the proceedings are of criminal nature you have no claim whatsoever on the company or the directors for bearing cost of defence.  It is you own battle. You may opt for reimbuirsement if acquitted.

If it is a civil suit the cheated party has the option to sue the suspected cheater as well as his emloyer and ti is for the employee to prove that he was acting within lawfully delegated authority. Any irregularity in GPA or irregularity in exercise of the delegated power may absolve the employer of the vicarious liability in civil suit. Mr vasudeval has advised you which is relevant.The views of Mr RK Makkar are also broadly same.

Dear Sandeep,

First of all the provision of the POA, which states as follows, fully absolves you of any responsibility on behalf of your employer company:

"We hereby agree to ratify all acts, deeds and things lawfully done by our said attorney purusant to this POA and all acts, deeds and things done by our aforesaid attorney shall and shall always be deemed to have been done by us".

So, if you have been made party, that is wrong. Moreover, if the company is a Limited company as governed by the Companies Act, the company, itself is an artificial person in the eyes of law and only Directors of the company are liable for any legal action, not any employee. Contention of the Directors is quite wrong, if they say, "only their attorney should be held responsible and directors of the company should be left out from the inquiry." THEY CANNOT EVADE FROM THEIR LIABILITY & RESPONSIBILITY.

Secondly, if any irregularity has been committed by any employees of the PSU in award of a contract, the PSU should have taken action against its own employees, not the contractors. However, if violation of some statutory provisions have been made or fraudulent activity has been noticed on account of the act of the POA holder of the ABC company, as it seems be there from your supplementary information, the POA holder can also be booked for criminal conspiracy in the process. However, the Directors of the ABC company would be the main accused, not the employee/POA holder.

So, first of all you will have to defend yourself or to become a witness for approval to save yourself and only after you are exonerated of the offence, you can claim damages from your employer company separately.

Dear Sandeep,

Once relations are severed with the past employer on resignation, employer no more remains employer of the past employee. So, legally no responsibility rests on the said employer in case some of company client sues the employee.

However, you can prove in the court of law that performance of your act in discharge of your duty for the company was for and on behalf of the company and only the company is accountable, not the individual employee of the past.

You may however, adhere to the advice of Shri Makkad also to tackle the issue.

The queriest is still silent on the following points :-

"has a wrongful tender been awarded by govt department on you bid?

has a criminal case bene registered? (you are not disclosing if the proceedings are civil or criminal)

were the Directors of the company well within their powers (as per MOA) to authroise you to bid?

has company atified the said bid after award and gained any business (or attempted) out of the bid?"

This appears to be a criminal case. In cases of misuse of officiacial position by PSU officials the private prsons party to atempt or abet such misuse or be befifitted out of it can also find themselves in his net.  This gentelemen is not clarifying wheher his case is the same or different.