Domestic enquiry procedure: disciplinary action done right

A domestic enquiry is the internal hearing an employer holds before imposing a major punishment for misconduct. The procedure runs from a preliminary inquiry to a show cause notice or charge sheet, the appointment of an independent enquiry officer, hearings that follow the principles of natural justice, written findings, and a final order proportionate to the misconduct. A fair and documented enquiry is what makes a dismissal stand up if it is challenged.

This guide covers what counts as misconduct, each step of the procedure, suspension and subsistence allowance, deciding punishment and the records to keep, with a sample charge sheet structure. Disciplinary rules for workers usually sit in your standing orders, covered in our guide to standing orders under the Industrial Relations Code. Sexual harassment complaints follow a separate route through the Internal Committee, explained in POSH compliance for employers.

What counts as misconduct?

Misconduct is conduct that breaches the employee's duties to the employer or the rules of the workplace. For workers, the list is usually in the standing orders, certified or model, that apply to the establishment. For managers and others outside standing orders, it comes from the appointment letter, code of conduct and service rules.

Category	Typical examples	Usual range of penalty
Minor	Occasional late coming, minor negligence, not wearing safety gear once, discourtesy	Oral or written warning, censure
Major	Theft, fraud or dishonesty; wilful insubordination; habitual absence without leave; assault or violence at work; wilful damage to property; taking a bribe; falsifying records; drunkenness on duty	Suspension, withholding increment, demotion, discharge, dismissal

Habitual late coming and absence are the most common sources of disciplinary cases. Before treating them as misconduct, make sure the attendance data is accurate and the employee was told the rule; our guide to late coming policy and grace periods covers the step before discipline.

When is a domestic enquiry required?

Where standing orders apply, a worker cannot be given a major punishment without the procedure they set out, which includes an enquiry. For employees outside standing orders, a full enquiry may not be strictly required by statute, but courts expect fairness in any punitive action, and a terminated manager can still sue for breach of contract or wrongful termination. So the practical rule is:

• Minor penalties: a show cause notice and a considered reply are usually enough, unless your standing orders say otherwise.
• Major penalties: hold a domestic enquiry for workers, and follow an enquiry-style process for everyone else.

If an industrial dispute is pending before a conciliation officer or tribunal, the Industrial Relations Code restricts disciplinary action in some circumstances, particularly for matters connected with the dispute and for protected workmen. Take advice before acting in that window.

What are the steps in a domestic enquiry?

Step	Document	Practical timeline
1. Complaint or incident report	Written complaint, CCTV, records	Same day
2. Preliminary inquiry	Fact-finding note	3 to 7 days
3. Suspension pending enquiry, if needed	Suspension order	Only where presence would hamper the enquiry or risk safety
4. Show cause notice or charge sheet	Notice with specific allegations	Within days of the preliminary inquiry
5. Employee's reply	Written explanation	Usually 48 to 72 hours, extendable on request
6. Decision to hold an enquiry	Order appointing the enquiry officer and presenting officer	If the reply is unsatisfactory
7. Enquiry hearings	Notice of each hearing, recorded proceedings	Aim to finish within about 90 days
8. Enquiry report	Findings on each charge, with reasons	Within 2 weeks of the last hearing
9. Second notice on proposed penalty	Copy of report and proposed penalty	7 days to respond
10. Final order	Order by the competent authority	After considering the response
11. Appeal, if your policy provides one	Appeal and appellate order	As per policy

What is the difference between a show cause notice and a charge sheet?

Point	Show cause notice	Charge sheet
Purpose	Asks the employee to explain an incident	Formally frames charges for an enquiry
When used	Minor misconduct, or as the first step	Major misconduct where an enquiry will follow
Contents	Facts in brief, rule breached, time to reply	Each charge separately, with date, time, place, facts, rule or standing order clause, and documents relied on
Next step	Decision on minor penalty, or a charge sheet	Enquiry if the reply is not accepted

Many employers combine them as a "charge sheet cum show cause notice". That works if the charges are framed precisely enough to be enquired into.

Sample charge sheet structure

1. Reference number, date and the employee's name, code, designation and department.
2. Statement that the employee is charged with misconduct under a named clause of the standing orders or code of conduct.
3. Each charge in a numbered paragraph: what happened, when, where, and who was involved.
4. A list of the documents and witnesses the company relies on, with copies of documents attached or offered for inspection.
5. A time limit to reply in writing, usually 48 to 72 hours, with the right to ask for more time.
6. A statement that if the reply is not satisfactory, an enquiry will be held, and that the employee may be accompanied by a co-worker as defence representative, as your standing orders allow.
7. If the employee is suspended, a reference to the suspension order and subsistence allowance.
8. Signature of the competent authority.

Vague charges such as "your conduct has been unsatisfactory" are the most common reason enquiries are set aside. If you cannot state the date, the act and the rule, you are not ready to charge-sheet.

Who should be the enquiry officer?

The enquiry officer should be independent: not the complainant, not a witness, and not the person who will decide the punishment. Options include a senior manager from another department, an HR professional from another unit, or an external enquiry officer such as a retired judicial officer or a labour law practitioner. External officers cost more but are harder to accuse of bias, which matters in a case likely to be litigated.

A presenting officer presents the company's case. The employee may usually be represented by a co-worker; legal representation is often not allowed in domestic enquiries unless the company uses a legally qualified presenting officer, but check your standing orders.

What do the principles of natural justice require?

Principle	What it means in the enquiry
Right to know the case	Specific charges, and copies of the documents relied on, in advance
Right to be heard	Reasonable notice of each hearing, in a language the employee understands
Right to defend	Cross-examine company witnesses, produce own witnesses and documents
No bias	An enquiry officer with no stake in the outcome and no prior view
Decision on evidence	Findings based only on evidence recorded in the enquiry
Reasoned outcome	A report that explains why each charge is proved or not proved

Record each hearing in writing, read the record back and have all present sign each page. If the employee refuses to attend after proper notice, the enquiry officer may proceed ex parte, but record the notices served and offer at least one more opportunity.

What is the subsistence allowance during suspension?

Suspension pending enquiry is not a punishment, so a suspended worker is paid subsistence allowance. The Industrial Relations Code carries forward the rule familiar from the old standing orders law: subsistence allowance of 50% of wages for the first 90 days of suspension, and 75% for the remaining period if the enquiry is delayed beyond 90 days for reasons not attributable to the worker. Check the exact text that applies to your establishment, and any state law or standing order that provides a higher amount, because the more beneficial provision usually prevails.

Worked example

Suresh, a stores assistant with wages of ₹36,000 a month, is suspended pending an enquiry into alleged pilferage. The enquiry takes four months: the first three because of hearings, and the fourth because the company's witness was unavailable.

Period	Rate	Working	Amount
Months 1 to 3 (first 90 days)	50%	₹36,000 × 50% × 3	₹54,000
Month 4 (delay not due to Suresh)	75%	₹36,000 × 75% × 1	₹27,000
Total subsistence allowance		₹54,000 + ₹27,000	₹81,000

If the delay in month 4 had been caused by Suresh seeking repeated adjournments, the rate would have stayed at 50%, so month 4 would be ₹18,000 and the total ₹72,000. If he is exonerated, most standing orders and policies treat the suspension period as on duty: he would receive full wages of ₹36,000 × 4 = ₹1,44,000, less the ₹81,000 already paid, an arrear of ₹63,000. Use calendar-day calculations if your suspension does not fall on month boundaries.

How should the punishment be decided?

The disciplinary authority, not the enquiry officer, decides the punishment, after reading the report and the employee's response to it. Consider:

• Gravity of the proven charge. Theft or violence can justify dismissal; a single late arrival cannot.
• Proportionality. A punishment shockingly out of proportion to the misconduct is liable to be interfered with by a labour court or tribunal.
• Past record. Prior warnings can be considered, but if you rely on them, say so in the second notice.
• Consistency. Similar cases should receive similar outcomes. Keep a case log so you can check.
• Mitigating factors. Length of service, admission and apology, and provocation.

Penalty	Typical use
Warning or censure	First minor misconduct
Fine	Only as the Code on Wages permits, with prior notice of acts attracting fines
Withholding increment	Repeated minor or moderate misconduct
Suspension as a punishment	Only if the standing orders allow it, for the period they set
Demotion	Misconduct showing unfitness for the current role
Discharge	Serious misconduct, or loss of confidence, without the stigma of dismissal
Dismissal	Gross misconduct such as theft, fraud or violence

On dismissal for certain misconduct (such as violence, riotous or disorderly conduct, an offence involving moral turpitude, or wilful damage to the employer's property), the Code on Social Security permits gratuity to be forfeited wholly or partly, within the limits it sets. Forfeiture needs an order and reasons; it is not automatic. See gratuity in India, and compute the figure at stake with the gratuity calculator.

What records should you keep?

Keep the complete file: complaint, preliminary inquiry note, suspension order, charge sheet, reply, appointment orders, hearing notices with proof of service, proceedings, exhibits, enquiry report, second notice, reply, final order, appeal and any settlement. Keep it for at least 8 years from closure, or until any litigation ends. Our guide to HR records retention explains why.

Common mistakes

• Framing vague charges with no date, act or rule.
• Appointing the complainant's manager, or a witness, as enquiry officer.
• Not giving the employee copies of the documents relied on.
• Refusing cross-examination of company witnesses.
• Delaying the enquiry for months while the worker sits on subsistence allowance.
• Relying on past misconduct that was never put to the employee.
• Dismissing for a minor first offence.
• Forgetting the second notice before a major penalty.

FAQs

What is a domestic enquiry? It is an internal disciplinary hearing held by an employer to establish whether an employee committed the misconduct alleged, following natural justice, before imposing a major punishment.

Is a domestic enquiry mandatory before dismissal? For workers covered by standing orders, a major penalty such as dismissal generally requires the enquiry procedure they prescribe. For other employees, a fair process is still strongly advisable.

How long should a domestic enquiry take? Aim to complete it within about 90 days. Beyond that, subsistence allowance can rise to 75% where the delay is not caused by the worker, and witnesses' memories fade.

Can an employee bring a lawyer to a domestic enquiry? Usually not, unless the standing orders allow it or the company uses a legally trained presenting officer. A co-worker can usually act as defence representative.

What happens if the employee does not attend the enquiry? After proper notice and a further opportunity, the enquiry officer may proceed ex parte and record the reasons.

Can a suspended employee work elsewhere? Standing orders and contracts commonly prohibit it, and a suspended employee who takes other employment may lose the subsistence allowance. See our moonlighting policy guide.

How NeevHR helps

NeevHR documents holds your letter templates and generates notices as PDFs from employee data, with versioning so you can prove a letter has not changed since issue. Employee records keep every change on an effective-dated timeline, and exit management handles gratuity forfeiture with an approval step and the full and final settlement. To see the case file come together, book a demo.

This article provides general information for educational purposes. Statutory rules, thresholds, rates and filing requirements may change; verify with the relevant authority or a qualified professional. Last reviewed: 27 Oct 2026.