In brief - Make sure you protect your company's
funds and confidential information
As a business owner, you want to nurture a staff team that is
open, trustworthy and reliable. However, it is also important to
have systems which safeguard your business. In particular, as your
business grows, it is worth giving careful thought to how funds and
confidential information are being managed and circulated among
Make sure departing employees don't take your
business with them
In the past year, we have worked with a number of businesses
which had to seek legal advice because of matters related to their
own employees. This includes:
Making an interlocutory injunction application in court against
a newly established business and ex-employees of our client to
restrain them from using and disclosing our client's
confidential information (possessed without consent) and
approaching our client's customers
Advising a business on remedies available after losing
substantial funds, siphoned out by its own employee
Addressing concerns of potential loss and exposure of
confidential information and intellectual know-how to competitors
after departure of employees
These scenarios revolve around two aspects - company funds and
confidential information (which includes customer information,
financials, business plans and intellectual property). Such
situations can create undesirable stress for any business owner and
also impinge negatively on the company's operations and morale,
translating into lost time and revenue.
Implementing safeguards without being
Obviously, not all employees are dishonest. However, in order to
reduce the risk of loss to your business, you can implement some
The ideal is to mitigate risks without being overbearing or
tyrannical towards your employees. The challenge is to cultivate a
positive work environment, striking a balance between building
relationships with staff and implementing safeguards in a prudent
and sensitive manner.
Here are some processes that can be implemented in the early
stages of a business.
Clear role descriptions to promote
It is not uncommon to have employees juggle multiple tasks and
responsibilities. Spell out those responsibilities and roles to
avoid uncertainty, so that tasks are performed by the appropriately
authorised person. This will hopefully avoid unwanted variations of
roles and promote accountability. It also inspires confidence and
certainty when employees understand their role within the
Employment agreements and policies to protect
Rather than just being a strict list of things not to do,
employment agreements and policies can be a helpful tool to guide
and inform employees (and employers) of their duties. Employment
agreements and policies should detail employer and employee
obligations. They should address the employee's ongoing duty to
protect confidential information and applicable restraints.
Implementing simple and sensible protocols
In addition to introducing agreements and policies in writing,
you should consider introducing simple protocols that can be
implemented in the day to day routine of the business without too
much difficulty. For example, whenever a cheque is to be rendered
from an office account, it should be a requirement that the cheque
is sighted and signed off by two directors or owners, or an owner
and an authorised senior executive.
Protecting data through vigilance and selective
Re-examine how data is being stored and shared. Technology today
has made it very easy to store and disseminate information both
internally and externally. This means you need a higher level of
vigilance to manage and protect your confidential information.
Consider assigning access to specific employees as required. For
example, not every employee necessarily requires access to all
information pertaining to finances or business plans.
Reliable email systems and remote access
You should ensure that all business related communication is
done through your own email system. Set up a reliable email system
and ensure that you have the means to address system breakdowns
immediately to avoid employees having to resort to using an
alternative email address.
Finally, going on vacation is always warranted and well deserved
by busy business owners. However, it is also worth having remote
access to office emails to check on communication during your
There is no protection for injured workers with a partial work capacity but the employer can't provide suitable duties.
Some comments from our readers… “The articles are extremely timely and highly applicable” “I often find critical information not available elsewhere” “As in-house counsel, Mondaq’s service is of great value”
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).