While the vast majority of employees do the right thing,
employee theft affects business owners everyday. Suspicious
activity needs to be dealt with swiftly, firmly and fairly.
Employees may steal large amounts of money, workplace supplies,
equipment or intellectual-property. Just as serious are
employees who steal by completing inaccurate time-sheets, claiming
reimbursement for items not purchased, fraudulently transferring
funds or misusing a corporate credit card, cheques or taxi
Any form of stealing is a criminal offence and police should be
properly involved when necessary.
Caught Red Handed
Even if you literally catch someone with their hand in the till,
or on camera late at night removing gear from your office, as an
employer you still need to ensure you follow the rules of
While you may need to immediately call police, proceeding
further with a knee-jerk sacking is not advisable. This is
because without due process employers run the risk of claims for
unfair dismissal, breach of employment contract and even
Suspend and Investigate
Allegations of stealing are usually serious enough to warrant
suspension while an investigation is conducted. Suspension
ensures the employee does not damage the business, morale or coerce
or influence potential witnesses.
Suspensions can be either paid or unpaid and can be for any
period reasonably necessary to investigate and make a decision
about what - if any - disciplinary action needs to be taken.
Relieving the employee of their normal duties also ensures
they can provide a full response to allegations within a short
period of time.
In any meeting where allegations are being made or discussed
employees should be offered to have a support person with them, and
if possible the employer should also endeavour to have more than
one representative present as a witness.
Until the investigation is complete employers should ensure that
the allegations are kept as confidential as possible in the
As soon as possible an official letter should be sent or handed
to the employee, and should:
provide as much detail as possible about the allegations
(including any evidence),
explain the intended investigation process (which may be to
simply await the outcome of a police investigation),
outline what the consequences are if the allegations are proved
(including whether police may be involved at a later date),
request a written response from the employee by a particular
advise whether the employee is suspended, for how long and with
or without pay, and
direct that until further notice the employee is not to contact
any employees, clients or contractors other than specified
personnel (usually the investigator and/or Manager).
Consider and Respond
Once the evidence has been gathered, decision makers for the
employer need to consider the issue and determine the most
appropriate action. Consideration can be given to any
admissions, apology, level of cooperation with the investigation,
explanation and undertakings to repay. An employee's
length of service and prior conduct is also relevant.
The ultimate question to answer is whether employment can
If you determine that a theft has occurred it would be
appropriate to summarily dismiss the employee (without notice) for
If you are not certain there was a theft, but determine that the
employee has engaged in misconduct (which can include refusing to
cooperate with an investigation) you may decide to terminate the
employment but do so with payment in lieu of notice in accordance
with the employment contract.
Consider whether to notify other employees about any termination
for stealing. Sometimes the deterrent effect makes such an
announcement justifiable, however the reputations of the business
and the terminated employee should also be considered.
Tips for Employers
Get early legal advice to determine a reasonable and efficient
investigation procedure, how to collect and preserve relevant
evidence, whether to involve police and how to ensure procedural
fairness is afforded to an accused employee.
Use IT security systems, surveillance and monitoring to detect
and prevent employee theft.
Be discrete and fair until the investigation is concluded.
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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When employees engage in out-of-hours misconduct, it can negatively affect the reputation of the employer.
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