How to tackle employee theft

If you found yourself in the situation of having to deal with a case of one of your employees allegedly having stolen from your business, what would you do?

Do not jump the gun!

Breathe. Think. React.

One of the biggest mistakes employers make is to act quickly, without thinking through the consequences and what procedure they need to go through.

Theft can amount to gross misconduct and can provide grounds for summary dismissal (without providing any notice). However, in reality, this is not as instant as you may think as you will need to follow a fair and reasonable procedure. ‘Procedure’ may seem to be one of those words that lawyers bandy about, but never underestimate how important it is. Failure to get this right can lead to employees who have two or more years of service making an unfair dismissal claim to an Employment Tribunal.

It will be up to you whether you decide to report it to the police.

Investigate, investigate, investigate!

Before proceeding to a disciplinary hearing, you need to carry out an investigation to establish the facts of the case.

The person you have chosen to investigate the matter may need to hold investigation meetings with other employees that they believe have useful information about the allegations, as well as with the person who is accused of misconduct. They will also need to gather evidence, for example, computer records, CCTV footage or attendance sheets. It is essential that you consider proof that both supports and challenges the allegations. This involves exploring each piece of evidence, seeing if there are any issues about its credibility, analysing how it slots in with other evidence and whether you need to investigate certain areas further.

How long and how thorough the investigation is will very much depend on the individual circumstances of the cases. For example, if you have caught someone red-handed putting goods into their bag, then this will require less investigation. However, if you have a stock deficiency and have no evidence of who has committed the theft, this will require more rigorous investigation to determine who the culprit is.

If considered necessary, you may suspend the employee with pay while the investigation is underway. This action should only be taken in certain cases, for example, if there is a risk that the employee could tamper with evidence or continue to pose a risk to your business. However, the time they are suspended for must be as short as possible, be kept under review and it must be made clear to the employee that this is not disciplinary action. If you do suspend when not necessary, it could be considered a breach of trust and confidence.

Now, and only now, you can commence disciplinary proceedings…

If there appears to be enough evidence to indicate misconduct, you will need to commence disciplinary proceedings. It is considered best practice that one person conducts the investigation and another should conduct any subsequent disciplinary or appeal hearings. However, in smaller organisations, this may not always be possible. Speak to your Employment Law Adviser who can help you decide who is best to handle investigations, disciplinary hearing and appeals.

You need to invite the employee to a disciplinary hearing, clearly explaining in writing what the allegations are, the process that will be followed and the possible repercussions of the allegations being upheld. The employee has a right to see the evidence, so make sure that this is disclosed prior to the hearing. You should also inform them of their right to be accompanied.

At the disciplinary hearing, you should explain the exact nature of the allegations, go through the evidence and ask the employee questions. You must allow them to respond to the allegations.

Once all the evidence has been considered, you should adjourn the meeting to make a decision as to whether and what disciplinary action to take. Remember, you only need to have a ‘reasonable belief’ that the misconduct took place. It does not need to be proved beyond all reasonable doubt. You should confirm your decision in writing.

Summary

Some big no-nos are:

  • Failure to investigate the alleged misconduct
  • Failure to hold a disciplinary hearing
  • Denying the employee the right to appeal.

Call you Employment Law Adviser today to make sure you act in compliance with the law and do not fall foul of the rules.

Director of Legal Services

James Tamm

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