Alleged Staff Theft? – Take These Actions!

Below are the actions that should be taken upon discovering alleged staff theft.

All employers in the retail trade should have a clear and defined policy on staff purchases, credit and discounts. Such policy should include the requirement that any staff purchase is not purchased unless authorization has been sought in advance from a more senior member of staff. The policy should form part of the Terms & Conditions of an employee’s contract. Such policy should be placed in a prominent position in the staff area to ensure all staff are fully appraised of their obligations. This policy should be applied and operated in a consistent manner by the employer.
One of an employer’s worst nightmares is to discover that an employee has been engaging in theft, embezzlement, fraud, or some other offense against the company. Unfortunately, such events do occur, and an employer must be prepared to respond when an employee offense is uncovered. Appropriate employer response is important not only so that the employee may be prosecuted for his actions, but also so that the employer may determine, to the greatest degree possible, the full nature and extent of the damage caused to the company by the employee’s actions. Although every situation will necessarily vary according to its facts, the following is a suggested checklist of steps the employer should consider taking when it first receives notice of possible wrongdoing by an employee.

1. Act Quickly but Prudently – Get all the Facts.

   Obviously if a crime is being committed against the employer, a rapid response is necessary. Failure to act may result in further harm to the company or in the loss of valuable evidence that is needed to prove the wrongdoing. At the same time, however, employers must balance the need to act quickly with an employee’s legal rights. An employer that acts impetuously or rashly may find that it has taken action against an innocent employee and perhaps has exposed itself to numerous claims by the accused employee, including claims for defamation, unfair dismissal or bullying and harassment.

2. Notify the Legal Advice Helpline

   The legal ramifications of employee malfeasance are significant, both for the employer and the employee. Advice should be sought immediately when criminal activity is suspected.

3. Confirm, to the Extent Possible, the Misconduct

   Employers will serve themselves well by taking the necessary time to gather sufficient facts and to preserve evidence before acting against an employee. What may seem to be an egregious criminal offense at first glance may turn out to nothing more than a slight infraction of company policies. Confirmation of the misconduct is also important because the employer will need to produce evidence of the wrongdoing if, in fact, criminal misconduct is involved. Gathering and preserving evidence such as CCTV footage together with till receipts for the appropriate timeframe in cases involving the handing over of goods by an employee without seeking payment is critical.

4. Keep Information on a “Need-to-Know” Basis.

   The investigation and confirmation of the wrongdoing should be conducted using a minimal number of personnel. If employees learn that an investigation is underway, the employer may be further damaged in a couple of respects. Firstly, the employee who is suspected of engaging in the wrongdoing may get wind of the investigation and destroy valuable or necessary evidence of the wrongdoing. As a result the employer may be unable to prove the crime occurred, or may be unable to assess the severity of the criminal activity. Secondly, by allowing word of an investigation to seep out, the employer may subject itself to a defamation claim when the other employees learn that a co-worker is being investigated, especially if it turns out that he is innocent of any criminal activity. Employers thus should take precautions to maintain the confidentiality of the investigation.

5. Apply Company Policies in a Consistent and Nondiscriminatory Manner

   Before acting on an employee’s misconduct, be sure that the company is applying its policies in a manner that is consistent with natural justice and fair procedures. For example, if an employee has been caught giving a family member or friend free goods, an action that unquestionably both violates company policy and the law, the employer must also consider how it has treated previous violators, if any have existed. If the accused employee is a member of a protected class pursuant to the Employment Equality Act 1998, as amended by the Equality Act 2004 and is treated more harshly than others in the past, the employer likely has exposed itself to civil liability, even if the employee actually engaged in the misconduct. If, for example, a company has previously merely reprimanded a male employee who was caught giving family members free goods and then subsequently dismisses a female employee who has engaged in the same conduct, the employer will not fare well in any ensuing discrimination action. Employers should apply company policy and practice consistently.

6. Depending on the Offense – Contact An Garda Siochana

   For obvious reasons, as soon as evidence of criminal activity is confirmed, the Gardai should be informed.

7. Confront the Employee

   Following the initial investigation, the employer should if satisfied that larceny has indeed taken place, suspend the employee on full pay pending the outcome of a full and detailed investigation. Once the evidence has been compiled same must be furnished to the employee in advance of an arranged Disciplinary Hearing. The evidence may include witness statements or perhaps video evidence. The employee should be advised of his/her right to have a representative present, ie. friend, colleague or family member. The employee should be advised in writing in advance of such hearing of the full allegations against him or her and the right to Appeal such decision if available.

Legal Advice on this or any other issue should be sought from the Legal Advice Helpline on 1850 670747 at the earliest opportunity.

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