How to Deal with Theft by an Employee

Theft by an employee can raise a number of issues for employers, from employment rights to workforce morale.

If you have grounds to suspect an employee has been misusing company property or stealing from work, you should proceed with care. Your initial reaction may be to take disciplinary action straight away, but you have to remember that employees have certain rights and any action you take has to be fair and lawful. This means following legal procedures to avoid exposing your organisation to tribunal claims.

 

Examples of theft by an employee

 

The most obvious incidents of thefts relate to cash, where employees handle money regularly. But theft by an employee can cover examples as broad as taking tangible items and physical assets like stock, cash, stationery, or intangible assets such as data.

Taking property from the workplace, such as computer equipment, stationery or stock, is theft, in the same way that using the company’s facilities or materials for non-work reasons and taking property from another employee without permission is. Intangible assets that can be stolen include things such as data relating to customers or suppliers, or commercially sensitive information about a design or product.

Discounts given by your employees to their family or friends without permission can also be classed as theft.

 

Can you dismiss an employee for theft?

 

Theft by an employee is generally considered an act of gross misconduct, which is a lawful ground for dismissal without notice or payment in lieu of notice.

You should have in place a disciplinary procedure which provides details for the process of dealing with allegations of misconduct lawfully and fairly. Your policy should also cover the sanctions that can result in allegations being proven, such as terminating a contract of employment by dismissal, failing which the employee may be able to bring an employment tribunal claim against you.

 

How to deal with allegations of theft in the workplace

 

Before moving to disciplinary action, your first step is to conduct a thorough investigation into the allegations. You should gather sufficient evidence to enable you to make an informed and objective decision.

How you investigate principally depends on the facts of the issue in question, such as what has been taken, who has been accused or suspected of taking it, and where the theft is believed to have happened.

If you base any disciplinary action on rumour or hearsay alone, this carries a significant risk of ending up in an employment tribunal. You have to make sure allegations are investigated and any malicious or false allegations are dealt with in an appropriate manner.

What all workplace investigations should have in common is discretion. You should restrict knowledge of the allegations and the investigation to those who absolutely need to know. This removes the possibility of the alleged perpetrator becoming wise to the investigation before time and to prevent rumours and gossip while the matter is resolved.

Additionally, it is particularly important to ensure your investigation is fully documented and notes are taken at the time of speaking with witnesses rather than afterwards. Investigating measures you can put in place include:

 

• Restricting the alleged perpetrator’s access to company data by placing administrator passwords on client/supplier lists and documents or removing employee access to areas where company/client information that is not relevant to their role.
• Consider changing employee working patterns if possible and/or seating arrangements or place them in separate areas of the business or change their shift which could alert you to the times the theft occurs.
• Increase the frequency of checks on stock and equipment.

 

After you have investigated, you may decide you have grounds to take disciplinary action against the perpetrator. However, what you can do largely depends on what you have written within your policies and procedures. How you have previously dealt with similar issues will also have a bearing on the stance you take, notably because of precedents that have been set. Most organisations have clearly defined disciplinary procedures in place, but what is essential here is dealing with disciplinary matters consistently and fairly.

In cases where there has been a considerable loss to the business, for example, employees giving competitors client information, or stealing large sums of money, you may be justified in immediately dismissing an employee for gross misconduct offences. If you are faced with one of these scenarios, it is probably sensible to obtain legal advice before moving to dismissal because what may seem on the face of it a case of clear gross misconduct, could result in a claim for unfair dismissal should the correct procedures not be followed.

 

Using CCTV and secret recordings

 

If there is a legitimate business reason, employers are generally allowed to use CCTV to help with an investigation into a suspected theft.

The monitoring of employees, particularly if this is seen to be excessive, is likely to be ill-received by your employees, which can exacerbate feelings of mistrust and create an unsettled atmosphere. If you do choose to use CCTV, you should let your employees know and give them your reasons for doing so. You should also have written procedures and policies in place detailing how the footage will be used. Under the Data Protection Act, it is unlawful to use CCTV footage for any reason that has not previously been disclosed to the entire workforce. It is also unlawful to secretly film employees without their knowledge.

 

 

Preventing theft at work

 

Detecting and preventing workplace theft is generally a better option than having to deal with instances of stealing. But the breadth of types of theft makes it challenging for employers to prevent and prove theft, while maintaining workers’ trust and a positive working environment.

It is important to consider how the actions you take could impact on employees and their morale.

There is a fine balance to achieve. Demonstrating too much leniency or tolerance when it comes to dealing with theft by an employee is likely to lead to discontent, particularly if the theft involves a colleague’s belongings who are looking to you to provide a satisfactory resolution.

Employee retention could also be impacted if you cannot provide a safe and secure working environment or place for staff to keep their personal items while working.

This means acting consistently and fairly. If there have been previous incidents of theft, you will need to approach them consistently if you are to avoid employee complaints of discrimination, for example.

Managers and supervisory staff should be trained to identify warning signs when they begin to suspect an employee of stealing, and while these behaviours could be purely coincidental, it is always better to be alert.

 

Policies and procedures

 

By setting out effective policies and procedures, you will give your company the framework with which to handle sensitive and potentially complex issues, such as theft by an employee fairly and in accordance with the law. Employers who make their expectations surrounding acceptable behaviour and conduct in the workplace clear and set out procedures as to how such matters will be dealt with promote a culture of consistency and certainty in disciplinary matters.

Employee theft policies should help you set out your expectations of staff behaviour and detail the action to be taken in the event of a theft at work. During the drafting phase, you should emphasise the importance of a theft-free working environment, such as preserving business data and promoting good working practices.

Your policy should define key terms to help avoid confusion and provide clarity. Depending on the type of business, theft could apply to particular assets or conduct, such as stealing data or using stock without permission. You should set out what will happen if there is an incident of theft and who will take responsibility for the investigation and how it will be conducted. You may also decide to detail the consequences of stealing from work if an employee is found guilty. This could include a range of disciplinary actions or immediate dismissal for gross misconduct.

For balance, your policy should also set out your company’s rights and responsibilities to investigate, such as conducting searches of employees bags or lockers. Also, make it clear whether it is company policy to notify the police of the theft.

 

Preventative measures

 

Preventative measures largely depend on the type of working environment and the assets that you need to protect. Theft in the workplace can lead to a security review and other measures being put in place to prevent further issues from occurring. Regularly overseeing employees and operations ensures your staff knows they are being scrutinised but are not being micromanaged.

For example, you could decide to increase the frequency and process for checking stock or equipment and inventory management or restricting access to a limited number of authorised personnel.

Where intangible assets are concerned, you may need to consider reviewing your security and permissions access to sensitive company information, records or data. You may also need to enforce a rigorous password protocol for company systems or accounts. Employees should be encouraged to come forward and feel safe enough to inform you of issues that arise or they come to be aware of, via a confidential reporting procedure.

Having a strategy to deal with theft and gross misconduct ahead of time will make it easier for you to take quick and decisive action, while reminding employees that theft is taken seriously in your organisation. Employees should be made aware of the policy from the outset and understand the consequences of violating it.

 

Errors to avoid when dealing with theft by an employee

 

Being aware of what not to do is just as critical as successfully weeding out and dealing with a theft.

 

• Do not restrain, attempt to restrain or detain the suspected employee. Falsely detaining someone is not only unlawful, but it could lead to charges being brought against you. It could also lead to a dangerous situation for all parties.
• Do not smear the suspected employee to others in the workplace. Properly investigating the theft, collecting evidence and then approaching the employee is essential. Smearing an employee before doing those things or disclosing why they were dismissed can lead down the road to an employment tribunal.
• Do not threaten to call the police unless the intent to prosecute is present. Calling the police and dealing with a court case is time-consuming and may not have the result you desire. Depending on the case at hand, it may not be the best way forward, so try not to threaten prosecution unless it is absolutely necessary or
• you really intend to follow through on it. Additionally, if reporting a theft is company policy, it should be detailed within your policies and procedures and staff handbook.
• When dealing with issues such as theft, you should have at the forefront of your mind that if not handled correctly, it could cause your organisation considerable problems going forward, which can be both time-consuming and costly. It can also damage your organisation’s reputation and brand. But by simply being aware of the signs and taking appropriate preventative measures and action, organisations can prevent or eliminate theft before it seriously affects its finances.

 

 

Need Assistance?

 

When dealing with sensitive issues such as theft, you should remember that if not handled appropriately at the outset, it could cause your business considerable problems in the future which can be both costly and time-consuming and damaging to your reputation and employer brand. It is extremely important to ensure you maintain an atmosphere of trust and security within the workplace.

DavidsonMorris’ HR advisers and employment lawyers are experienced in advising employers on all aspects of workplace disciplinaries and dismissals. We can support you with advice to ensure a fair and lawful procedure is followed and to minimise the risk of tribunal claims, and can support with developing and drafting an effective and compliant disciplinary policy and have specialist experience in conducting fair disciplinary investigations. For guidance on theft at work, misconduct or any disciplinary issue, contact us.

 

Theft by an Employee FAQs

 

What should I do if I suspect an employee of theft?

If you suspect an employee of theft, it’s crucial to handle the situation discreetly and professionally. Begin by gathering evidence and conducting an internal investigation. Ensure that any actions you take comply with UK employment law, and consider seeking legal advice before proceeding with disciplinary measures.

 

Can I dismiss an employee for theft without proof?

Dismissing an employee without sufficient proof can lead to legal repercussions, including claims for unfair dismissal. It’s essential to follow a fair and thorough process, ensuring that any disciplinary action is based on concrete evidence and adheres to legal standards.

 

What are the potential consequences for an employee found guilty of theft?

An employee found guilty of theft can face disciplinary actions, including dismissal. In severe cases, they may also be subject to criminal charges, which can result in fines or imprisonment, depending on the severity of the offence.

 

How can I prevent employee theft in my business?

Preventative measures include implementing strong internal controls, conducting regular audits, and creating a workplace culture that discourages theft. Providing clear communication about your policies on theft and offering regular training can also help minimise the risk.

 

Is employee theft a common issue in the UK?

Employee theft is a concern for many businesses in the UK, particularly in retail, finance, and service industries. While the majority of employees are trustworthy, it’s important for employers to be vigilant and have measures in place to address potential theft.

 

What legal rights do I have as an employer if theft is discovered?

As an employer, you have the right to investigate suspected theft and take disciplinary action if necessary. However, you must follow the correct legal procedures, ensuring that the employee’s rights are respected throughout the process. This includes conducting a fair investigation and allowing the employee the opportunity to respond to any allegations.

 

How should I approach a conversation with an employee suspected of theft?

When approaching an employee about suspected theft, it’s important to remain calm and professional. Present the evidence you have and give the employee a chance to explain. Avoid making accusations without proof, and ensure that the conversation is conducted in a private setting, respecting the employee’s dignity and privacy.

 

Can I conduct surveillance on employees to prevent theft?

Employers in the UK can use surveillance to monitor employees, but there are strict regulations governing how and when it can be done. Surveillance should be proportionate, justified, and conducted in accordance with data protection laws. Employees should also be informed if monitoring is taking place, unless there is a strong justification for covert surveillance.

 

What steps should I take after an employee has been caught stealing?

After confirming that an employee has been caught stealing, you should document the incident thoroughly, follow your company’s disciplinary procedure, and seek legal advice if necessary. Depending on the severity of the theft, you may also need to report the incident to the police.

 

How can I rebuild trust in the workplace after an incident of employee theft?

Rebuilding trust after an incident of theft involves clear communication, reviewing and possibly revising your company policies, and reinforcing the importance of integrity in the workplace. Providing support to employees and ensuring transparency in your processes can help restore confidence among your team.

 

Glossary

 

Term	Definition
Employee Theft	The act of an employee taking or using company property or assets without permission, often for personal gain.
Internal Investigation	A process conducted within the company to examine and gather evidence regarding suspected employee misconduct.
Disciplinary Action	Measures taken by an employer in response to an employee’s violation of company policies, which may include warnings, suspension, or dismissal.
ACAS	Advisory, Conciliation and Arbitration Service, an independent body that provides advice on workplace disputes and employment law in the UK.
Unfair Dismissal	A legal claim that an employee can make if they believe they have been dismissed from their job without a fair reason or proper procedure.
Due Process	The legal requirement that an employer must follow fair and established procedures when investigating and disciplining employees.
Internal Controls	Policies and procedures implemented by a company to safeguard its assets, ensure accurate financial reporting, and prevent fraud.
Covert Surveillance	Monitoring an employee’s actions without their knowledge, which is legally restricted and must be justified under UK law.
Data Protection Laws	Regulations that govern the collection, storage, and use of personal data, ensuring individuals’ privacy rights are protected.
Gross Misconduct	Serious behaviour by an employee that justifies immediate dismissal without notice, such as theft or violence.
Employment Tribunal	A legal body in the UK that resolves disputes between employers and employees, such as claims of unfair dismissal or discrimination.
Legal Compliance	Adhering to laws and regulations relevant to business operations, including employment law and workplace policies.
Red Flags	Warning signs or indicators that may suggest an employee is engaged in theft or other misconduct.
Workplace Culture	The shared values, behaviours, and practices that characterise an organisation and influence how employees interact and perform their jobs.
Background Checks	The process of verifying the history and credentials of a potential employee, often used to assess their trustworthiness.
Dismissal	The termination of an employee’s contract by the employer, either with or without notice, depending on the circumstances.