Theft at Work – a costly problem

According to the BII, theft costs retail industries £4.2 billion per year.  Clearly a large proportion of this is customer theft, but it is closely followed by employee theft.  Having the right policies and procedures in place to detect and deal with employee theft could help you see a rise in profits.

Theft comes in many guises in the pub, hotel and bar trade.  Your bar manager may, for example, pour himself a pint after work without paying for it, take money straight from the till or ring cheap drinks into the till, serve more expensive ones and pocket the difference. Staff might also steal bottles from you – cash and bottles are most often taken off the premises with the rubbish in bin bags.

When does theft entitle you to dismiss an employee and, if so, can you dismiss them on the spot?

When to take action
The first issue you will need to consider when you are informed of an incident is the conduct itself. Has your employee done something relatively minor, such as helping themselves to a drink or free meal at the end of his shift? If so, you may feel that in the first instance this can be dealt with by simply having a word with the employee.  If the employee has done something more serious e.g. taken money from the till then you will need to consider disciplinary action.  You will also need to consider suspending the employee with pay pending a full investigation.

Disciplinary procedure
As an employer contemplating the dismissal of an employee the question of unfair dismissal will always be a concern.  As you may be aware, there are 5 statutory fair reasons for dismissal.  In order to show that a dismissal was fair one of these 5 reasons for dismissal must apply and you must act reasonably in all the circumstances in dismissing the employee.

The relevant statutory reason in the case of theft at work will be misconduct.  The starting point when you are dealing with any employee misconduct is your company disciplinary procedure which will give examples of what is regarded as misconduct and gross misconduct.  As it is such a common occurrence, you should ensure that your disciplinary procedure specifically covers employee theft at work.

As well as having a potentially fair reason to dismiss your employee you will need to ensure that you follow a fair disciplinary procedure prior to any dismissal.  The first stage of your procedure is to carry out a full and thorough investigation.

You may need to consider suspending an employee pending investigation. The period of suspension should be as short as is possible and should be kept under regular review. Suspension should be a way for you to carry out an investigation, not a form of punishment for the employee. Unless there is a clear contractual right to do so, you will not be entitled to suspend without pay.

If the offence occurs in the workplace you may have CCTV or witness evidence to consider.  You should collect as much evidence as possible. As part of your investigation, you should meet with the employee concerned to obtain their version of events. If, during the investigation, CCTV footage is collected and is to be used as evidence, thought should be given to assess whether the footage is conclusive; it may need to be reviewed in light of any further evidence presented.

If, following initial investigation, you consider the matter serious enough to move to a disciplinary, you should invite the employee to a formal disciplinary meeting, at which the employee has a right to be accompanied.  The disciplinary process must be carried out fairly and objectively.  Before the disciplinary meeting the evidence gathered during the investigation should be sent to the employee.

Disciplinary Meeting
It is important at this meeting that the employee should be given a chance to provide their version of events and state any mitigating circumstances. If, after the investigation and hearing, you form a reasonable belief that the employee has committed a theft from the workplace you should confirm your decision to them, as well as the sanction being imposed, both in person and in writing, and inform the employee of their right to appeal.

Gross Misconduct
If your employee has committed an act of gross misconduct such as serious theft then you will have the right to dismiss him without notice or any payment in lieu of his notice period.  However, you should note that gross misconduct does not mean that you can dismiss the employee on the spot.  You still need to go through a fair procedure i.e. suspend the employee, carry out an investigation and hold a disciplinary hearing prior to concluding that the conduct amounts to gross misconduct entitling you to summarily dismiss him.

Police Investigation
Even though there is no legal obligation on you as an employer to refer an employee’s conduct to the police, you may feel that you have a moral duty to do so. Indeed the BII are encouraging publicans to involve the police so that staff who are fired by you can’t just go and get a job in the pub in the next street and start stealing from there.  If you refer the matter to the police then it will be up to them to commence and continue their investigations.  These investigations do not circumvent the need for you to carry out your own investigations and conduct your disciplinary procedure. Indeed, you should not wait until the police have concluded their investigations before proceeding with the disciplinary procedure. Further, even if the police decide not to charge the employee, this should not have a bearing on your disciplinary decision.

Practical Points
To discourage employee theft and thus avoid loss of revenue you should therefore check that your disciplinary procedure adequately covers theft.  You should also make it clear to staff that theft is taken very seriously by the business and that action will be taken – which may include dismissal and involvement of police.

The content of this page is a summary of the law in force at the present time and is not exhaustive, nor does it contain definitive advice. Specialist legal advice should be sought in relation to any queries that may arise.