Theft | Termination Checklist—TUPE

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The unauthorised removal of material, assets or services from employers and abuse of their facilities is on the increase. Some estimate the losses from staff theft and fraud to be as high as 5% of sales, and this is an equivalent reduction of profit. Inevitably this problem will be worse where procedure and policing are slack.

Employee Fraud

According to the first 'Fraud Watch' report issued by accountants BDO Stoy Hayward in June 2004, employees perpetrated more than one-third of all reported fraud cases in the previous year. 84% of frauds are perpetrated by men with a median age of 44. Top cities for fraud are London, Birmingham, Glasgow and Liverpool. The authors commented that 'the majority of fraud is committed by employees and directors who know the systems and can override controls'. This pre-supposes that controls exist. In many organisations there is a considerable lack of control which can only encourage more thefts. Making the offer of a job subject to certain conditions as set out in RECRUITMENT may be one way of protecting the organisation.

Expenses

Clear rules regarding expenses are essential - including the maximum expenditure that can be claimed by each level of employee and in respect of what purposes such expenditure can be reclaimed. Stating that expenses will only be authorised for payment when supported by receipts, and/or that VAT on such expenditure will only be reimbursed if there is a VAT receipt can help raise the awareness that there is strict control of expenses. Control of company car expenditure is also essential. Employees should know that such expenses are scrutinised for 'logic' (i.e. that the cost of fuel, for example, is proportionate to mileage and model) etc. See EXPENSES.

Theft Suspicion

If an employee is suspected of theft, care must be taken in dealing with the situation and independent advice might be advisable.

Draft Checklist

  1. Check all the facts, suggestions, evidence and record everything in writing in a logical sequence. If there are witnesses prepared to provide statements, these should be compiled and preserved.

  2. Consider which procedures have been broken and ensure that the persons involved would have been aware of the procedures.

  3. Establish after full investigation who seems to be responsible for the occurrence and check that the evidence seems to support the potential responsibility of the person concerned.

  4. Interview the suspected person(s) (with an independent witness taking notes) and ask for their views and any conflicting accounts.

  5. Re-check the witness statements to try and reconcile any differences.

  6. Re-consider whole body of evidence and data, and attempt to assess responsibility.

The 'beyond reasonable doubt' maxim applicable in the criminal court is not required in employment law. Tribunals apply a triple test:

  1. 'Was there a full investigation of all the circumstances?'

  2. 'Did the employer genuinely believe the loss to be the responsibility of this employee?'

  3. 'Was it reasonable for the employer to apply the sanction (e.g. of dismissal)?'.

Provided the employer has carried out a full and fair investigation and has an honest belief in the guilt of the employee, any subsequent dismissal is likely to be fair - the ruling in the British Home Stores v Burchell case. Equally, if a theft could be the responsibility of two or more employees but the investigation does not disclose which, it may be fair to dismiss all suspected. However, in this case, it could be unwise to dismiss without notice since this implies that each is guilty. Legal advice should be taken.

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