Employee dishonesty in any form is confronting and disruptive to any workplace.  As business owners and operators, it is hard to countenance employee theft, and the immediate reaction is to remove the perpetrator from the business as soon as possible.  Which often amounts to summary dismissal.  However, firing someone on the spot for theft, or even planned theft, can open a business to disastrous outcomes.  While it is important to act swiftly and decisively to protect the business, ACAPMA reminds members to keep in mind the keys to managing theft in the workplace, to avoid further complications.  This week’s HR Highlight will review these key concerns.

Theft OR Failure to Follow Procedures

When there is a theft at the workplace, the business has had its property handled in a way other than instructed.  Essentially the perpetrator has deliberately circumvented existing product and cash control procedures to transfer the items from the business to themselves.  This is a breach of critical business policies and, like any breach of key policies, the business has the right to manage an employee.s performance, including summarily dismissing an employee if appropriate.

But this is to be undertaken as misconduct due to failure to follow business critical stock and cash control procedures, NOT due to theft.

Theft is a legal term for the unauthorised transfer of property from the rightful owner to another person.  Theft is a crime, and as a crime a person has the right under the law to be presumed innocent until proven guilty in a court of law.  In order to get to that point the police must first choose to prosecute and a case made.

Businesses are taking on potential trouble when they preempt the legal system by terminating an employee for ‘theft’.  There are cases on record of employees being reinstated after successfully proving that as the police chose not to press charges, there was no ‘theft’ and thus the reason for termination that was given “theft” was invalid.

Planned Theft?

In a recent case before the Commission, the business terminated an employee for actions that amounted to, in the business’s eyes, planned theft.  The employee then put in an unfair dismissal claim.  The Commission threw out the unfair dismissal claim.  In doing so, however, the Commission noted that the business had clearly articulated to the employee that they were terminated for failure to follow stock control procedures, for deliberately circumventing those procedures and that these actions amounted to misconduct.  The Commission upheld that these actions amounted to dishonesty, and that dishonesty and insubordination of this level provides a valid reason for dismissal.

Remorse and involving the police

When approached about breaches in stock and cash control procedures, particularly when faced with video evidence, staff will often offer to pay for items, or return cash to “make it good”.  It is up to the business how to handle the breach in policy – to performance manage or to terminate.  While it is acceptable for the employee to pay monies back, or for missing stock, it is not acceptable for the business to deduct these amounts from the entitlements that are due to the employee.  If the business wishes to recover monies from the employee they must pay out all entitlements and then initiate proceedings with the police and or lawyers to recover losses.  The decision to involve the police or not needs to be taken early and consistently and does not effect the breach in business policy, that is the basis for the performance management.

Key Lessons

Businesses have the right to manage staff and protect their cash and inventory.  Staff who do not follow business procedures for handling cash and inventory can be managed as such, and in many instances this will result in termination.  What is important to remember is that the business is not in a position to determine if ‘theft’ has occurred, nor to manage staff on that.  As with all business policies, consistent application is a key requirement.

Here to Help

ACAPMA Workplace Relations Professionals are available to assist members on 1300 160 270, or you can email elishar@acapma.com.au. ACAPMA members can access resources and can call on the advice and support of the ACAPMAlliance Workplace Relations Professionals on 1300 160 270.

HR Highlights are things to consider, implement and watch out for in your business. They are provided as general advice and you should seek further advice on your situation by  calling 1300 160 270 and speaking to one of ACAPMA Workplace Relations Professionals it’s free for members. ACAPMA membership is affordable at only $770 per year for a single site, which represents great value with sites gaining HR advice support and representation as well as a raft of other benefits and discounts. Learn more about ACAPMA membership here.