Retail surgery: Employee theft: What procedures should I follow?

Employee theft is a serious issue that costs the UK retail industry millions every year. It is therefore no surprise that most retailers have a zero tolerance approach to employees who breach their cash and stock handling procedures. Unless you’re careful, this approach can leave employers being ordered to pay compensation to thieving ex-employees.

But Hill Dickinson LLP employment law specialist Tim Thomas says that, provided the right steps are followed, employers can dismiss staff who have breached their contract without involvement of the employment tribunal.

The starting point is to ensure cash and stock-handling procedures are robust, and a zero-tolerance policy is communicated effectively. “Unless you can demonstrate that the employee in question was made aware of relevant procedures and policies, you are likely to run into difficulties,” says Thomas. 

Management is also important. Any suspected breaches must be investigated thoroughly and appropriate action taken if suspicions are found to be true. “Ensure managers can deal effectively with any suspicions that employees are departing from procedures,” says Thomas. “While it may be tempting to cut short the investigation in the face of overwhelming evidence, you may regret that decision when being cross-examined in a tribunal.”

If one employee is dismissed while another is given a warning for the same offence, the former employee is likely to claim unfair dismissal. Thomas says: “Provided you can show the employee did something that he knew went against his contract, you should be able to defend your decision.”