What to do when your staff steal from your business

Earlier this year, the team at LegalVision gave us some helpful tips on the legal basics of starting a new business.

Over the coming weeks, we’ll look at legal matters that can arise for a new business once it’s up and running.

Here, Lachlan McKnight, chief executive of LegalVision, looks at your options if you suspect an employee is stealing.

Theft in the workplace occurs in a number of ways. Whether it’s stealing money out of the till, taking stationery home and not returning it or disclosing a company’s confidential information, stealing is a serious issue.

If you suspect that one of your employees is stealing from you, there are a number of options that may be available to you.

Termination for serious misconduct

The Fair Work Act and Fair Work Regulation provide that an employee who commits theft commits serious misconduct.

Under the National Employment Standards, if an employee commits serious misconduct, the employer can terminate the employee’s employment without notice to the employee.

This means the employee is not entitled to receive any payment in lieu of notice or a redundancy payment. It may also affect the employee’s long service leave entitlements, but not their accrued annual leave entitlements.

The key factors

Whether a given case of theft constitutes serious misconduct depends on a number of factors, including:

• whether the conduct occurred at work or outside of work;
• the circumstances of the offence, including any aggravating or mitigating factors;
• the seriousness of the offence. For example, theft of $10 may justify a warning whereas theft of $10,000 would ordinarily justify termination;
• the strength of the available evidence;
• the potential impact of the theft on the employer’s business;
• whether the employee was a repeat offender or its was a one-off;
• the type of work undertaken by the employee;
• the role in which the employee is employed. For example, whether the employee is a senior employee in a supervisory role or low level employee.

What if there isn’t serious misconduct?

If the employee’s behaviour does not constitute serious misconduct, and you are not therefore entitled to immediately terminate their employment without notice by operation of law, then:

• you could give them a verbal warning;
• you could give them a written warning;
• you could agree on some other form of reprimand or remedial action;
• do they have an employment contract? If so, what does the contract say?

Stealing can occur in a number of ways, some cases are more serious than others. This means that the individual circumstances of the case could be critical in determining what action is appropriate and what action should be taken.

An employer may have the right to terminate an employee’s employment for breach of contract if the employee’s contract specifies that stealing from the employer is grounds for termination.

For example, it is common for employment contracts to provide that if an employee is charged with, or convicted of, an indictable offence or offence that carries with it a custodial sentence then the employer can terminate the employment contract.