Employee theft: how to proceed following initial suspicions

Unfortunately for many employers, theft by employees is a destabilising and acutely stressful situation. There is pressure to prevent any further thefts taking place while balancing this against the risk of falsely accusing someone of a fundamentally dishonest act.

It is important to separate the civil and criminal aspects of such as a scenario. The police are often reluctant to become involved in civil issues where money or goods have been misappropriated by an employee. However, the employer can still carry out an investigation into the missing monies to take employment action and seek recovery of the money.

Read more: ‘I had to turn detective to prove my pharmacy technician was stealing from me’

Where it is suspected controlled drugs are being stolen, employers must report this to the police controlled drugs liaison officer. If the concern is about prescription forms, there is lengthy guidance from the NHS Counter Fraud Authority to turn to.

With that in mind, the following steps set out how an employer could address suspicions of theft:

[NB if you're going to definitely report to police – either because you have to, or because you want to – best to tell the police before step 1. They may want you to hold off on suspension to avoid evidence being destroyed or tampered with. For that reason also, the notification to the police should be made as soon as possible.]

1. Suspend the employee, pending investigation: Notify the employee in question that they are suspended from their employment due to suspicions they have stolen from the business and that an investigation is underway.
2. Carry out investigation (in conjunction with or following the police investigation, if applicable): Review available evidence (cash and stock records, CD registers if CDs are involved, CCTV, employee testimony) and liaise with any police investigation if they are involved.
3. Conduct disciplinary process: Once the investigation has been concluded, the employee should be given a written invitation to the meeting, and notified that they have the right to be accompanied. If dismissal is on the agenda, the employee should be informed of that fact. The employee should be given reasonable notice of the meeting, the evidence should be provided to the employee in question, and the employee should be given a chance to answer the allegations and explain their actions.
4. Consider the employee's evidence and representations, and take appropriate action: The employer should maintain an open mind until they have heard what the employee has to say at the meeting. If, after having conducted the meeting the employer is satisfied that the employee is not guilty, no further action should be taken. If, following the meeting, the employer considers that, on the balance of probabilities, the employee has stolen money and/or other stock, they should take appropriate disciplinary action. In most cases where theft or dishonesty are concerned, the employer would be within their right to summarily dismiss the employee for gross misconduct. However, each case should be decided on its merits. If there are mitigating circumstances (in the case of theft, the mitigating circumstances would need to be quite extreme for the employee to avoid dismissal), these should be taken into account when reaching a final decision.
5. Write to the employee notifying them what action is to be taken and notifying them of the right to appeal: If the employee is being dismissed, the dismissal letter should confirm the last day of employment, and include instructions for the return of property etc. Even in cases of summary dismissal where the employee is not entitled to notice, they would still be entitled to be paid in respect of accrued, but untaken, holiday.
6. Employee may wish to appeal decision to dismiss: The employee who has been dismissed has the right to appeal the employer’s decision and this process should be followed if the decision to summarily dismiss is appealed.

It should be noted that, if the police decide not to investigate, or the Crown Prosecution Service (CPS) decides not to prosecute, this does not prevent the employer from carrying out their own investigation.

Criminal cases require evidence that proves the theft beyond reasonable doubt, whereas employment and other civil matters are decided on the balance of probabilities, a much lower burden of evidential proof. Where the employer may need to delay certain aspects of the investigation to allow the police to carry out their duties, they should not have to wait until any criminal case has been completed before taking disciplinary action of their own.

This is a general overview and should not be read as legal advice. Any views or reflections are the authors own.

This article was co-authored by Jude Barter and Susan Hunneyball, partners at Gordons Partnership