Employee theft is an extremely uncomfortable topic for Managers and business owners, and it’s the last thing you want to hear about if you have a small, close knit team. Surprisingly however, it is a common occurrence – a recent article published by the Australian Retailers Association indicated that internal theft is the cause of over 40% of shrinkage costs borne by Australian retailers*.

If you become aware that an employee may be stealing from you, while it can be tempting to react immediately and begin an interrogation, there are laws in place that require employers to act with procedural fairness when managing allegations of employee theft. This article outlines the necessary steps to take to properly react to allegations of internal theft in your business.

  • Gather as much evidence and information behind the scenes where possible. This may include POS records, video surveillance, timesheet data etc. Try to be as discrete as you can during this process and take care to not alert anyone unnecessarily of your fact finding mission. If it is valuable to your investigation, meet confidentially with a trusted witness about what they may have seen or heard (and take lots of notes!)
  • If, after fact finding, you have reason to believe that an employee has been stealing from you, request in writing that your employee meet with you formally to discuss the allegations of theft. Be sure to outline in the letter specifically what the allegations are and when they are alleged to have occurred. Notify the employee that due to the serious nature of the allegations, if they are substantiated, they may be subject to disciplinary action up to and including the termination of their employment.
  • Offer your employee an opportunity to bring a support person to the meeting, and ensure to set the meeting for at least 24 hours in advance.
  • During the meeting, formally put the allegations of theft to the employee, and give them enough information about the allegations to allow them to respond.
  • Consider their responses before deciding whether, based on all the available evidence, the allegations are substantiated or not. When considering their responses, you may need to suspend the meeting for a couple of minutes, or for a couple of days, depending on what information there is to consider.
  • If, after all responses have been considered, the allegations are found to be substantiated, notify the employee of this information and then decide on which, if any, disciplinary action is the most appropriate. This may be a warning, or may be termination of employment in more serious cases.
  • Notify the employee of the investigation outcome in writing.

Workplace investigations that aren’t run in a timely, fair or professional manner can negatively impact on the morale of a workplace and can significantly put the business at risk. For any advice on workplace investigations or managing allegations of suspected employee theft, please contact AssuranceHR Management.

*Source: http://blog.retail.org.au/newsandinsights/theft-in-retail