Rn sept staff theft

72|Retail News|September 2013|www.retailnews.ie

Staff Theft

Staff Theft: How to Handle It!

With staff theft on the rise, Linda Hynes, Leman Solicitors, advises on the steps to take if it happens to you.

EMPLOYEE theft is on the up and security experts predict that this trend will continue to rise. While alarm and CCTV systems go a long way towards protecting your business from shoplifting and burglary, what do you do if it is one of your own stealing from you?

Pre-Employment Screening Loss prevention research shows that the highest risk employees are those with less than a year’s service, as well as part time employees who do not have a stake in the business. The amount of work you put into your hiring procedures will pay off

in the end. Ask questions in your application forms and interviews about previous roles and disciplinary action but make sure you are asking the same questions of all candidates to avoid potential discrimination claims.

Offers of employment can be made conditional on rel-

Linda Hynes, Leman Solicitors.

evant references and checks being carried out. These items should be followed up ASAP. Candidates should be clearly advised of what information will be checked and what data is being processed in order to give their consent. Don’t rely on any sources that you don’t trust. Make sure you give the applicant an opportunity to explain any information that is not favourable. State in the employment contract/ application forms that if any false information was provided at interview or application stage, this will lead to dismissal.

Procedures The importance of procedures cannot be underestimated. Take the example of a sports retailer in Donegal

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Staff Theft who became suspicious when stocktaking showed up some anomalies.

Having been away from the store for a day, the owner checked his security cameras when he returned and caught one of his staff pocketing cash from a friend who “bought” sunglasses.

Following some further incidents, the employee was ultimately dismissed for gross misconduct. Two years later, the employee brought a successful claim for unfair dismissal. How did it happen? In one word – procedures. The EAT found that although the employee had stolen the goods, the employer had not followed fair procedures in investigating the case and disciplining the employee.

This is a common problem for employers – they have a bad employee but move too hastily and end up with an award against them.

Prevention is always better than cure. Look at your security procedures and your staff handbook. Are there any gaps? Is there enough detail about what will happen?

It is perfectly legitimate for retailers to implement a search policy for staff entering and leaving shops. In White – v – Cadbury an employee was dismissed for refusing to submit to a search. The EAT found that while the search procedures were in order, the employee should have been given the opportunity to make his case prior to dismissal. While he was successful in his claim, he received no compensation because of his contribution to dismissal.

In Sharon Donohue –v – Professional Contract Services, the EAT held it was unreasonable for the employee not to submit to a search of her bag and her ultimate dismissal because of this was fair. In that case, the employer had very clear search provisions in the contract of employment. If you don’t have a search policy in your handbook/ contract, now is the time to bring it in.

The Watcher Using CCTV to prevent and record theft has been around a long time.

However, using it to monitor your employees raises complicated issues about their right to privacy in the workplace.

Whilst you can legitimately install cameras throughout your shop to watch your customers and staff, you must make sure that you have signs informing people that they are under surveillance and that you do not use hidden cameras to watch your staff.

Use of CCTV is regulated under Data Protection legislation. Consent is key. The commissioner constantly reminds employers that use of such CCTV cannot be excessive and the purpose for collecting data must be clear to the employee. If you are going to use CCTV to monitor staff, they must be informed about it. This can be through signage, policies and internal communications. The use of hidden cameras

to watch staff is only permitted in very limited cases where the data is being used for the purpose of preventing, detecting or investigating offences, or apprehending or prosecuting offenders. This means the Gardaí must be involved (or you must intend to involve them). Any such use should be checked in advance with your legal advisor and can only be for a short period.

In a particular case relating to the use of CCTV in the Gresham Hotel, a supervisor was called to a meeting with management and showed compromising footage of cash handling issues. The footage was taken with covert cameras over the till area. The supervisor had never been informed that any such monitoring or investigation was taking place. The supervisor was dismissed.

The Data Protection Commissioner reviewed the complaint by the employee and stated that use of hidden cameras to watch staff is only permitted in very limited cases, as above. The Gresham Hotel were held to have unfairly processed the employee’s data.

Disciplinary policies should clearly state that CCTV footage may be reviewed as part of any investigation into misconduct.

Caught Red Handed: What Should Happen Next?

There will generally be a sense of anger if you catch a staff member stealing from you. In the heat of the moment, mistakes can be made and often em-

ployers rush to a decision to dismiss, only to end up at the wrong end of an unfair dismissal claim. Showing employees the door immediately is not the way to go. It is best to take a deep breath and a measured approach to avoid any nasty surprises down the line. If you have uncovered evidence of theft, you need to consider (a) your discipline procedures and (b) whether you need to involve the Gardaí.

Get Your Procedures Right Most staff handbooks provide for an investigation procedure with suspension (on full pay) and this should be considered as your first step. You need to make sure that you have your facts right before taking any action. In one case, a former Ann Summers employee, who claimed she had been publicly accused of trying to steal a French maid’s outfit from the shop, was awarded €17,000 damages for defamation. She claimed an accusation had been made out loud in front of staff and customers.

Once an investigation has been completed, there should be a disciplinary hearing, with all evidence being provided in advance to the employee.

Hearings should be independent of investigations and there should be an opportunity for the employee to put their side of the story across and to appeal any decision. In many smaller businesses, there may not be a sufficient number of management levels to allow for this. If that is the case, you

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Staff Theft should tailor the process to suit your business.

The key element is that the employee is given a fair opportunity to review the evidence and make his or her case. Where necessary, consider appointing an external independent investigator to keep your procedure as clean as possible. Where an employee admits guilt, it may not be necessary to carry out the same level of investigation but you should still allow the employee to make submissions on what happened and why they should not be dismissed.

Mitigating circumstances should be taken into account when arriving at your decision.

The importance of procedures is clear from Raymond Roche – v – Tesco. The employee was a charge hand in the supermarket who had 18 years’ service without any disciplinary issues. He was accused of stealing 40 cigarettes. He took them out of a locked cabinet and concealed them beneath a pair of gloves before putting them into his pocket.

Later, he stated he simply forgot to pay for them. Staff purchase policy dictated that employees pay on purchase/ selection, but it was possible to pay at a later stage. The events were recorded by the security officer on CCTV. The employee was approached by the security officer and duty manager and asked to review the CCTV footage. At this meeting, the employee voluntary emptied his pockets. The security officer said to the duty manager that the employee should be suspended.

The duty manager sent the employee home and told him that the personnel manager would contact him. The store manager was satisfied that all employees knew the company’s policies. Before deciding to dismiss the employee, the store manager took into account his long service, he spoke to the employee’s previous managers and the employee relations officer. The employee relations officer

–v – Supermacs, the employer notified Gardaí about its suspicion against an employee. The employee was approached by Gardaí while entering work a few days later. He was questioned about missing cash lodgements and CCTV footage and subsequently arrested.

While in custody, his home was searched by Gardaí.

The employee was released and arrived for work two days later. He was phoned by the general manager and told not to enter the premises and go home. He was subsequently dismissed in a disciplinary meeting, of which he had received no notice in writing. The EAT noted that all theft charges had been dropped against the employee. The EAT criticised the employers for being too hasty in their conclusions that the employee was responsible for missing cash lodgements. The EAT noted that if a thorough investigation had been conducted, a number of people could have been responsible for the theft and awarded €32,000 for a failure to follow fair procedures. later heard the employee’s appeal. The EAT held it was reasonable for the employer to accept the employee did not intend to pay for the cigarettes. It was also held that the employee was in breach of the Company Honesty Policy and his dismissal was substantively fair. However, because the store manager had consulted the Employee Relations Officer and then appointed him to hear the employee’s appeal, this made the dismissal procedurally unfair. The employee’s case succeeded but he was only awarded €2,000 as he made a substantial contribution to his dismissal. Whilst the cost of the award was limited financially, the employer also incurred legal and management time costs.

Can I Call the Gardaí?

Statistical reports show that ‘employee theft’ accounted for 36.8% (€166.7m worth of items) of shrinkage in 2009 in Ireland, the highest

rate in Europe. Involving the Gardaí whilst you are disciplining an employee can cause difficulties. If the Gardaí have been involved, the employee can refuse to answer questions in an investigation, for fear of self-incrimination. The courts have also allowed a disciplinary procedure to be put on hold whilst criminal proceedings are underway.

Therefore, you may need to suspend any internal investigation while the Gardaí investigate. If a crime has been committed, you can of course contact the Gardaí but the timing of this notification is critical.

In a recent case involving Lidl, an employee was convicted of carrying out a series of 21 thefts that amounted to €2,000 over a three week period. The judge held the employee had to repay the money to Lidl along with a fine. Failure to repay the money would lead to a prison sentence. In Mason

Key Tips & Traps • Review your discipline procedures. Make sure they deal clearly with theft as gross misconduct.

• Don’t spy on staff with hidden cameras.

• Tighten up on your policy for searches.

• Communicate your policies to the staff, from the top down.

• Always follow fair procedures when an incident arises: hasty decisions end up in the EAT. Without established procedures, you are exposed to potential claims – even where that employee is caught red-handed!

About The Author LINDA Hynes is an Associate with Leman Solicitors and advises a large number of retail clients on employment law. She can be contacted at (01) 6393000 or lhynes@leman.ie Further information on the firm can be found at www.leman.ie