If you discover a case of employee theft, the first thing to do is go off site, to you give yourself space to react in a private setting. Emotions such as anger, disbelief and despair are completely normal. Take the time to write down what you know and understand that there are two separate processes for you to go through. One under employment law and the other focuses on criminal law and police involvement.
Employment law is bound up in theories of natural justice and “good faith obligations”. As an Employer you are expected to conduct a full and impartial investigation into what happened. No matter how hard this is to do at the time, you need to give the employee an opportunity to tell their side of the story.
Carrying out your internal investigation and establishing who is involved and how big the issue is before you report the incident to the Police is usually a good idea. Criminal law requires a higher standard of proof for a conviction – beyond reasonable doubt, instead of on the balance of probabilities (meaning what a reasonable person would believe). Unfortunately, if the Police decide not to prosecute, any later decision to terminate employment could be considered unjustified dismissal.
The two biggest mistakes that Employers make during a theft investigation are (a) being caught out by past incidents where they have treated other employees inconsistently for similar behaviour and (b) failing to put their emotions aside and investigate the incident properly.
Managers often choose not to contact the Police if the employee agrees to ‘go quietly’ – allowing a dishonest person to re-offend elsewhere. This also sets an internal precedent and sends a message to other employees that “it’s not that serious” – something worth thinking about.
Finally, as distasteful as it may sound, you will need to be realistic about the criminal proceedings outcomes and restitution. The Police will always prosecute a case if they have enough evidence; however; for amounts of a modest nature (under $20,000 – not that modest to most small businesses) a custodial sentence is unlikely.
Whatever happens, if you are facing an issue involving employee theft, it is worth talking to your Accountant and an HR professional or Employment Lawyer to guide you through the process, so you can stay focused keeping your business profitable for the future.