“We have recently found evidence of a technician undertaking MOTs at our premises during work hours, but not logging the job in our system and pocketing the cash for himself. He has never been allowed to do this and has used company equipment and time to do the MOT. What is our legal position and can we dismiss the technician?”
Employee thefts of any description are likely to be classified as misconduct, if not gross misconduct in many cases depending on the severity. Each case will turn on its facts to a certain extent but common scenarios include the one in italics above, petty cash theft, unauthorised purchases with company cards, and stealing of company equipment. It is not uncommon to only discover thefts of this sort weeks and months after they have happened, but that does not make them any less important to investigate.
This article will give you a short summary of the typical misconduct procedure steps for theft scenarios. Even if an employee has not accrued 2 years continuous service to claim for unfair dismissal, it is still very wise to follow a fair disciplinary procedure to avoid potential claims for discrimination and breach of contract in particular. A full advice note for disciplinary procedure for managers is available on the RMI website.
First Considerations
In our experience, often this type of misconduct is harder to spot compared to more obvious misconducts such as a physical altercation. That means there is no clear way to identify thefts of this sort, beyond doing your usual due diligence as an employer when it comes to auditing your finances. Sometimes employers are ‘tipped off’ by other employees, other times it might be from accountants or even clients. One example we have seen is where an employee undertook an MOT on site then pocketed the cash, but he had not done a thorough job and the disgruntled customer then complained to the manager who then could not find the job in the logs and discovered the theft. As a general rule therefore, we would advise doing periodical auditing of your job logs and ensuring they match up with your financial accounts.
When you have a suspicion of theft, it may be more appropriate to resolve the matter through informal discussions with the parties concerned depending on the level and seriousness of the theft. For example, an employee regularly taking company stationary home would require different treatment to an employee taking cash from a till. If you feel formal action is required, then you should instigate disciplinary proceedings.
Employers are often quick to want to suspend employees before undertaking an investigation into misconduct. Suspension should not be the default position, it should only be used where the employee’s continued presence in the workplace would render an investigation impossible, or where working relations have broken down and there is no other way of avoiding conflict while the matter is resolved.
Investigation
Where formal action is to be taken, a fair and balanced investigation will be required. It may be the employee’s line manager but it is often better if it is someone impartial such as an HR manager. The investigation must be even-handed and should not simply be a search for evidence against the employee. Evidence in the employee’s favour should also be sought. In terms of evidence for theft cases, this will often be in the form of matching jobs undertaken versus financial accounts although occasionally evidence from CCTV, customers and employees will be relevant too.
An investigatory meeting with the employee in question will also usually be required at an early stage. This is important as it may be that there is a simple misunderstanding which can be resolved without the need for a disciplinary hearing. An investigatory meeting is not a disciplinary hearing, and so the employee has no statutory right to be accompanied, although check if the Company’s internal procedures do give the employee that right. Any investigatory meetings to interview the employee or other witnesses should be held in private and notes should be taken of the meeting. Following investigation, the company may decide that no further action is necessary, in which case the employee should be informed of this decision. However, if matters are to be taken further, there must first be a disciplinary hearing.
Following the investigation, if there are sufficient grounds on which to hold a disciplinary hearing, a letter must be sent to the employee which invites them to a disciplinary hearing. The employee should be informed of his / her right to be accompanied by a companion (either a work colleague or Union representative). A template for this is on the RMI website. If the allegation is proceeding on the grounds of theft/gross misconduct it is advisable, at that stage, to suspend the employee on full pay pending the disciplinary hearing.
Disciplinary Hearing
The hearing should be held at a reasonable time and place, in a private meeting room during the employee’s normal working hours. Sufficient time should be allowed between sending the letter and the meeting itself for the employee to consider the allegations and the evidence sent with the letter, and to prepare their case for the hearing. The disciplinary hearing should ideally be conducted by a single manager or a panel with one individual appointed as the chair. The chair should not have been involved in the investigation whether as an investigator or witness.
The employee should then be given the opportunity to make any representations, ask questions and produce or discuss documentary evidence in reply. The employee’s representative (if any) can make statements and ask questions on the employee’s behalf. The representative should not be permitted to answer questions that have been put to the employee directly, although they may confer privately with the employee before any reply is given.
When all parties have presented their case and there are no further questions, the hearing should then be adjourned for the chair to consider what the employee has said.
When considering the appropriate sanction, careful consideration must be given to other alternatives to dismissal. For example, demotion, redeployment or a final written warning may be more appropriate. Final warnings should not be used oppressively, for example, for relatively minor misconduct where the punishment is out of proportion to the offence. It is appropriate to consider what sanctions have been imposed on other employees for similar conduct and to take account of any ‘live’ warnings on the employee’s personnel file. Once the chair has reached a decision, the meeting should ideally be reconvened and the decision explained to the employee.
The decision must be given in writing in any event, but it is usually more acceptable face to face and then confirmed in writing. There are several template letters available on the RMI website for confirming a dismissal. The employee should be advised of the sanction, the reasons for imposing it and the fact that they have a right to submit a written appeal.
Appeal
The employee has the right to appeal any sanction you decide upon. So far as possible any appeal should be heard or chaired by someone who has not been previously involved. The manager conducting the appeal should have access to the evidence compiled during the investigation and copies of the notes from the disciplinary meeting. The appeal should stand independent of the disciplinary hearing and not be biased or influenced by the previous decision. There is no set format for the appeal provided the employee is allowed adequate opportunity to present their arguments. The person chairing it should aim to be as impartial as possible. Employees have the same right to be accompanied at an appeal hearing as at a disciplinary hearing.
Conclusion
As mentioned, there is a full advice note for disciplinary procedure for managers with more detail on each stage of the procedure which is available on the RMI website. The crucial parts to remember are the right for the employee to be accompanied to the disciplinary hearing and appeal hearing and that you should ensure you have detailed notes from each stage. This will stand you in good stead should a claim to the Employment Tribunal be made in the future and will give you the best chances of successfully defending it.
Don’t forget, this advice is general in nature and will need to be tailored to any one particular situation. As an RMI member you have access to the RMI Legal advice line, RMI template documents, including a disciplinary process, as well as a number of industry experts for your assistance.
Barrister,
Motor Industry Legal Services
Motor Industry Legal Services (MILS Legal Ltd) provides fully comprehensive legal advice and representation to UK motor retailers for one annual fee. It is the only law firm in the UK which specialises in motor law and motor trade law. MILS currently advises over 1,000 individual businesses within the sector as well as the Retail Motor Industry Federation (RMI) and its members
