An Introduction To: Theft in the Workplace

Every year, theft in the workplace and business fraud costs the UK economy an approximated £193 billion. It impacts companies of all sizes and the threat doesn’t appear to be going away anytime soon. In fact, employee fraud has been on the up in recent years. According to the fraud prevention service CIFAS, their data found that internal fraud increased by 18% between 2014-15, and 22% from 2013.

Given these stats, it’s vital that companies across the UK react accordingly. Business should protect their interests by adopting preventative measures and know what to do should they find themselves in the unfortunate positon of having to pursue a case against an employee.

Here is what you need to know to ensure a proper investigation and prosecution.

What kind of theft are you dealing with

The law is full of nuances and accusing an employee of ‘fraudulent activity’ is quite a broad term to use. Generally, there are two main types of theft that your business will be faced with: tangible and intangible.

Tangible theft is the removal of physical items, typically stock, equipment, even just stationary.

Intangible theft is the removal or copying of intellectual property such as software key codes, online documents and secure information.

With the latter, you may appreciate that intangible “theft” is a rather blurred term. Therefore, it’s often more effective to hold an employee in breach of the company policy rather than accused of intangible “theft”. In terms of any dismissals, you’ll be in a stronger position by having a well-defined company policy that has been clearly defines what is and isn’t allowed to your staff and what constitutes “theft”.

By implementing this simple measure, your business will be in a stronger position when escalating any subsequent investigations but most importantly, you will deter crimes from the outset.

How to investigate workplace theft?

If your business is faced with possible theft, the most important thing to do is carry out a solid investigation. Failure to do so can leave you in a precarious position and expose you to accusations of unfair dismissal. Do not let this deter you as it’s easily manageable with the right approach to evidence gathering.

If you suspect an employee of criminal behaviour or misconduct and feel that the best course of action is to terminate their contract of employment, it is vitally important that you do so within the parameters of your company policies and the law. Hence, the importance of including clear guidelines in your company policies in the first place.

You will need to show you had fair and just grounds for suspecting theft by an employee before carrying out an investigation. If you can’t prove this, you put your case in jeopardy before you’ve even started it. The good news is, if you can demonstrate you had reasonable grounds, you will not be penalised by The Human Rights Act and Regulatory Investigation of Persons at Work Act.

Gathering Evidence

Irrefutable evidence can be acquired via CCTV footage, alongside co-worker testimonies and recorded inventory shortages. Again, this is only to be used if you can prove you have reasonable grounds to use such devices to gather this evidence in the first place.

Regularly updating your stock count and checking inventory levels will make it much easier to identify issues early (before they become too serious) as well as prove where theft has taken place. If you don’t have any such systems in place, nor the manpower to effectively manage this, there is software available that will manage your incoming and out-going inventory automatically. This type of documentation will strengthen your legal standing whether you choose to dismiss the incident or procced with a possible prosecution.

For cases of intangible theft, you will likely need more sophisticated processes in place, but there is usually a paper trail if you’ve kept consistent records of your inventory and documentation.

Prevention is better than a cure

Given the choice, there aren’t many that would really want to go down either the legal route or even, the removal of a member of staff which can impact morale and productivity.

Aside from ensuring all employees have clear guidelines in their employee handbooks, it is a good idea to discuss what measures are in place to prevent loss of stock and promote awareness of theft with staff. Making the wider team aware of any concerns will add additional eyes and ears to the cause as the “honest majority” will want to put a stop to criminal activity within the business too, not to mention, disassociate themselves with any suspicion. This will help to deter acts of theft from occurring in the first place.

In businesses where there is a higher chance of intangible theft, highlighting the risks can help to mitigate fraudulent activity.

Prosecution

If an instance of theft in the workplace really warrants legal action, the best course of action may in fact be to invest in an experienced private business fraud prosecution service. The reason for this is quite understandable. Whilst it might be expected and assumed to involve the police, commercial business crimes just aren’t high on their list of priorities (depending on the scale), especially when they’re internally driven. The fact is, police resources are limited and it is unlikely that they will be able to offer your investigation the level of insight and meticulous documentation that would be required for a prosecution.

With police involvement, the case will go to the Crown Prosecution Service (CPS). In order for the CPS to take on a case against an individual, they must deem it to be in the “interest of justice”. Their definition might not be favourable to profit lines of your business however. There would also have to be concrete evidence seamlessly presented in order to guarantee a conviction before the CPS would touch it. This obviously relies on the police investigation, which, as stated, may be subject to limited available resources.