When we think of theft, what automatically springs to mind is someone stealing stock from the back room.

But in the retail sector, theft can manifest itself in a variety of ways. It may be that an employee does not ring through transactions on the till, doesn’t give customers the correct change and pockets it for themselves or adds points to loyalty cards.

Not only do your employee’s misconduct mean that you can lose a substantial amount of money, theft can lead to some very unhappy customers.

Dealing with theft

Theft can amount to gross misconduct and provide grounds for summary dismissal (without notice or pay in lieu of notice). But even in these cases, it is not enough to have a fair reason for dismissal – you must still follow a fair procedure and act reasonably in all the circumstances. Dismissing an employee instantly will likely mean that you will face a claim of unfair dismissal for those employees with two or more years’ service.

Retail businesses can avoid falling foul the law by following these steps:

Investigate

Before proceeding to a disciplinary hearing, you need to carry out an investigation to establish the facts of the case.

Employers must decide who should carry out the investigation. Generally, it will be the line manager or someone from HR. It is considered best practice that one person who conducts the investigation and another should conduct any subsequent disciplinary or appeal hearings. However, this may not always be possible. Speak to an Employment Law Adviser who can help you decide who is best for the investigation.

What to look into

The person you have chosen to investigate the matter may need to hold investigation meetings with other employees that they believe have useful information about the allegations, as well as with the person who is accused of misconduct. They will also need to gather evidence, for example, computer records, CCTV footage or attendance sheets. It is essential that you consider proof that both supports and challenges the allegations. This involves exploring each piece of evidence, seeing if there are any issues about its credibility, analysing how it slots in with other evidence and whether you need to investigate certain areas further.

How far to go

How long and how thorough the investigation is will very much depend on the individual circumstances of the cases. For example, if you have caught someone red-handed putting goods into their bag, this will require less investigation. However, if you have a stock deficiency and have no evidence of who has committed the theft, this will require more rigorous investigation to determine who the culprit is.

Consider suspension

If considered necessary, you may suspend the employee with pay while the investigation is underway. This action should only be taken in certain cases, for example, if there is a risk that the employee could tamper with evidence or continue to pose a risk to your business. However, the time they are suspended for must be as short as possible, be kept under review and it must be made clear to the employee that this is not disciplinary action. If you do suspend when not necessary, it could be considered a breach of trust and confidence and lead to claims of constructive dismissal.

Commence disciplinary proceedings

If there appears to be enough evidence to indicate misconduct, you will need to commence disciplinary proceedings.

You need to invite the employee to a disciplinary hearing, clearly explaining in writing what the allegations are, the process that will be followed and the possible repercussions of the allegations being upheld. The employee has a right to see the evidence, so make sure that this is disclosed prior to the hearing. You should also inform them of their right to be accompanied.

At the disciplinary hearing, you should explain the exact nature of the allegations, go through the evidence and ask the employee questions. You must allow them to respond to the allegations.

Make a decision

Once all the evidence has been considered, you should adjourn the meeting to make a decision as to whether and what disciplinary action to take. Remember, you only need to have a ‘reasonable belief’ that the misconduct took place. It does not need to be proved beyond all reasonable doubt. You should confirm your decision in writing.

Key lessons

There are four common pitfalls to avoid:

• Failure to investigate the alleged misconduct
• Failure to hold a disciplinary hearing
• Not allowing the employee to be accompanied in disciplinary meetings
• Denying the employee the right to appeal.

If you would like to discuss your specific workplace challenges, contact us. Our Employment Law Advisers have extensive experience working with retail clients – they can advise you to ensure you meet the law and best practice and act in accordance with your best business interests.