Staff theft: how to handle it

Review your discipline procedures and make sure they deal with theft/gross misconduct clearly and concisely
Review your discipline procedures and make sure they deal with theft/gross misconduct clearly and concisely

Alarm systems and CCTV installations will go a long way towards protecting your business from robberies and thieving from outside forces, but how do your handle it when theft is an ‘inside job’?



1 October 2008

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Review your discipline procedures and make sure they deal with theft/gross misconduct clearly and concisely

Put yourself in the shoes of a sports retailer in Donegal who became suspicious when stocktaking showed up some problems. 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 came in and “bought” sunglasses.   

A couple more incidents followed and the employee was fired for gross misconduct. Fast forward two years to the Employment Appeals Tribunal (EAT) and the employee succeeds in his claim for unfair dismissal. How would that make you feel? The theft was proven in the EAT but the employer still loses his case to the robber.

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.  
All too often employers can find themselves in this situation – getting rid of the bad apple (huge relief), followed by a trip to the EAT.


Prevention is always better than cure. Take a look at your security procedures and your staff handbook. Are there any gaps?  
It might seem “over the top” for some retailers but it is perfectly legitimate to bring in a search policy for staff entering and leaving the shop. In White –v- Cadbury (Ireland) Ltd an employee was dismissed for refusing to submit to a search. The EAT found the search procedures were fine but the employee should have been given the opportunity to make his case prior to dismissal. He was successful in his claim but his compensation was nil.

If you don’t have a search policy in your handbook, bring it in now.


Using CCTV to catch thieves is nothing new. Using it to watch your staff is not as straightforward. Whilst you can legitimately install cameras throughout your shop to watch your customers and staff you must make sure that (a) you have signs informing people that they are under surveillance and (b) that you do not use hidden cameras to watch your staff.  

Use of CCTV is regulated under Data Protection legislation. The two key concerns under this legislation are transparency and proportionality. If you are going to use CCTV to monitor staff they must be informed about it. You should also make sure that you have registered with the Data Protection Commissioner if you are going to use CCTV to watch staff.

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 gardai must be involved (or you must intend to involve them). Any such use should be checked in advance with your solicitor and can only be for a short period. If no evidence emerges it must be stopped.


There will generally be a sense of relief and sometimes excitement if you manage to catch a staff member stealing from you. It can often be the most trusted members of staff who you would never suspect so catching up with them can lead to mixed emotions – relief, elation, disappointment, frustration and anger. In the heat of the moment mistakes can be made and many employers have rushed to judgement, only to find themselves (as happened Donegal Sports and Golf Centre Ltd) at the wrong end of an Unfair Dismissal Claim. Pointing the employee to the door is not the way to go.

If you have uncovered evidence of theft you need to consider (a) your discipline procedures in your staff handbook and (b) whether you need to involve the gardai.


Most staff handbooks will provide for an investigation procedure with suspension (on full pay). It is not unusual for employees to fail to co-operate with the investigation.

Once it has been completed there should be a disciplinary hearing, with all evidence being provided in advance to the employee. That hearing should be independent of the investigation and there should also be an opportunity to appeal the result.  

In many smaller businesses there may not be a number of management levels or staff to allow for this. If that is the case, you 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 – fair procedures are vital.


Involving the gardai whilst you are disciplining an employee can cause difficulties. If the gardai have been involved, the employee can refuse to answer questions in an investigation, for fear of self incrimination. The courts have also allowed a discipline procedure to be put “on ice” whilst criminal proceedings are underway.  The timing is critical as a result.  
The sad fact is also that the gardai may not have the resources to prosecute in a case where the evidence is relatively thin.



If you don’t have a staff handbook with well prepared disciplinary procedures, get working on it and take legal advice. Without established procedures you are exposed to potential claims – even where you have gotten rid of that bad apple!

John Hogan is a partner with LEMAN solicitors and advises a large number of retail clients on employment law and procedures. He can be contacted at 01-6393000 or  Further information on the firm can be found at



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