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Sacked for theft, but was it really what it seemed?

Date: 23/01/2019

It should not be a surprise to anyone that stealing from your employer will generally result in you losing your job.

But even if an employer literally catches an employee with their hand in the till, they are still required to follow a fair process prior to making any decision to dismiss, rather than sacking an employee on the spot. In fact, given the serious implications of such allegations, there is an even stronger imperative for a fair and proper investigation.

This is because the situation is not always as clear cut as may be assumed and employers shouldn’t think that just because an employee is found to have taken property, it amounts to theft.

In a recent Australian case, Jason Thomas, a Network and Engineering Manager with Australian company Metwide Communications, was dismissed for taking unopened bottles of Jack Daniels, Jim Beam and Johnny Walker Red. Thomas had found the alcohol in a chilly bin while he was emptying it with a colleague, and which had contained mostly empty bottles left over from a Melbourne Cup event the previous year. Despite his belief that the alcohol had been abandoned, Metwide dismissed Thomas for stealing company property.

Thomas brought a claim to the Fair Work Commission (the Australian equivalent to New Zealand’s Employment Relations Authority) claiming unfair dismissal and arguing that Metwide had used the alleged theft as an opportunity to get rid of him for earlier refusing to sign a new contract that substantially reduced his conditions.

The Fair Work Commission found that Metwide’s decision to dismiss Thomas was “a manifest injustice” and that “serious allegations of this kind, amounting to criminal activity, should not be thrown around … without any sound basis or proper investigation”.

The Commission found that in the circumstances Thomas’ conduct could not be considered theft in the strict legal sense and agreed that it was more likely that the reason for dismissing Thomas was because he had refused to sign a new contract. Thomas was reinstated and Metwide was ordered to pay him lost wages.

As this case illustrates, allegations such as theft, which amount to criminal activity, are serious and employers need to ensure that there is sufficient evidence to prove that the employee not only committed the act, but they did so with intent.

The Courts in New Zealand have said that in the case of very serious allegations, the evidence in support of them “must be as convincing in its nature as the charge is grave”. The rationale is that the more serious an allegation, the less likely it is to have occurred.

A New Zealand employer found this out the hard way after an employee, Andrew Hosegood, brought a claim of unjustified dismissal in the Employment Relations Authority after he was dismissed from his job at Head Auto Wreckers for allegedly stealing a first aid kit.

Hosegood argued that after finding the first aid kit in a car due to be dismantled, he had received permission from his employer to take it home on the basis of his assurance that he would replenish it with fresh bandages and plasters.

Hosegood took the kit home the following night. When he was seen carrying it out, his employer, who appeared to have forgotten that he had given permission for Hosegood to take the kit home, accused him of theft and asked him to put the kit back. Hosegood did this immediately. When Hosegood arrived at work the following Monday, he was handed a letter and told that he no longer had a job “due to theft of property”.

In its decision, the Authority stated that there is no doubt that an employer can justifiably dismiss an employee who steals money or goods, even where the value is insignificant. However, it held that in a serious matter such as theft, a full and proper investigation is required, regardless of how strongly an employer believes the employee is guilty.

The Authority did not accept that Hosegood had intended to steal the first aid kit, but rather found there had been a misunderstanding between him and the employer. As such, there was no serious misconduct and no justification for dismissal. Further, as Hosegood was not provided with any real opportunity to respond to the allegation, the employer had failed to follow a fair and reasonable process.

The lesson for employers is that when it comes to serious allegations such as theft, the evidence supporting the allegations needs to be correspondingly convincing, especially given the potential reputational damage to the employee.

Further, even where an employer believes they have caught an employee red handed, a fair and proper investigation process needs to be followed – sometimes the situation may not be as it seems.