Workplace Thefts

Theft of goods, raw product and materials by employees is estimated to cost businesses millions of dollars in lost profits each year. Retailers have a term for these losses, `Shrinkage’, meaning the amount of goods which are not recorded by the cash register and are unaccounted. The rate of shrinkage varies for different business but generally runs at around 4% of turnover for most retailers.

More accurate stock control and security methods implemented by businesses can help to reduce this shrinkage rate, but most businesses still lose a substantial amount of their profits to systematic theft.

Such thefts can come to light for a variety of reasons:

•    A tip off from a disgruntled employee or contractor
•    An audit uncovers a deficit in stock or raw materials
•    A  manager notices unexplained decreases in stocks
•    An outside investigation into the disposal of the goods alerts management

Whatever the reason, any notable theft or loss of product, raw materials or tools must be investigated diligently and cautiously so as to not alert those responsible whilst assembling the requisite evidence to enable disciplinary action, including dismissal, or criminal action by reporting it to the Police.

The intention of any investigation into workplace theft is to halt the problem by identifying those employees responsible and have them disciplined or dismissed. At the conclusion of a workplace theft investigation, it is important to emphasise to all other employees that workplace theft is prohibited and that the consequences of it include dismissal and criminal prosecution. An effective investigation followed up by employee education as to the perils of workplace theft can result in a dramatic fall in such activity.

Guidelines for Undertaking an Investigation
We recommend that any such investigation should be conducted by a professional and experienced investigation firm to ensure that the rules of evidence are followed should the matter result in any tribunal or court hearing.

In summary, the investigation procedures and evidence gathering should not place the business at any risk of a defamation or unfair dismissal claim by those that are thought to be responsible. The investigation must be based only on tangible evidence such as statements by witnesses, computer logs, CCTV footage, business records, surveillance tapes etc. During the investigation, written notes should be kept detailing the steps taken by each investigator relating to times & dates of any interviews, log of evidence collected, property identified as missing etc.

The first step is to confirm the circumstances of the alleged thefts; where and when they have occurred and which employees may have had access to the goods. Further inquiries should look for patterns of the thefts with an effort to match them to known records such as employees’ timesheets, vehicle movements etc.

A review should be made of all `Terms and Conditions of Service’ to make sure that each employee has signed theirs, so that employee is aware that the type of theft is prohibited and what level of cooperation they are required to provide to management.

Avoid any attempt to ‘set employee traps’ with contrived tests that seek to catch employees in the act of stealing. Such action could be seen as entrapment and void any of the evidence as well as exposing the business to cross claims by the targeted employees.

The questioning and interview of any employee suspected of involvement in the thefts should only be undertaken once all available information has been assembled and considered. Normally, a script of possible questions should be prepared beforehand with copies of any evidence ready for presentation to the employee [e.g. CCTV footage of the employee].

The interview of the suspect employee must conform to rules of evidence and he /she may have a witness or friend present of so desired. It is desirable to digitally record the audio interview so that an exact record of the interview is made; ensuring that both parties have access to a record of the interview at a later date.

Would you like to find out how we can assist you with investigations into workplace theft?

Please feel free to call us direct on now on 1300 608 530 to discuss your requirements or else send an email to our confidential address and we will contact you at your convenience. Summit Investigations operates Australia wide, from Adelaide, Melbourne, Sydney and Brisbane across to Perth, as well as overseas.