by | Feb 11, 2020

Business Case Study: Serious Misconduct – Dealing with theft / fraud

Here at POD we deal with so many different situations within our clients’ businesses, but taking the time to sit down and share what we’ve been working on and our learning, is scarce. To make sure we’re always ahead of our game and up-to-speed in all things HR, we come together regularly for what we call our ‘HR Forum’, where we get our heads and stories together!

Serious misconduct cases have been rife of late – especially cases concerning theft and fraud. Read on for Case 1 and our words of warning when it comes to suspending an employee and how police investigations might impact your own investigation.

Case 1: Fraud; Intent to Steal

The Allegation

We recently dealt with a case of fraud within a client’s workplace (Company A), at one of their remote sites. A supplier queried the legitimacy of an invoice that they had received from Company A and Company A’s Finance Team at Head Office confirmed that the invoice had not in fact been created by them. The invoice looked as if it was from Company A, but had a non-standard layout and had a different bank account number on it, which was the personal bank account number of the sole employee located at the remote site.

So far, this was straightforward case of fraud with an intent to steal, given the clear-cut evidence that had been substantiated.

Step 1: Suspension Meeting
The first step was to hold a suspension meeting with the employee, where it was explained that given the nature of the allegation and the potential risk to the business, the employee was suspended ‘on pay’ whilst the Company continued its formal investigation.

Must do’s when holding a suspension meeting:

  • Make sure that you speak with the employee to explain why you think suspension is required
  • Let the employee respond to what you are proposing prior to sending the employee home on pay

Step 2: Formal Meeting Invite 
The second step was to formally invite the employee, in writing, to a second meeting to formally outline the allegation and hear out the employee’s response. Where this case deviates slightly from due process is that instead of providing the standard 48 hours’ notice of the formal meeting, given the fact that Company A has an obligation to report any such fraudulent activity to its governing body within stringent timeframes, we were able to request that the employee meet within 24 hours in order to attempt to expedite the process. This was straightforward, as the employee confirmed this would be enough time to prepare and that a support person had been arranged. Had the employee disagreed to this, the 48 hour notice period would have been honoured.

Step 3: Formal Meeting
In the meeting, the employee admitted to the allegations and provided an explanation. The employee’s response was emotional and actions fuelled by their personal circumstances and financial hardship.

Outcome
Despite the employee’s response and reasons for their actions, Company A’s decision was to terminate their employment without notice, due to the loss of trust and confidence in the employment relationship.

When to get the police involved in an investigation and what to watch out for:
It will completely depend on the situation as to what stage to involve the police in such serious matters, if at all. If the decision is made to report the matter to the police, the distinction must be made between the employment issue with its independent investigation and any police investigation that occurs.

Don’t muddy the waters
It’s important to ensure that any employment investigation process that is carried out is completely separate to the police investigation. Likewise, any resulting criminal conviction should only be taken into account in deciding to terminate the employment relationship should there be a clause within the agreement or a policy that exists and that the employee agreed to in relation to criminal convictions negatively impacting employment.

Criminal conviction or not, as in the above case, the employment relationship is based on trust and confidence which once has gone from the employment relationship (in a situation like this), is the main reason for dismissal.

Need a hand with an employment relations matter? We’ve got your back – call the HR experts at POD on 0800 476 347.

Employment Relations
Access to ER advice from the experts – whether it’s a poor performer in your team, a disciplinary issue that needs resolving, or you’re restructuring within the business, your HR Partner will be there to provide the level of support you need to ensure you’re undertaking a compliant and best practice process.

 

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