Ways to Prevent the Rise of employee theft in the Workplace 

Rising living costs have created problems for employers and employees alike, and one less obvious effect has been an increase in workplace theft. Figures obtained by the insurer Zurich through Freedom of Information requests to police forces, published in February 2023, showed a 19% rise in the number of employees in England and Wales recorded as stealing from their employer, from about 5,000 in 2021 to almost 6,000 in 2022.

What kinds of theft happen at work?

Workplace theft ranges from taking stock, cash or equipment to more serious wrongdoing such as stealing data or intellectual property and embezzling company funds. Small, repeated thefts can go unnoticed for a long time, but the losses add up, particularly when businesses are already under pressure to control costs.

The impact is not only financial. Suspicion, lengthy investigations and a sense that some people are getting away with it can damage trust and morale across a team.

Reducing the pressure on staff

Prevention starts with understanding why problems may arise. Some employers have made one-off cost of living payments or offered other financial support, which can ease pressure on staff and help with retention, particularly in sectors with high turnover. Our article on how employers can help staff with the cost of living sets out practical options.

Review your policies and controls

Now is a good time to check whether your business is vulnerable and whether your policies are clear. In particular:

• Make sure your disciplinary policy states that theft and dishonesty are gross misconduct that may lead to dismissal without notice.
• Explain that all incidents will be investigated and that serious thefts may be reported to the police.
• Review stock control, cash handling and access to systems and data, so that losses are easier to spot.
• Check whether your contracts allow searches of bags or lockers, and whether they permit deductions from pay to recover losses. Deductions from wages are only lawful if they are authorised by the contract or the employee has agreed in writing beforehand.
• If you use CCTV or monitor emails or systems, make sure it is proportionate, that staff are told about it, and that it complies with data protection law and guidance from the Information Commissioner’s Office.

Handling a suspected theft fairly

If you suspect an employee of theft, act promptly but fairly. Carry out a reasonable investigation before reaching any conclusion, and consider carefully whether suspension is really needed. Our guide to suspension during workplace investigations explains the current Acas guidance, and our article on how HR investigations should be conducted covers the investigation itself.

To dismiss fairly for theft, an employer does not have to prove the theft beyond reasonable doubt. It must genuinely believe the employee is guilty, have reasonable grounds for that belief, and have carried out as much investigation as was reasonable in the circumstances.

Dismissal must also fall within the range of reasonable responses. You do not usually need to wait for the outcome of any police investigation or criminal case before taking disciplinary action, although you should take advice if charges are pending.

Be consistent. If other employees have been treated more leniently for similar conduct, a dismissal may be found unfair. Follow the Acas Code of Practice on Disciplinary and Grievance Procedures, give the employee the chance to respond and be accompanied, and offer an appeal. Our article on common mistakes in disciplinary proceedings highlights the pitfalls, and you can read more about fair reasons for dismissal.

This matters more than ever, because from 1 January 2027 the qualifying period for most unfair dismissal claims falls from two years to six months, and the cap on compensation is removed.

How we can help

Our employment law advice for employers covers reviewing your policies, contracts and monitoring arrangements, and supporting you through investigations and disciplinary action.

If you suspect theft in your business or want to review your procedures, book a free 30-minute consultation or call us on 0141 471 9166.