Dear All, I would like to ask if an employee was caught red-handed during a theft. What are the rights of the company to take the action against the employee as per the industrial and labor law?
Thanking you

From Pakistan, Lahore
Dinesh Divekar

Dear Qasim Raza,

For a misconduct of the grave nature like theft, it is important to conduct domestic enquiry. However, before ordering the enquiry, obtain statements from those who caught the employee while committing the theft.

The focus of the enquiry should be on what happened and not who did it.

Give a chance to the accused to defend his case. However, if the blameworthiness is established, then take a suitable action which could be termination of employment.

Keep records of the proceedings of the investigation as well as enquiry.


Dinesh Divekar

From India, Bangalore
Dear Dinesh,
Thanks for your response. If the company did not file FIR at the police station and did not take the enquiry on the spot and the accused employee has been terminated without any investigation or without any show cause notice. This case has not been reported to HR in Head Office and factory management has decided to resolve it personally, after three days factory management informed HR of the complete scenario and requested please look into the case and sort out the matter. Please advise how HR can take legal action against the employee.
Thanking you
Qasim Raza

From Pakistan, Lahore
Dinesh Divekar

Dear Qasim Raza,

When the employee was caught flagrante delicto for theft, there is no ground for on-spot termination. The factory head should have handed over the matter to HR. The HR department should have ordered the domestic enquiry and if the employee was found guilty, a suitable punishment could have been awarded to him. Why a short shrift was given to principles of natural justice is not understood.

Anyway, now the services of the employee has been terminated. The termination of employment itself is the highest punishment. What further punishment would you like to give to him?

The employee's attempt to commit theft has been foiled. Therefore, I don't think that he is in possession of the company's property. If he is not in possession of the company's property, even then also, you can lodge a complaint against him. However, it could lead to unending rounds to the police station and further to the court. If the court case drags, it could prove cumbersome to the company.

Even now you can order the enquiry. Send a notice to the accused to depose before the enquiry. Let the Enquiry Officer (EO) ascertain whether the company has suffered any losses. If in the enquiry it emerges that the company has suffered losses, then on the strength of the enquiry report, ask the employee to pay the damage charges or return the property. If the employee does not oblige, then whether to pursue the case with police or write off the lost items is a call of the management of your company.


Dinesh Divekar

From India, Bangalore

Speaking from the Indian law perspective, in such a situation, the HR should garner all evidence in support of the misconduct, keep them ready to adduce them before any judicial authority as well as plead for being granted an opportunity to prove the misconduct on merit before the legal authority before whom the termination may be challenged. Start with securing the theft property, get it identified as company property, and take written statements of all the witnesses.
From India, Mumbai
John Chiang

Dear Qasim Raza,

In our country, a staff or worker's employment may be terminated without either advance notice or pay in lieu of such notice and without separation pay in case of the following action:

Theft of Company Money or Property

Theft of company money or property is prohibited. Theft includes stealing, or attempting to steal, company money or property, whether wrongfully taking it or by fraud or embezzlement. This includes, but is not limited to, the submission of fraudulent claims for reimbursement under the Company's Insurance and Retirement Program and under the Company's Travel Expense Voucher procedures, or false records of time worked.

If an employee steals or attempts to steal the Company's money or property, where the evidence so warrants, the company will bring the matter to the attention of appropriate law enforcement authorities.

The above is for your reference.

Best regards to CiteHR Members,
John Chiang

From China, Shanghai

An employer cannot terminate an employee without sufficient cause or reason. after receiving the complaint letter in written against the concerned employee. Issue show cause notice to the concerned and investigate properly if he found accused then you can issue him/her warning letter or process for termination at immediate. But if you will terminate at immediate you will have to Settle the severance pay/Notice pay. Remember 1 months salary must be paid to employees who have worked for a year or more. For mass termination in protected sectors, three months of wages must be offered to employees. The Payment of Gratuity Act entitles employees to gratuity payment after five years of continuous service.

Again if worker admits to theft in writing and requests to adjust the loss due to theft from his receivable dues, but fails to participate in internal inquiry and does not comeback to employer, rather files a dues claim to labour commissioner on basis of false facts....what is the stand
From India, Noida
Pocket HRMS

If an employee is caught red-handed during a theft, the company has the right to take disciplinary action against the employee, up to and including termination of employment.

The company must, however, follow the principles of natural justice, which means that the employee must be given an opportunity to be heard and to present their case. This can be done by conducting a disciplinary hearing, at which the employee will be given the opportunity to explain their actions and to present any evidence they have in their defense.

The company must also gather evidence to support the allegation of theft. This evidence could include eyewitness testimony, CCTV footage, or security camera footage. The company must also be able to show that the employee had the opportunity to steal the property and that they had a motive to do so.

If the company is able to establish that the employee stole company property, they can terminate the employee's employment. The employee may also be liable for civil damages, such as the cost of replacing the stolen property.

Here are the specific steps that an employer should take if an employee is caught red-handed during a theft:

1. Secure the stolen property. The employer should take steps to ensure that the stolen property is not lost or damaged. This may involve taking the property into the employer's possession or having it secured by a security guard.

2. Identify the witnesses. The employer should identify any witnesses who saw the employee stealing the property. The employer should take the names and contact information of these witnesses.

3. Take statements from the witnesses. The employer should take written statements from the witnesses who saw the employee stealing the property.

These statements should be detailed and should include the following information:

The date and time of the theft
The location of the theft
What the employee did
What the employee said
What the witnesses saw

4. Suspend the employee. The employer should suspend the employee pending the outcome of the investigation. This will prevent the employee from having any further contact with the stolen property and will also prevent the employee from intimidating any witnesses.

5. Conduct an investigation. The employer should conduct a thorough investigation into the theft. This investigation should include interviewing the witnesses, reviewing CCTV footage or security camera footage, and gathering any other relevant evidence.

6. Meet with the employee. The employer should meet with the employee to discuss the investigation and to give the employee an opportunity to explain their actions. The employer should also inform the employee of the potential consequences of their actions, including termination of employment.

7. Make a decision. Based on the evidence gathered during the investigation, the employer will need to make a decision about whether to terminate the employee's employment. If the employer decides to terminate the employee's employment, they should give the employee a written notice of termination.

From India, Dombivali
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