Misplaced Company Laptop: Can My Friend Face Legal Trouble for Not Repaying?

Dear Sirs, One of my friends is working in an engineering development-based company. They provide laptops for official use. In December 2012, a laptop was misplaced due to the carelessness of my friend. The management lodged a claim with the insurance company, but the claim was rejected due to the negligence of the employee. As a result, the management is forcing my friend to repay the depreciated value of the laptop. In my opinion, the management is correct in this instance. Please provide your opinion, sirs. If my friend does not repay the amount, will any legal action be taken against them? Thank you.

Yes, the decision of management is correct. If your friend does not repay the amount, the organization may take disciplinary action as outlined in the company policy. Normally, such matters are covered in the company's code of conduct or policy manual. Your friend should review the situation objectively and make a decision that is a win-win for both parties.

First, ask your friend if the organization provided an employee handbook upon joining. If so, check whether it prescribes such a code of conduct. If it does, then your friend will have to pay the depreciated laptop value.

With regards,

Laptop Policy and Declaration Drafting

Are you a part of the HR Team? Please draft a laptop policy and a declaration to be signed when an employee is issued a laptop. It's not just a machine but holds important information for the company; hence, it needs to be taken very seriously. You might find many such declarations in this community to refer to; however, identify what is crucial to your firm and design one. Trust that helps!

I agree with the previous comments. In addition to Cite Contribution's suggestion, until the policy is in place, the depreciated value should be recovered from the employee, and a warning letter should be issued for their carelessness. An organization cannot be expected to foot the bill for an employee's carelessness. Moreover, once a precedent is created, every such case will come in.

Warm regards.

Well, I also agree with the decision of management and other members. You must have a policy in this regard if you still have not defined any terms and conditions yet. One thing I would say is that if there is no policy defined for issuing and using any asset/laptop to any employee and other required conditions, it doesn't mean employee negligence can be accepted. Basically, I want to say the employee is directly responsible for this careless act, which can't be tolerated at any cost, and has to repay the appropriate value of the laptop. This will serve as an example of how to treat these kinds of cases for all your employees, and they will take these matters seriously.

“An organization cannot be expected to foot the bill for an employee's carelessness.” - Raj Kumar

Thank you for all your comments, seniors. I am not working in the HR team; I am working in an Insurance Broking Company. My friend asked me about a missing laptop and whether it is possible to take any action with the ombudsman or pursue any legal recourse.

Referral for Legal Advice

Is it possible to refer my friend regarding this problem?

Thanks & Regards,
Vinoth Kumar

Addressing Company Asset Management Issues

The problem has arisen because it appears that you do not have a proper policy on the allotment of company assets to the employees. You could have checked this forum for past replies to similar queries. Anyway, please check my past replies:

- https://www.citehr.com/375356-ex-emp...ml#post1725508
- https://www.citehr.com/412483-employ...ml#post1874458
- https://www.citehr.com/452041-compan...ml#post2029477

Thanks,

Dinesh V Divekar

Your friend is lucky. The company has charged him the depreciated value of the asset. In most companies I know, they would have him pay the replacement value. He was careless, and no company will accept that. It's better that he accepts the matter and pays it.

Please request your friend to thank his stars; he's been incredibly lucky. Ideally, a firm needs to lodge a police complaint as that missing laptop is a company property with valuable information. Your friend hadn't signed any laptop agreement, which gives him protection from being dragged into a legal hassle. Paying up is the easiest way out.

[Stolen laptop recovered - The Hindu](http://www.thehindu.com/news/cities/chennai/antitheft-software-traces-lost-laptop/article4320440.ece)

Dear Saswatabanerjee & (Cite Contribution), actually, I also mentioned to my friend that you are lucky because the laptop purchased in February 2010 had a value of ₹1,25,000 as per the invoice. However, the company is repaying only ₹65,000 due to good conduct.

Thanks for all your comments.

Regards,
S. Vinoth Kumar

I am referring to your post regarding instructing an employee to replace a lost laptop. When an employee loses a laptop, there are two types of losses: one is the company's fixed asset, and the other is the information contained in the asset that is also lost. However, asking the employee to replace the laptop would mean recovering a higher value than what is recorded in the company's books of account, which is unethical.

Conducting a Domestic Inquiry

In such a situation, the company can conduct a domestic inquiry and impose two punishments. Firstly, the recovery can be based on the depreciated value of the laptop, and secondly, there can be a penalty for the loss of data.

Promoting Transparency with a Loan Card

The best approach is to ensure that the employee or manager properly fills out a designed loan card when allocating the company's assets. The loan card should include the date of purchase of the asset and the value of the asset to promote transparency.

Regards,
Dinesh V Divekar

Greetings to all, I agree with Mr. Dinesh that replacing the laptop wouldn't be ethical. Also, the cost of it in terms of money and as per the present value after applicable depreciation of an asset won't be more than ₹75,000/-. Therefore, I would say that it is really good for your friend that the management has decided to recover the value of the lost laptop with ₹65,000/-.

As per the general procedure that we adopt in this kind of case, we charge the amount based on the booked value of the laptop after allowing depreciation of 15% per annum (15x3) and 5% (5x3) for maintenance. If it is less than ₹75,000 (60% of the actual value at the buying price of an asset), it can be treated as an appropriate and applicable value.

Regarding the suggestion for a loan card, it is also good, but I have some doubts and would like to ask a few questions to you all.

- Can this suggestion be included under the “IT and Asset” policy?

- Loan card for allowing company assets, would it be an effective step or the solution to prevent and deal with this kind of case?

After all the valuable responses with respect to the knowledge and experience of members, one more thing I would like to add is that your friend is lucky because the company has not lodged any police complaint/FIR in this regard. They have just decided to charge the amount of ₹65,000/- because the data and information they have lost with this laptop can be used in many ways, which wouldn't be acceptable and is another big concern.

Regards.

From the company's point of view, what is important is not the depreciated value but the fact that they have to buy a new laptop which was not needed or budgeted for. That they will get a better one than what was bought a year back is also incidental. It's a loss for the company to have spent even that much.

Most companies I know do their insurance on replacement cost for the same reason. So no, it's not unethical for the company to charge the employee higher than the book value. It would make the employee more careful, hopefully.

Most large and organized companies already keep asset trackers and get signatures on registers for laptops allotted. Or they have mail confirmation. Larger companies have a requisition system to be made by the employee approved by the concerned manager.

Thanks for your response, Saswata Banerjee. I respect and understand your point of view. However, if you recall, there is still no information shared by S. Vinoth Kumar (the thread owner) regarding management asking for a new laptop to recover this loss but also asking for repayment. Therefore, I request S. Vinoth Kumar to clarify this for us.

Questions to Consider

Now, before proceeding further, I would like to ask a few questions:

- Who defines the terms and conditions or is responsible for the formation of policies?
- Who is directly responsible for the allotment of any asset to any employee?
- Who recommends this need/requirement of using laptops, and to whom?
- Who regulates this procedure, fulfills this requirement, and is responsible for maintaining a record of allotment?
- Who is responsible for all the work mentioned above—in short, which DEPARTMENT?

Scenario Analysis

Lastly, suppose you were allotted a laptop by your employer three years ago, which now needs to be repaired soon. What would you do? Would you ask the company/department/employer to repair it, or would you bear the expenses yourself?

If a laptop is lost mistakenly, the respective management can inquire about this mistake and lodge a "Missing/Lost Asset" complaint with the police, which is necessary for security reasons (to prevent wrongful usage as per cyber and other social security laws). However, they can't claim that the employee did it consciously without any proof or firm evidence. If it was a mistake, the employer has no right to ask the employee to return a new laptop in replacement, which is a common and understandable stance. I don't think any employer would do this.

If any employer (available in this community) has ever asked for a new laptop or any asset in replacement of a lost/misplaced asset by any employee and has a policy with such terms and conditions, I would be obliged to know more about it. I am eager to hear from all employers (members) available here, please.

Returning a new laptop against an old one wouldn't be a professional, ethical, or practical decision. Let's consider your point, dear, if management decides to recover a laptop in replacement of a lost one. Do you have any idea how much a new laptop with the same configuration would cost today, and would it be acceptable to the management?

One more thing I would like to add: your point is valid that management always seeks benefits, and I hope now you have a clear idea of what is more beneficial to management.

Let's not stretch it further and accept that, in practical terms, management won't opt for a new laptop but for repayment. MR. VINOTH, WE ALL WOULD LIKE TO HAVE DEVELOPMENTS IN THIS REGARD, PLEASE INFORM US.

Regarding the procedure of companies in the allotment of any asset and maintaining records, this is now a common practice even with very small firms and is acceptable.

The original poster has stated that the company asked for the depreciated value. The employee is complaining that it is unfair. My point is that it is not unfair. In fact, the company could have asked for a replacement. The insurance company refused to pass the claim as it was due to carelessness on the part of the employee. The insurance company's denial of the claim is a good indicator of the employee's liability for the loss. Without detailed information, I can't say more.

I have seen many employers who, as a rule, ask for a replacement. It has to be of similar or better configuration. It's stated in their employee handbook. For reasons of confidentiality, I can't give names in an open forum. It includes one of the largest travel companies in the world, four large MNC IT companies, and two of the big four accounting firms.

As per the previous email, the depreciation value should be recovered from the employee. If this action is not taken, there will be a lack of care for the company's assets.

Regards,
RAGHU

I agree with many valuable points mentioned above by our HR fraternity. I agree with one of the points that beforehand a company should have:

1. A clear HR policy on company assets issued to employees.
2. To outline the purpose and usage of company assets, including any limitations.
3. Procedures for handling loss, theft, or damage of company property (considering all scenarios when creating the policy).
4. Since laptops are crucial sources of business information today, employees should declare their commitment to protecting company information at all costs.
5. Protocols for recovery in case of item 4.

From my experience, I would like to share that in one company, following their policy, management assessed the difference between the insurance claim and the laptop's book value in cases of genuine loss. They then collected the corresponding amount from the employee. However, this practice applies to unique cases only and is not a general rule. You may consider approaching it this way.

Regards,
B. Dakshina Murty
Sr. Manager - HR

I beg to differ with you on your view:

"Laptop Misplacement and Employer Responsibility"

"Laptop has been lost mistakenly, and the respective management can inquire about this mistake and lodge a 'Missing/Lost Asset' complaint with the police, which is required/necessary for security reasons (to prevent wrongful usage as per cyber and other social security laws). However, they can't claim that the employee has done it consciously without any proof or firm evidence. If it is done by mistake, the employer has no right to ask the employee to return a new laptop in replacement, which is a common and understandable situation. I don't think any employer has done this."

If employers (HR or Finance department) start taking responsibility, then the burden shifts to the employer, and it becomes their responsibility to get the asset replaced. Although the procedure of insuring assets is the employer's onus, the employee is equally responsible for the safety of the assets handed over to them.

For example, if a company provides the latest mobile phones to its employees and one employee loses it, and the company starts lodging a police complaint, the lost mobile phone is invariably not retrieved, as we have seen in many cases. If we admit that the first case is genuine and set the employee free, then there could be several cases of lost mobile phones. Trust you will appreciate my viewpoint, as not all employees are genuine.

So, in the interest of the organization, it is important that the company takes stringent measures to check the loss of assets due to the carelessness of the employee.

Regards,
M.V. Kannan

Company-Issued Laptops and Data Backup

A laptop issued by the company to an employee for official use contains information pertaining to the organization. I know that in one company, it is specified that the IT department will take regular backups from the employees' laptops; this ensures that the database is not lost.

Regards.

Well, if the company handed over the laptop to you, then you are solely responsible for it. In case it is damaged and the insurance company is not willing to pay, then you will have to cover the cost of the laptop. You can also approach your HR department to discuss any financial issues or specific concerns you may have.

I appreciate and respect the views of others, including yours, Mr. Kannan. As we have discussed this case at length and the thread owner has received many responses and suggestions, I believe we should wait for updates about this case from them. This way, the thread can progress in the right direction; otherwise, it may need to be closed.