Employee Caught Stealing: What Actions Can a Company Legally Take Under Labor Law?

Dear All, I would like to inquire about the rights of a company to take action against an employee who has been caught red-handed during a theft, in accordance with industrial and labor law. Thank you.

Dear Qasim Raza, For misconduct of a grave nature like theft, it is important to conduct a domestic enquiry. Before ordering the enquiry, obtain statements from those who caught the employee while committing the theft. Focus of the Enquiry The focus of the enquiry should be on what happened and not on who did it. Give the accused a chance to defend their case. However, if blameworthiness is established, take suitable action, which could include termination of employment. Keep records of the investigation proceedings as well as the enquiry.

Thanks,

Regards, Dinesh Divekar

Dear Dinesh, Thank you for your response. If the company did not file an FIR at the police station, did not conduct an immediate inquiry on the spot, and terminated the accused employee without any investigation or issuing a show cause notice, this case has not been reported to the HR in the Head Office. The factory management has decided to resolve it personally. After three days, factory management informed HR of the complete scenario and requested that HR look into the case and sort out the matter. Please advise on how HR can take legal action against the employee.

Thank you,

Regards, Qasim Raza

Dear Qasim Raza,

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

Anyway, now the services of the employee have 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, 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 inquiry. Send a notice to the accused to depose before the inquiry. Let the Enquiry Officer (EO) ascertain whether the company has suffered any losses. If in the inquiry, it emerges that the company has suffered losses, then on the strength of the inquiry 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 the police or write off the lost items is a call for the management of your company.

Thanks,

Dinesh Divekar

From the Indian law perspective, in such a situation, HR should gather all evidence supporting the misconduct, keep it ready to present before any judicial authority, and request an opportunity to prove the misconduct on merit before the legal authority where the termination may be challenged. Begin by securing the stolen property, confirming it as company property, and obtaining written statements from all witnesses.

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

Hello, an employer cannot terminate an employee without sufficient cause or reason after receiving the complaint letter written against the concerned employee. Issue a show-cause notice to the individual and conduct a thorough investigation. If the accused is found guilty, you may issue a warning letter or begin the process for immediate termination. However, if immediate termination is pursued, it is necessary to settle the severance pay or notice pay. Remember, one month's salary must be paid to employees who have worked for a year or more. In cases of mass termination in protected sectors, three months' wages must be offered to employees. The Payment of Gratuity Act mandates gratuity payment for employees after five years of continuous service.

If a worker admits to theft in writing and requests to adjust the loss from his receivable dues, but fails to participate in the internal inquiry and does not return to the employer, instead filing a dues claim to the labor commissioner based on false facts, what is the appropriate course of action?

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.

Steps to Take if an Employee is Caught Stealing

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.