Employer pays £13,000 to former employee who had been dismissed for theft

An employer has paid £5,000 in compensation and £8,000 court costs to a former employee after he paraded the employee through the streets with a sign around his neck declaring he was a thief.

The employee had admitted he had stolen money from his employer by writing a company cheque to himself for £845 and cashing it in. When his employer found out he forced him to wear a sign and frogmarched him to the local police station. The compensation which the employer agreed to pay to the employee was for loss of earnings and psychological distress caused by the incident.

Whilst it seems a shock to many that an employee who had stolen money was able to obtain such compensation from his employer, it is a stark reminder that an employer needs to act responsibly and reasonably in cases of misconduct by an employee no matter how serious the misconduct is. A serious breach of contract by an employee, such as theft of money from an employer, will always be a reasonable ground to dismiss. However, an employer must follow good practice and if a serious breach of contract such as theft is suspected, the correct disciplinary procedure should be along the following lines:

  • Investigate the allegation. Investigations may be fairly quick to conclude; however if they are likely to take a while then the employee should be suspended on full pay until the investigation is complete.
  • Invite the employee to a disciplinary hearing during which due consideration must be given to any representations by an employee. The employee should be informed of their right to be accompanied by a work colleague or union representative at the hearing.
  • After the disciplinary meeting has been held, make a decision as to what sanctions if any, you will place on the employee. If it is sufficiently certain they are responsible for a deliberate or serious breach of contract then dismissing the employee immediately for gross misconduct without any pay in lieu of notice will be a fair dismissal.

Employers who choose to adopt dramatic and un-orthodox actions against employees, even when they have committed serious acts of misconduct, are taking great risks and the best advice is for employers to stick to established disciplinary procedures in all circumstances, however frustrating that may be!

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