Theft and Workplace Honesty

Posted in : HR Updates ROI on 13 February 2014
Caroline Reidy
The HR Suite
Issues covered:

The current economic climate has given rise to a major increase in workplace theft. This fact was highlighted in a 2012 Retail Ireland report on black market trading, counterfeit goods, shoplifting and theft. This report found that theft costs retailers €861 million each year, €110 million of which is a result of shoplifting and theft. There are many areas of threat for an organisation to consider namely financial loss, reputational damage, and the internal impact of theft on the organisation.

This article covers:

  • Types of theft and fraud
  • Is your organisation at risk?
  • Prevention
  • Whistleblowing

Types of Theft/Fraud

Theft can be in many forms, such as theft directly from the cash register or theft of stock. In past cases, employees have gone to great lengths to avoid detection and have managed to steal large sums of money from their employers before they are apprehended. These actions include but are not limited to:

  • Conducting fraudulent refunds and keeping the cash themselves
  • Non-documentation of sales whereby the money paid never makes it into the till
  • Credit card misuse, including stealing customers details
  • Not scanning goods when serving friends/ family members
  • Taking stock directly from the shelves.

Other indirect examples of theft include abuse of the sick leave policy, misuse of company property (e.g. company vehicles or company phone), time wasting when at work (e.g. surfing the web or taking personal calls) and misuse of the clock-in system.

Is Your Organisation at Risk?

There are a number of clear indicators which can help pinpoint whether your company is at risk. Weak internal controls may provide an opportunity for staff to commit theft or fraud. A prime example of this is where only one staff member deals with accounts and invoicing. In these situations it would be best practice to implement dual controls within the workplace e.g. have a senior staff member sign-off on all transactions and invoices. Absence of clear policies and procedures can result in a lack of standards within the organisational culture. If there is no clear policy in place staff will not be well informed of what constitutes appropriate behaviour. Poor security measures such as a lack of CCTV, passwords and biometrics provide more opportunities for employees to commit theft as they may be more confident that the theft won’t be discovered.


Risk of theft and dishonesty can be minimised by taking all reasonable preventative and monitoring measures.

1. Policies:

It is important that specific and clear company policies are formulated. These policies must be followed consistently by management and the organisation. The main policy that should be implemented is the Honesty Policy. This policy should be issued to and signed-off by every employee. The Honesty Policy should be applied in conjunction with the company Disciplinary and Grievance Policy whereby any employee who is suspected of breaching the Honesty Policy will be subject to a full investigation.

The Honesty Policy is designed to protect the majority of people who want to work in an environment in which honesty is encouraged and respected and in which the employee, the employer and customers are protected from any dishonest acts by other employees, customers, suppliers or the general public. The Honesty Policy should clearly identify the expectations of employees in terms of honesty and provide a detailed description of what they should do if they feel that the policy has been breached. It is important that the policy is explicit in stating that an employee can report any wrongdoing privately or anonymously if they wish without fear of recrimination or victimisation.

2. Independent Contact Point:

Many organisations now engage an external, independent company to act as a contact point for employees to report any issues under the Honesty Policy. If you choose to do this in your organisation is it important that you inform your employees of the process involved and how to make contact with the designated liaison. This information should be included in the Honesty Policy and staff notices should be displayed. The HR Suite now offer this service to a number of organisations throughout Ireland. We have found that by offering an external liaison employees are more comfortable with the idea of reporting dishonest behaviour.

3. Culture and Staff Awareness:

An open and transparent organisational culture should be established through effective management and implementing organisational policies and procedures to foster this culture. These policies should be reissued to employees on a regular basis and displayed in open areas such as staff noticeboards and locker areas. Many will remember the scandal involving Enron, the US energy company bankrupted in 2001. Enron had a model whistleblowing policy but the culture created within the organisation led to a lack of disclosure of company problems by its employees. Regular awareness of theft, fraud and dishonesty from all levels is vital to embedding an honest, open culture.


The Protected Disclosures Bill 2013 introduced by the Minister for Public Expenditure and Reform, Brendan Howlin, is aimed at protecting whistle-blowers who speak out against wrong doing, corruption or dishonest behaviour by an employer or work colleague. Under the legislation, employees could be awarded up to five years' remuneration if they are found to have been unfairly dismissed for whistleblowing. It will also be possible for employees dismissed for this reason to bring an unfair dismissal case without completing one year's service with the company - a precondition for similar cases. The Bill is the first of its kind to apply to all sectors and industries, both in the public and private sphere.

It is best practice for organisations to establish an effective whistleblowing policy. Employers who operate a policy are less likely to be taken to an employment tribunal and an effective policy also allows for the creation of an open and accountable workplace and acts as a positive indicator to customers and investors that good practice exists within the organisation.

A suggested framework for a whistleblowing policy is as follows:

1. The organisation takes malpractice seriously - distinguish whistle-blowing concerns from grievances.
2. The policy should provide examples of the type of concerns to be raised by workers. For example if:

  • A person is failing to comply with a legal obligation
  • A criminal offence is being committed
  • The environment is being damaged
  • A person’s health and safety is being endangered
  • Information relating to a protected disclosure is being concealed.

3. Workers have the option to raise concerns outside of line management.
4. Workers are enabled to access confidential advice from an independent body.
5. The organisation will, when requested, respect the identity and confidentiality of the whistle-blower.
6. When, and how, concerns may properly be raised outside the organisation.
7. It shall be a disciplinary matter to victimise a whistle-blower who acts in “good faith” but also for someone to maliciously make a false allegation.
8. Employees are made aware of the whistle-blowing policy in operation from when their employment begins and periodically thereafter.

The profile of whistleblowing should be promoted and communicated and furthermore those who whistle-blow on staff theft/fraud should be protected.


It is understandable that implementing a fully standardised approach to staff theft and honesty would not be feasible. However, HR involvement has become increasingly fundamental in establishing and implementing the best practice policies and procedures outlined above. All organisations should promote strict internal control and an anti-theft culture in addition to staff awareness of policies in a bid to limit the risk for staff dishonesty and theft. Organisations should be aware that having a policy in place is more than an exercise in ticking boxes – it is essential for protecting the organisation from corruption and bad publicity. It is crucial that management take a lead in promoting an approachable and responsible culture.

This article is correct at 07/10/2015

The information in this article is provided as part of Legal-Island's Employment Law Hub. We regret we are not able to respond to requests for specific legal or HR queries and recommend that professional advice is obtained before relying on information supplied anywhere within this article.

Caroline Reidy
The HR Suite

The main content of this article was provided by Caroline Reidy. Contact telephone number is +353 66 710 2887 / +353 86 775 2064 or email

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