The days when retailers could sack employees on the spot, for reasons such as theft, have gone. Phrases such as “You’re sacked” and “Your P45 is in the post” have been replaced by “The statutory disciplinary and dismissal procedure”.

Basically, all employers have to comply with the Employment Act 2002 (“the Act”). Put simply, this means that if an employee has been employed for a year, then the employer will need to carry out a proper procedure before contemplating dismissal, even if the retailer has good reason to believe that the employee is guilty of theft. The penalties for failing to comply with the procedure are harsh, as Employment Tribunals will find that the dismissal is automatically unfair.

Furthermore, compensation will be increased by 10% to 50%.

Even if you literally catch an employee with his/her fingers in the till, it is risky to carry out an instant dismissal. In order to ensure that you are not caught out, you should carry out the following steps before dismissing:

#  Suspend the employee or relocate him/her to a role which does not involve handling money;
#  Carry out a thorough investigation;
#  Write to the employee and request his/her attendance at a disciplinary hearing to discuss the allegations;
#  Advise the employee of his/her right to be accompanied by a work colleague or a trade union representative;
#  Allow the employee to put forward his/her representations before you reach a decision;
#  Confirm your decision in writing; and
#  Offer the employee a right of appeal.

With regard to cash shortages or stock deficiencies, retailers can rely upon the provisions of the Employment Rights Act 1996 which permits retailers to deduct monies from an employee’s wage. However, in order to ensure that you are acting lawfully, you will need to carry out the following steps before making the deduction:

#  Notify the employee in writing of their total liability in respect of the cash shortage or stock deficiency;
#  Make the demand within 12 months of the date when you discovered the cash shortage or deficiency; and
#  Do not exceed one tenth of the gross wages payable to the employee on that date
#  Remember, if you think that you have caught an employee in the act, follow the correct procedure, otherwise you may find that it is you who is caught, not in the act, but by the Act.