Dishonesty in the Workplace

Dishonesty in the workplace can arise in many different situations. It can be a very obvious and instant occurrence or it can be more long-term involving a less obvious series of events. Every business is a potential target, whether it is from an employee fiddling their expenses, or a customer slipping goods into their bag. As the dishonest person’s confidence grows their level of activity will similarly grow until they are leading a full-blown operation that will destroy productivity and morale within your business. Therefore, dishonest behaviour, of any nature, should not be ignored.

A part-time Accounts Assistant who stole £200,000 from her employers to pay for a lavish wedding has been jailed for 20 months. In this situation the Managing Director wasn’t aware anything was wrong until the day of the wedding when the lavishness of the event set alarm bells ringing.

What to do if a theft occurs

When faced with a case of theft, never jump to conclusions about who may or may not be guilty. Depending on the circumstances and the seriousness of the theft, you may need to report the incident to the police. If you notify the police you must continue to deal with the employee according to your own internal disciplinary procedure, regardless of what action the police choose to take.

How to deal with an allegation of dishonesty

So, a concerned member of staff reports to you their suspicions that another member of staff has committed an act of dishonesty. What do you do?

Your initial reaction may be one of shock and anger that you are harbouring, let alone paying, a dishonest employee. However, a knee jerk reaction to dismiss the employee in question prior to carrying out a full investigation and a fair disciplinary hearing will find you facing a claim for unfair dismissal.

Instead, you should thank your informant for bringing the matter to your attention and advise them that you will conduct an enquiry. Don’t jump to any conclusions. The information may be inaccurate, wrongly interpreted or malicious!

Get your investigation underway immediately – before the rumour mill goes into overdrive or the vital evidence is lost.

It may be necessary to suspend the employee while the investigation takes place. This is a serious step and should be considered very carefully as even if the employee is later exonerated, the suspension will have been obvious to other employees and there may be a feeling of ‘no smoke without fire’.

If you consider suspension you must explain to the employee your reasons for taking that step, how long the suspension is likely to last and that they will remain on full pay throughout.

When you have collected all the evidence together do not rush into a decision. Decide whether you believe the allegations and be clear of your reasons for deciding either way. If the allegations don’t stand up, inform the employee that their name has been cleared and if they were suspended agree a date for them to return to work. If the allegations appear well founded you are dealing with a disciplinary matter and should notify the employee that you are invoking the company’s formal disciplinary procedure.

Rebuilding trust

Where trust has been broken through high profile executive wrongdoing the senior management team must quickly regain credibility amongst the workforce. This can be achieved if you are seen to be handling the issue with fairness and objectivity and through an extensive communication effort:-

  • Avoid spin
  • Pass on all the news, even the bad
  • Communicate verbally
  • Offer the opportunity for dialogue
  • Listen
  • Don’t disappear
  • Remind your staff what the business needs to achieve to be successful and how they contribute to that success
  • Ask people to move on and begin to focus on the future again

Preventative measures

Effective internal controls can drastically reduce the risk of dishonesty within your business.

  • Define and set up a policy for the handling of all goods in and out of the business.
  • Set up a clear procedure for dealing with any damaged or out of date products.
  • Ensure that you have adequate security measures in place for handling payments via the internet or over the telephone.
  • Decide on appropriate purchase or payment authorisation levels and ensure that single transactions above that amount require a second signatory.
  • Ensure that signatories never sign a cheque that does not have relevant supporting documents.
  • Separate key duties – having the same person in charge of more than one procedure, for instance placing orders and preparing invoices would allow the individual to prepare fictitious invoices for dummy orders and pocket the cash. Wherever possible separate or rotate these duties amongst several employees.
  • Ensure that all staff take their holidays – dishonest staff will be worried that their deceit will be found out if they are absent.


A sound and well understood disciplinary policy is essential. Dishonest staff must be aware of the consequences that will follow if they are caught stealing.

The essential measure in protecting your business from staff theft comes not in setting rules but at the pre-employment stage.  I continually stress the importance of following up on references yet surprisingly find employers displaying a naïve willingness to take CVs at face value.

See BBC News to read the full story.

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Dishonesty in the Workplace


Kathryn is a highly experienced HR Manager with a wealth of skills and knowledge acquired across a variety of industries including manufacturing, health and social care and financial services. She has worked in small localised business and larger multi sited organisations and is comfortable liaising with senior managers and union officials as well as answering queries from team members. Connect with Kathryn on:

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