Investigating Fraud in the workplace
If you suspect an employee of fraudulent activity it is important that you conduct a thorough workplace investigation before deciding what, if any, disciplinary action is appropriate. In doing so it is important that you do not overlook your obligations under employment law.
One of your first considerations will be whether it is appropriate for the employee to remain in the workplace pending the outcome of the investigation. Where you have sufficient evidence of wrongdoing you may wish to exercise your right to suspend the employee.
In deciding whether or not to suspend it may be helpful to give consideration to the following:
- If the employee remains in the workplace is the fraud likely to continue, if there is a risk that key evidence may be altered or destroyed, is it possible to carry out the investigation competently without tipping the employee off and is the employee still fit and proper to carry out their duties under the contract of employment in light of the nature of the allegations?
- If the employee is suspended will the suspension itself tip the employee off, will the suspension make the employee more difficult to monitor and if a freezing order is appropriate will suspending the employee increase the risk of assets disappearing before such an order is obtained?
If you decide that suspension is the most appropriate course of action this should generally be on full pay (unless the contract of employment expressly provides otherwise) and for no longer than is necessary. You should also ensure that you make the employee aware that it is not in itself a disciplinary action.
During the Investigation
During the investigation it may necessary for you to review emails and computer records accessed by the employee at work. Whilst this type of monitoring may be justified in certain circumstances you must ensure that you have sufficient evidence of fraudulent activity before acting.
It is advisable to have written data protection and monitoring policies in place which provide for you to access an employee’s emails and computer records where criminal activity is suspected. You should ensure compliance with the relevant policies throughout the investigation.
Any action that you do decide to take should go no further than is necessary and should be proportionate to the seriousness of the matter under investigation. In particular you should only access information which is necessary for the fraud investigation and should take all steps necessary to avoid accessing irrelevant information such as personal information about the employee.
Once you have established the facts you will need to consider what, if any, disciplinary action is appropriate. Fraudulent activity is generally considered a gross misconduct offence for which you have the right to dismiss the employee without notice or payment in lieu of notice. However, even if you have concrete evidence of fraud this does not remove your obligation to conduct a fair disciplinary procedure. Failure to do so may result in a claim in the employment tribunal for unfair dismissal.
You should ensure that you have a written disciplinary policy in place which makes provisions for a fair disciplinary hearing and a right of appeal. This policy should be complied with as closely as possible. Employees should also be advised of their right to bring a companion (either a trade union representative or a colleague) to any formal hearing.