SUSPICION WITHOUT PROOF – What to do when you suspect dishonesty?

What do you do when you have reason to suspect employees of dishonest activities but have no direct proof? First and foremost, be patient! If you suspect an employee or a group of employees of dishonesty, do not rush into things!

Realise that suspicions alone will not hold up in a court of law or in an arbitration! Be sure of your facts and make sure you have sufficient evidence to prove your case before you accuse anyone. If you act too soon, all you will do is alert the suspect and give him an opportunity to cover his tracks or come up with some plausible story to allay your suspicions.

As Sun Tzu, the ancient Chinese strategist said: “First win and then seek battle”.

If more patience had been exercised, evidence of the manager’s dishonesty could have been obtained. For example, a security camera above the till would have revealed exactly what was going on. This would have enabled the NGO to summarily dismiss the employee, lay criminal charges and possibly recover monies from the culprit.

Another concern is that if the manager had any accomplices, they are still employed by the NGO and sooner or later, they will go back to their old ways! Where there are stock losses, one should always assume the worst and try to collect enough evidence against all the culprits before showing your hand.

Private investigator

Where it is suspected that major theft or fraud is taking place, it is adviseable to employ the services of a private investigator. Whilst some unions might object to the use of private investigation services, an employer is fully entitled to protect its business.

Be careful however, to select a reputable investigator who goes about his investigations in an ethical manner and who is careful to comply with the rules of evidence gathering.

The investigator may conduct surveillance on suspects and might well make use of video evidence and telephone recordings. These can be very powerful evidence. Ensure that your policy on electronic communication has been communicated to employees and is complied with during evidence gathering.

Circumstantial evidence

Whilst the criteria for determining criminal cases is beyond reasonable doubt, this is not so for disciplinary enquiries where the criterion is the balance of probability. This means that the presiding officer has to hear the explanations of both parties and decide which version is the more probable. It also means that greater cognisance can be taken of circumstantial evidence, which is evidence from which inferences can be drawn. Circumstances could be such that a number of factors point to an employee being guilty of a transgression.

For example, a consultant was asked by a transport company to chair a hearing into the dumping and theft of quantity of a commodity transported by the company. The employer had received a tip off that a load of the commodity had been dumped on the side of the road and was being shoveled into a pick-up truck.

The police responded quickly to the employer’s call and arrested three non-employees. The employer’s investigator who accompanied the police took measurements of the wheel tracks of a large vehicle on the pavement and in the dumped commodity. He then started investigations into which tanker trucks were operating in the vicinity of the dumped commodity. This involved examining the logs of the vehicles which had been operating in the vicinity of the dumped commodity. Three vehicles had been in the area but one particular vehicle had made a stop about 20 minutes just before the dumping was reported.

All three crews were asked to do polygraph tests but only the driver and assistant of the truck which had stopped, failed the test. Measurement of this vehicle’s tyres corresponded with the tracks in the commodity on the side of the road. The investigator established from the manufacturer of the commodity that there had been a discrepancy in the weights of commodity delivered by this vehicle.

This was explained by the fact that the commodity, a sticky substance, stuck to the side of the tanker. The driver’s assistant was supposed to bang the sides of the tanker to dislodge any commodity stuck there but obviously had not – hence the weight discrepancy. The weight discrepancy also corresponded with the volume of the commodity dumped.

The driver and his assistant were questioned and, of course, denied any knowledge of dumped product on the side of the road! Nobody at any stage had seen the vehicle stop or the driver and/or his assistant dumping product.

Grounds for dismissal? The consultant came to the conclusion that there were substantive reasons and dismissed both persons. Interestingly in preparing her finding, she turned things around. “If I were to believe the employee, this is what I would believe” – making it so improbable that anyone would believe the employee. Both dismissals went unchallenged.

Fraud where there is no evidence of personal gain

In another case, the sales director of a manufacturing company received a tip-off that certain company products were being sold at below cost prices by a particular customer.

Upon investigation, he found that the local sales manager, who had been tasked with clearing reject and old stock, had been selling standard stock items at hugely discounted prices to the customer in question.

He was charged with fraud and gross negligence (an additional charge could have been failure to follow procedures) for selling stock without authority at hugely discounted prices to the particular customer. (During the hearing no evidence was led, or indeed available to the employer) to show that the manager had enjoyed any personal gain from the transactions.

However, one does not have to show personal gain to prove fraud. As there was evidence that the manager had price lists and clear instructions on discounts, it was clear that he had knowingly sold the stock items at the wrong price. This constitutes fraud and he was found guilty of both charges and dismissed. Significantly, after the sales manager left, several customers came forward to report that the he had approached them with offers of discounted product, provided that they were prepared to give him a ‘personal incentive’!

Derivative misconduct.

In MOSSAWU obo Khoza and Mr Price (arbitration outcome) an employee was dismissed for not disclosing his knowledge that another employee was stealing. The arbitrator found that, if an employee has knowledge of theft taking place and fails to inform the employer, the employee breaches the trust relationship. The employee is also in breach of his common law duty to act in good faith and in the employer’s best interests. The employee’s silence was deemed to be ‘derivative misconduct’ and his dismissal was substantively fair.

The Lesson

The lesson to be learned from these cases is that the employer has rights. Do not confuse the evidential requirements of a criminal case with that of a disciplinary case. If you have good reason to believe an employee is being dishonest, you do not have to put up with it. Take advice, there is always a way to legally get rid of a bad egg!

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