Proving Employee Theft in Singapore: 3 Simple Steps for Business Owners
If you suspect your employee has stolen from you, don’t lash out at them or make decisions in a panic. Before you accuse your employee of doing anything, make sure you read this guide to ensure you know the proper steps to proving employee theft.
Step 1: Initiate an internal inquiry
There is no legally mandated procedure for an inquiry. In general, you should do the following:
- Calmly inform the employee of their alleged theft/misconduct
- Allow the employee to present their arguments
- The person overseeing the inquiry should not have clear reasons to be suspected of bias against the accused employee.
Businesses can suspend an employee from work during an inquiry. This is legally permissible under Singapore’s Employment Act. There are 3 important conditions to such suspensions:
- You cannot suspend your employee for more than 1 week without permission from the Commissioner of Labour.
- You must pay your employee at least 50% of their salary during their suspension.
- If you wish to extend the suspension period beyond 1 week, you must seek permission from the Commissioner of Labour.
Step 2: Gather evidence
What fraudulent acts have you suspected your employee of committing? Is it stealing cash from the register? Is it billing fake expenses to company accounts? Identify the specific source(s) of fraud/theft and then set about gathering evidence to see if the employee really did commit those acts.
Here are some helpful tips to gathering evidence to prove employee theft:
- Review CCTV footage: If you suspect your employee has stolen cash (e.g. from a cash register) or inventory, review your CCTV footage to see if you can find evidence of your employee pocketing the money or goods.
- Audit your accounts thoroughly: Engage a professional auditor to thoroughly check through your books, to see if accounts have been falsified or maliciously inflated.
- Review expense bills: If the employee has submitted expenses to be billed to the company, check through the receipts that they filed claims for. Call the businesses up to verify the purchases. Were they actual purchases or fake bills/receipts?
- Review invoices: If the employee has submitted purchase orders, check through the invoices to see if they were legitimate purchases. They could be goods sold to a fake company, or payments made to fake entities.
Step 3: Conclude results from inquiry
After the inquiry, you must arrive at a conclusion as to whether or not the employee indeed stole from your business.
Misconduct found: If your inquiry finds that misconduct was indeed committed, businesses have several options:
- Immediately downgrade the employee.
- Immediately suspend the employee from work without pay, for a maximum of one week.
- Fire the employee without notice, with no salary in lieu of notice to be paid.
No misconduct found: If your inquiry finds that no misconduct was committed (or you cannot prove this), then you must restore the full amount of the salary that was withheld during the suspension period. For instance, if you only paid your employee the minimum 50% of salary during the 1-week suspension, you must return them the remaining 50%.
How to protect your business from employee theft?
We wrote a guide on how business owners can prevent employee theft (or at least minimise the risk). Although you can take many precautions against employee theft, fraud or theft that’s committed by your own workers is an ever-present risk that’s never going to go away. This is a harsh reality that remains true no matter how many precautions you take.
That’s why it’s important to insure yourself against the financial losses you may suffer in the event of employees stealing from you. At Provide, we offer fidelity guarantee insurance, which protects you from employee theft. Fidelity guarantee insurance pays for any cash stolen by your staff, or fraud committed by employees. Save up to 25% on your premiums when you use Provide for business insurance.