Join our

mailing list.

Keep up to date with our latest insights.

  • This field is for validation purposes and should be left unchanged.
Friday Workplace Briefing

How to Manage a Theft Allegation In Your Workplace – Understanding the Standard of Proof and Process

In this week’s Friday Workplace Briefing, Andrew and Kim discuss the standard of proof and process in managing a theft allegation in your workplace.

To view the full episode and catch up with the week’s latest news and developments please visit this link.

Stay updated with our Friday Workplace Briefing

Subscribe to receive the latest Friday Workplace Briefing in your inbox every Friday, where you can hear the critical news and developments that affect your workplace.

Listen to podcast

About the Hosts

Managing Principal - Victoria

Principal Lawyer - Head of Workplace Relations

Episode Transcript

Andrew Douglas: All right, look, can I just tell you the background? There’s three things I want to concentrate on. One, stop using names like theft and fraud, okay.

Kim McLagan: Okay.

Andrew Douglas: It’s just dishonesty.

Kim McLagan: Yeah.

Andrew Douglas: Okay, theft and fraud actually do have real tests. So as in the case we’re going to talk about, it wasn’t theft. Could never have said to be theft, even on the facts laid out. When we’re dealing with financial dishonesty, you’ve got to understand that the first rule is the method of investigation must be one that can withstand criminal investigation, okay? So that means proper witness statements.

Kim McLagan: Yeah.

Andrew Douglas: Proper evidence collected in appropriate way, okay.

Kim McLagan: Yeah.

Andrew Douglas: So I just want to be very clear. The investigation process is one which must be forensically well done. And the evidence collection must be able to produce evidence, which if it’s drawn upon in a criminal court, is admissible as a matter of law. It’s not easy and you need help.

The second thing is one swallow doesn’t mean a summer. In other words, a person makes a mistake. Now they may have done it dishonestly, they may not, but that’s a state of mind. So if someone’s spent or grabbed $5 worth of something and not paid for it, just don’t overreact.

Kim McLagan: Mm.

Andrew Douglas: And you know, the case we’re about to talk about is the overreaction.

Kim McLagan: Yeah.

Andrew Douglas: And the last part about it is make sure that your systems aren’t the problems. So when we’re talking about theft, or we’re talking about fraud, or talking about financial dishonesty, the one thing you must learn in the investigation process is, what are the flaws in your system that permit it? ‘Cause you and I have both dealt with financial theft on a large scale by bookkeepers.

Kim McLagan: Yeah.

Andrew Douglas: You know, $4 million, $2 million, which have gradually been taken out of a business. So like all bad things, good things come and when the good thing that comes is you get a chance to dig deep on dual signatures, system analysis of where was the problem that arose. So they’re the only things I really want to concentrate on today. The case tells us something else, which I think is really helpful. But you, do you want me to talk about the case or you?

Kim McLagan: I’ll just talk about the facts quickly. So we’ve just got a duty manager at a club, like an RSL type club, who had a drink and didn’t pay for it and thought that they had.

Andrew Douglas: Yeah.

Kim McLagan: But they were terminated as a result. Brought an unfair dismissal claim. The-

Andrew Douglas: Commissioner thought she was credible.

Kim McLagan: Yeah.

Andrew Douglas: Yeah, thought she was credible, reliable, made sense. And then what, go move on.

Kim McLagan: Well, but applied the wrong standard of proof.

Andrew Douglas: Yeah, yeah, and it isn’t it odd that even at a quasi-judicial level-

Kim McLagan: Yeah.

Andrew Douglas: That’s been very generous, isn’t it? That you don’t know the law. So what happened at the Commission is that they said, “Well, the test is beyond reasonable doubt.”

Kim McLagan: Yeah.

Andrew Douglas: You said theft, so it’s criminal duty. Well, I think all of us know it’s Briginshaw, which means if you’re going to allege something which has dishonesty, and the more serious the nature of the offence, the clearer you’ve got to be with the evidence that you rely upon. But is still on the balance of probabilities more likely than not. So it was then appealed and they said, “Well, that’s actually not the burden, but anyway, I think you’re right. She didn’t steal it. And you should be very careful about using the word theft.”

Kim McLagan: Yeah.

Andrew Douglas: So Briginshaw is a case, when you’re doing any investigation for any serious allegation, whether it’s sexual harassment, whether it’s theft, whatever you say it is, you must think carefully. Go online, read about Briginshaw.

If you’re not sure, give Kim a ring. It’s not as simple as saying, “Yeah, when I think about it, it’s more likely than not.” You’ve got to be looking at the quality of the evidence that you are relying upon. Now what happens if it’s a “she said, he said” Briginshaw. Okay, don’t be put off by credibility arguments because-

Kim McLagan: Yeah.

Andrew Douglas: There’ll be other real evidence that sits around what the people say. Like the person who said they didn’t do it, said they weren’t there at that time. And you’ll have records that show and CCTV that shows the person either was or wasn’t there.

So the idea of evidence is, using Shrek’s theory of an onion, is to go out in layers. I think it was Donkey’s theory actually, not Shrek, but anyway, you can see I’ve still got a 7-year-old can’t you? But when you investigate, you start off with real evidence and direct evidence, first layer.

Then you look at the circumstantial evidence. What are the things that sit around that that test the truth of the real and direct evidence? You start moving out, and Kim’s great at this, in her investigations. And from that you go out and you’ll look at indirect testimony that sits around and you look at history of behaviours that occur as well. So actually there’s no such thing as a “she said, he said.”

Kim McLagan: No.

Andrew Douglas: Because there is always extrinsic evidence, which gives you the capacity to test the truth of what people are saying.

Kim McLagan: Yeah.

Andrew Douglas: So it’s not simplistic and if you have an investigator, so it’s, “She said, he said, I can’t substantiate,” you can give him a clip around the ear from me, okay.

Kim McLagan: But it just shows you the importance of a proper investigation. ‘Cause all of these cases we talk about, the employer falls over when they haven’t done a proper investigation.

Andrew Douglas: No, it’s the theme for today.

Kim McLagan: Yeah.

Andrew Douglas: You know, in some ways, it certainly wasn’t a deliberate theme. But as we’ve gone through the cases, we had three cases today, all of which, had an investigation been done appropriately, would’ve stopped the decision made that was made.

Kim McLagan: Yeah.

Andrew Douglas: An investigation doesn’t have to be with lawyers, okay. It doesn’t have to be with specialised investigators. You can do them yourself. But can you follow the structure, you know, that Kim and I gave you, I think about six months ago, with a tick list of things that you must do.

Go to your policies and procedures first, okay. Good, we’ve got those. Create a tick list of things that I must do in the process of doing my investigation. Then look at the allegations. Create an allegations letter that says when, where, what, exactly. Make the person agree that that is it.

Kim McLagan: Yeah.

Andrew Douglas: Okay, then take that out and test that allegations letter. Don’t make witness statements unless you absolutely have to because people finesse witness statements. I’ll send it to Kim and she goes, “Yeah, I know that’s what I said, but that doesn’t look good for me.”

Kim McLagan: Yeah.

Andrew Douglas: Take written notes. You’re allowed to use those and rely upon, but make them contemporaneous. Do them at the time of doing it.

Kim McLagan: Yeah.

Andrew Douglas: Confirm with an email back to the person what they said. Okay, more contemporaneous evidence.

Kim McLagan: Yeah.

Andrew Douglas: Doing a good investigation is not hard, but knowing the standard of proof and the rules around evidence collection and weighing evidence is absolutely critical, okay.

Kim McLagan: Okay.

Andrew Douglas: Good, well, why don’t we go onto the case study.

Kim McLagan: I like this one.

Andrew Douglas: It’s a beaut, like this case study? I’ve sent it off to Nellie actually, by the way, if you’re watching Nellie, this is my daughter. I changed the name to protect the innocent.

Kim McLagan: Okay, Bell had travelled the world. When she arrived back in Australia, she found it parochial and sleepy. Her recent time in London had taught her how open and committed to safety the UK and Europe were. She returned to her father’s law firm, WCF.

Andrew Douglas: Yeah, back to front, see that, yeah. CW, you like that? Yeah, it was good, wasn’t it?

Kim McLagan: He was in the process of selling his firm when she arrived back. On 30 June 23, he worked his last day and the new owner took over the reigns on 1 July.

It didn’t take long for the new owner to show his true colours. He was prone to being bombastic, vague in his directions and petulant when no one read his mind and met his expectations. None of this was directed at Bell, but she saw it happen. She also heard his comments that were dismissive of women’s primary care obligations for young children. Such as, “I know life is hard, but we still have to hit our targets.” And dropped back to 1970s vernacular calling women “Love” and was frequently heard talking to other men in mock whispers around the way women dress, such as, “Doesn’t Ivy look stunning today?” and commenting upon body shape and appearance. Never directed at any specific woman, but it was common to hear his conversations with Gill and other male lawyers in the kitchen around looks and appearance followed by cackling laughter.

Bell had had enough. She asked to speak to the new owner Gus in private. When they were alone, and the door shut, Bell said she had observed his and another man’s behaviour to women, it was unacceptable and had to stop. She went on to say he seemed to lack self-awareness around his management style and it was causing stress to other employees. He struggled with the feedback. He said, “Thanks,” and he would think about it.

Two weeks later, he asked Bell to come to his office. Gill was present. He said that she had repeatedly attended late, which was true. Bell arrived every day at 10:00 AM but always hit her billable targets and often worked until after 8:00 PM. And this was the first she knew that he was unhappy with her time of attendance. Seemed disinterested in adjusting to the new culture and rules, and she was no longer a cultural fit.

Okay, so that’s what he said to her.

Andrew Douglas: Yep.

Kim McLagan: Bell smiled. She said, “Gus, you are a weak p****.”

I knew you’d make me swear.

Andrew Douglas: I knew you’d say it.

Kim McLagan: “I tell you that you are hurting people and now you have cobbled together rubbish to get rid of me.” Gus exploded, “How dare you call me a weak p****. Get out, you are now summarily dismissed for being rude and abusive.”

I love it.

Andrew Douglas: I love it. Okay.

Did Gus breach any legal obligations in this case study?

Kim McLagan: I’d say quite a few.

Andrew Douglas: Yeah. Can I just say this is a hostile workplace argument?

Kim McLagan: Yeah.

Andrew Douglas: So there’s two things. There’s psychological hazards.

Kim McLagan: Yeah.

Andrew Douglas: Which is clearly the failure to articulate what he wants. The unreasonable expectations around work.

Kim McLagan: Yeah.

Andrew Douglas: Pure psychological hazards. Also psychological hazards in the manner in which he treats and describes women. So there is behaviour which is sexually inappropriate and discriminatory in a generalist level. But that is what a hostile workplace is.

Kim McLagan: Yeah.

Andrew Douglas: And you have a positive duty to stop it.

Kim McLagan: Yeah.

Andrew Douglas: And therefore he is also in breach of safety law obligations.

Kim McLagan: Yeah.

Andrew Douglas: Okay.

Kim McLagan: Yeah.

Andrew Douglas: It’s not bad is it?

Kim McLagan: It’s a good one.

Andrew Douglas: It’s a good one, yeah. Did Bell’s words to Gus justify sacking?

Kim McLagan: I dunno.

Andrew Douglas: No.

Kim McLagan: No?

Andrew Douglas: The answer is, so displays of anger, brief displays of anger-

Kim McLagan: Right.

Andrew Douglas: Which are not designed to hurt, but are just expressive of frustration-

Kim McLagan: Okay.

Andrew Douglas: Will never be a basis for summary termination, okay.

Kim McLagan: Good.

Andrew Douglas: Which is like with you and I. We do it to each other every now and again. We don’t sack each other.

Does Bell have a good general protections claim? Any other possible claim on safety law? She has a ripper general protections claim.

Kim McLagan: Yeah.

Andrew Douglas: And she’d win.

Kim McLagan: Yeah.

Andrew Douglas: I don’t think she has a lot of damage, but so, but general damages are starting to go up in general protections claim. So she’s probably got a 20 to 30,000 general protections sort of claim and the loss of work going forward, the power to reinstate. But given the nature of who he is, there’d never be a reinstatement. So yeah, between 30 and 50 grand. It’s a good claim. They’d want to settle.

Kim McLagan: Mm.

Andrew Douglas: Because it would be brand destroying not to settle it.

Kim McLagan: Yes.

Andrew Douglas: As has shown in the case we dealt with earlier, how destructive that can be. And yes, there’s a safety claim ’cause she raised safety concerns and discrimination. So he’s up for penalties.

Kim McLagan: Yeah.

Andrew Douglas: -as well, of up to 50,000 a person, 250 for a business. So interesting isn’t it? Safety law, not being used in the last two or three years like this. Plaintiff lawyers have just started to learn how to do it. There was a Patrick’s case four years ago, but we are now starting to see it happen and the safety regulator themself is starting to focus on it, particularly given their penchant for intervening where there has been sexual harassment. So you may have a safety regulator knocking on your door.

Could Gus, Gill and WCF face safety prosecutions? Yeah, they could.

Kim McLagan: Yeah.

Andrew Douglas: Yeah. Are they likely to do it just at this moment? In Victoria, I think there’s a reasonably good chance. Most other jurisdictions, no. Although both New South Wales and Queensland are getting there. So I think in a year’s time we would see this type of thing quite possibly prosecuted.

Particularly where are strong Labour government directions around the treatment of women and where Work Safe or whatever their name is, has been given a direction about it, we may see higher levels of intervention.

Kim McLagan: Yep. Okay.

Andrew Douglas: Okay.

Kim McLagan: Good.

Andrew Douglas: Look, that’s it for this week. It’s great doing with you again.

Kim McLagan: Yeah, well thank you.

Andrew Douglas: Did you notice the words I put in for you?

Kim McLagan: Yeah I did.

Andrew Douglas: I got you, didn’t I?

Kim McLagan: You always do.

Andrew Douglas: I sucked you into it, I sucked you into it.

Kim McLagan: You do your best, don’t you?

Andrew Douglas: Great to chat, lovely to see you all. And we’ll see you next week.

Kim McLagan: See you.

Andrew Douglas: Cheers, bye-bye.

Kim McLagan: Bye.