EMPLOYESS FRAUD AND FINAL SALARY

EMPLOYESS FRAUD AND FINAL SALARY

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In my client company one employee have been submitting forged invoices ie: have purchased personal items from a supplier and when supplier sends invoices by online she alters those items such as normal office items and creates a Purchase order and get accounts to pay. ( Basically she creates and authorise PO as its a very small company as the directors had so much faith ) Now it has comes to open and directors wants to stop her December salary and she has gone on a holiday.

They are investigating and they have collected so much evidence but in the meantime december salary needs to be processed. She can be contacted via e.mail 

if needed to send a warning letter or etc. 

We wanted to stop her salary until its all investigated fully and solicitors can take charge. But in the meantime could we delay her salary ?

Has anybody faced with similar situation.

PLEASE LET ME KNOW. I WILL REALLY APPRECIATE IT

Replies (18)

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By occca
24th Dec 2013 06:47

Get legal advice

You need to seek employment law advice on this before you do anything to avoid any problems later

This is an accountancy forum, as far as I know no-one here is a specialist in employment law

You could try calling ACAS

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By Richard Willis
24th Dec 2013 08:07

Contract, contract, contract!!!

Is there a clause in the employee's contract of employment, (they DO have a contract I hope!), that says that the employer can deduct any monies owing to them from the employee's salary?  If not then technically the salary should be paid in full.  As already stated you need professional LEGAL advce on this one.

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By johngroganjga
24th Dec 2013 08:34

Agree with the above.  You

Agree with the above.  You have asked this question in the wrong place.  This is an accountancy forum but your question requires employment law advice.

When the time comes take the utmost care about how she is interviewed if you don't want to prejudice the criminal proceedings.  Your employment lawyer will advise you how and when to involve the police. 

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By High Octane
24th Dec 2013 10:33

That would be a silly thing to do.

The basis of our law is that a person is innocent until “proven guilty by a court of law”.  Whatever the employer may think he can prove, no matter how overwhelming the evidence, it would be illegal to stop the salary until guilt (or innocence) has been established by a proper court.

All the employer can do at this stage is dismiss the employee in line with the contract of employment and pay all outstanding wages, holiday pay, notice etc.  Of course, should the employee then not be convicted, the employer could, no doubt, expect a claim for wrongful dismissal.

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Replying to paulwakefield1:
By johngroganjga
24th Dec 2013 11:29

Not quite so simple

High Octane wrote:

The basis of our law is that a person is innocent until “proven guilty by a court of law”.  Whatever the employer may think he can prove, no matter how overwhelming the evidence, it would be illegal to stop the salary until guilt (or innocence) has been established by a proper court.

All the employer can do at this stage is dismiss the employee in line with the contract of employment and pay all outstanding wages, holiday pay, notice etc.  Of course, should the employee then not be convicted, the employer could, no doubt, expect a claim for wrongful dismissal.

We have civil law as well as criminal law and both come into play here.  The employer will want to preserve his right to make a civil claim for recovery of misappropriations, and a criminal conviction is not a pre-requisite for such a claim to succeed.  All of these complexities are the reasons why the employer need to consult an employment lawyer immediately. even on Christmas Eve.

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Replying to Glennzy:
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By High Octane
24th Dec 2013 15:36

Many pitfalls

johngroganjga wrote:

We have civil law as well as criminal law and both come into play here.  The employer will want to preserve his right to make a civil claim for recovery of misappropriations, and a criminal conviction is not a pre-requisite for such a claim to succeed.  All of these complexities are the reasons why the employer need to consult an employment lawyer immediately. even on Christmas Eve.

Under civil law (as opposed to criminal) you still can't effectively take the law into your own hands and hang on to salary due to the employee on the assumption that a civil court will rule in your favour. Starting civil proceedings, or financial coercion by withholding salary, whilst criminal proceedings are ongoing could also be construed as witness intimidation (defendants are witnesses in their own defence). Criminal proceedings for the purpose of witness intimidation are deemed to be "ongoing" the moment any investigation is started.  In short, the client is in serious danger of shooting themselves in the foot without expert legal guidance.
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By petersaxton
24th Dec 2013 10:43

Take immediate legal advice

but I don't agree that you have to keep paying the employee until they are convicted. You do need the legal advice to ensure that you follow the correct procedures, though.

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By neileg
24th Dec 2013 11:28

Agree you need to get proper advice

However, to deduct any amounts from an employee's pay you need their prior permission. It possible that their contract of employment covers this, probably not.

Can't emphasise how careful you need to be in these circumstances.

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By petersaxton
24th Dec 2013 11:50

Read the attached

I would look at the following link

http://www.acas.org.uk/media/pdf/s/o/Acas-Guide-on-discipline-and-grievances_at_work_(April_11)-accessible-version-may-2012.pdf

but legal advice is advisable.

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By Jim100
24th Dec 2013 11:54

Hold salary

We had a similar case where an employee was booking invoices and inserting her own bank details in the system.  She resigned from the company and gave notice but found out two weeks before her departure of the criminal act.  Unfortunately, we could not withhold her salary due to unlawful deductions act.  However, I would just hold the salary as there is nothing on an immediate basis she can do (she will have to go to Tribunal to recover). She probably will not know her rights anyway. 

Unfortunately, such situations happen in many companies due to lack of internal controls and the faith directors put in employees. The temptations is often too great and many are never found out so directors need to be more vigilant and often an experience accountant is so important in installing internal controls.

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By User deleted
24th Dec 2013 12:17

Let's hear from our legal expert, David Winch

Rather than armchair lawyers

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By johngroganjga
24th Dec 2013 12:47

Nobody's been an armchair lawyer - everyone's advised going immediately to take legal advice.  Will all due respect to David Winch, is he not also an accountant not a lawyer?

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Replying to SXGuy:
By petersaxton
24th Dec 2013 13:18

Not happy with his lot

johngroganjga wrote:

Nobody's been an armchair lawyer - everyone's advised going immediately to take legal advice.  Will all due respect to David Winch, is he not also an accountant not a lawyer?

I don't think the comment you are referring to was made because of David Winch's legal experience. It was made out of frustration that most people on here are their own boss and not an employee.

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By User deleted
24th Dec 2013 14:46

My comment was misunderstood

It was directed not at those who (quite correctly) suggested the OP take proper legal advice but at those who appeared to be offering that legal advice without any apparent qualification to do so.

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Replying to lionofludesch:
By johngroganjga
24th Dec 2013 15:07

Point taken

BKD wrote:

It was directed not at those who (quite correctly) suggested the OP take proper legal advice but at those who appeared to be offering that legal advice without any apparent qualification to do so.

Point taken - but a bit odd then that you refer the armchair lawyers to another accountant.

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Replying to kevinringer:
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By User deleted
24th Dec 2013 15:52

Another accountant, maybe

johngroganjga wrote:

BKD wrote:

It was directed not at those who (quite correctly) suggested the OP take proper legal advice but at those who appeared to be offering that legal advice without any apparent qualification to do so.

Point taken - but a bit odd then that you refer the armchair lawyers to another accountant.

But one that has demonstrated here and elsewhere that he has considerably more legal knowledge and expertise than most on this site. Put another way, he is the one accountant upon whose advice on legal matters I would rely. I wasn't referring anyone to David, just suggesting that his views would be welcome - by this particular contributor at least.

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David Winch
By David Winch
24th Dec 2013 15:52

In common with others I would urge the employer to take legal advice before taking any other action.

Added to that, the employer needs to be very careful not to disturb / contaminate / destroy any relevant evidence (and if course do NOT go searching through the hard drive of the employee's PC - leave it switched off!) and I would urge the employer NOT to interview the suspected employee without first obtaining legal advice (particularly if a complaint to the police is contemplated).

The OP of course needs to consider making a Suspicious Activity Report to his firm's money laundering reporting officer / NCA.

David

(P.S. I am an accountant - not a lawyer.)

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John Stokdyk, AccountingWEB head of insight
By John Stokdyk
24th Dec 2013 16:32

Time out!

It's getting het up again - remember, it's the season of goodwill, not sniping at each other about professional qualifications. The David Winch diversion hasn't added anything to the sum of human knowledge - just more work for the moderation team.

To prevent any further outbreaks, we're freezing this thread.

Have a happy, peaceful Christmas all!

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