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Employee serious misconduct: What to do?

The process behind dealing with an employee accused of inappropriate conduct, fraud or theft.

Employee Serious Misconduct: What To Do?

Are you unsure of the process to dismiss an employee? Do you have an employee who you believe has engaged in inappropriate conduct, fraud or theft? If you are faced with these scenarios it is difficult to know exactly how to deal with the situation.

In this article, I focus on removing an employee for inappropriate conduct, fraud or theft. A different procedure should be followed if you need to dismiss an employee for poor performance.

The allegation

Dismissing an employee in these circumstances is serious. It is a process that you shouldn’t try to do alone. Often, the conduct that gives rise to the termination may be criminal and you should treat it in a serious way.

You also need to be very sure that you are right. Document every step as you go through the process so that you can show when and why you took certain steps.

Immediate steps

You need to determine how serious the allegation is. If you believe criminal conduct has occurred, then you need to immediately contact the police or appropriate authority. Often, you will be unsure whether you should do this; don’t try and make the decision yourself.

Get advice to make sure you are making the right decision. You should immediately stand down the employee, tell them that there has been an allegation made against them and that they are not to come back until you tell them otherwise.


Next, you need to investigate the complaint or allegation that has been made against the employee. Again, for serious allegations, the police will usually do that for you. If you are unsure then you need to investigate what is alleged to have occurred. You can also engage the services of your lawyer or other consultants to do an impartial investigation.

If you believe that you can conduct the investigation yourself then you need to interview the people involved, the complainant, any witnesses and put together any evidence.

For example, if the allegation involves fraud or theft then you need to see what evidence supports the allegation. If, during the investigation, it becomes apparent that criminal conduct has occurred, then you need to immediately refer the matter to the police or appropriate authority.

Putting the allegation to the employee

After the investigation, again depending on the nature of the allegation, you need to put the allegation and evidence to the employee. You need to give them the opportunity to respond and have a support person present during that meeting.

You need to carefully document their response and consider it to see if the evidence supports their version of events. You should not do this alone. If you are unsure, get advice as it can be difficult for you to see all the angles when going through this process.


After you have done your investigation and you have advice that the alleged conduct has occurred then you can dismiss the employee immediately. You should do this in writing. If you are unsure, get advice and help through this termination process.

Depending on the way that the employee has been engaged (i.e. through a contract or award) you may have to pay out their entitlements, although often pay in lieu of notice can be avoided in these circumstances.

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