Fraud in the Workplace

The incidence of fraud at work has increased in recent times in Ireland. This may be due to increased economic pressures, or greater vigilance on the part of the employer. It can be an employers nightmare when you discover fraud in your business. What steps can I take? What constitutes proper evidence? These are just some of the questions that can arise when you suspect that fraud is taking place. For that reason and others, many employers avoid even thinking about fraud in the workplace.

This article looks at ten steps that you can take to reduce the opportunity for fraud in your business and guidance on procedures for dealing with fraud, when you discover it.

1. A good written contract

This applies to business partners, company directors as well as every employee. If the current employment contracts do not cover this, then you need to upgrade them immediately. Take a look at employees who have been with the company for a long time. Have they been promoted with increased responsibilities? Does their contract adequately reflect this?

2. Choose good employees

This requires attention to detail when hiring. Take particular care when the potential employee will be handling cash, dealing with orders or dealing with your accounts. Does the person seem happy with the remuneration and work load ?

3. Establish a clear policy and broadcast it to all parties.

What are the rules and what happens when they are broken? Take every opportunity to communicate them to your employees. Make sure they understand your zero tolerance policy.

Is there a DIY solution to drafting a contract of employment ?

Yes. We advise you to get help from our experts. However if you want to do it yourself you can download our updated employment contract document, together with our simple guide to completing it . You can opt to have the completed document reviewed by one of our experts for peace of mind. Just click on the blue button to view our selection of employment law documents to help reduce your legal expenses.

See article on gross misconduct here

Let them know that you will carry out random checks. Make sure this is covered in your policy.

4. Observe and control

Build in procedures for keeping an eye on important transactions. Try where possible to have more than one employee dealing with financial transactions, inventory management, delivery, working hours, payroll,telephone use etc.

5. Set up good accounting procedures.

Use numbered sequences for important documents, such as invoices, purchase orders etc. Get confirmation of receipt of order. This is necessary if you later need to sue for non payment.It also helps prevent false delivery claims leading to fraudulent payment.

6. Take stock

Whether your business deals in goods or services you must know at all times that state of your stock. Goods can be stolen, but so can time. Hard working staff will usually have no problem with regular systems for keeping control of the business. It will show you how hard they are working.

7. Consider installing security systems.

This may involve video surveillance. If so, ensure that you have written procedures in place which respect the employees data protection rights>>.

Make sure that everyone is aware that video surveillance is taking place. Use posters, signs or other methods to inform.

8. Limit access to sensitive areas.

Only give keys or codes to trusted employees. Don't leave keys where anyone can use them. Who can make duplicate keys? What happens when an employee leaves?

9. Data control

Keep up to date on the latest methods for controling access to data.

Consider using computers with no ability for external access, e.g. no usb drive, no ability to write to disk. This makes it harder for employees to copy sensitive business data. Some disgruntled employees may be tempted to download customer details for use by them after they have ceased in your employment. You should discuss this area with a suitably qualified, experienced IT expert.

10. Hold the phone

Carry out random checks on the phone bill. Are there signs of excessive long distance calls?

Have and implement a policy on the use of the phone for personal calls. We recommend limiting this to emergency use only.

The main thread running through all of this is be observant at all times, set up good procedures and follow them.

If you would like help with implementing any of these suggestions, please contact us using the orange Tell Me More button below.  

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