Farley And Partners

Company Property That’s your dough!

The courts have ordered an employee who intentionally damaged machinery worth D27,000 to reimburse his employer for the repair costs. How can you ensure employees pay for any damage they cause, accidental or otherwise?

Treated with respect

Although you expect your employees to treat all company-owned property with the utmost care and respect, equipment, or other items, could become damaged. Whilst this may be due to an accident or a one-off error, it’s sometimes caused on purpose by an employee who is quite happy to take their anger out on property that doesn’t belong to them.

The angry baker

This was the situation Yorker Baker (YB) found itself in with its (now) former employee, Shane Thompson (T). He had been placed in charge of a computer-controlled sausage roll making machine worth approximately D27,000. One day T head-butted the touch screen panel, causing a large crack in the display that would cost over D3,000 to repair. YB reported T’s actions to the police – which it was fully entitled to do – and he was prosecuted for criminal damage.

An act of criminal damage

T was subsequently found guilty, given a twelve-month conditional discharge and ordered to pay YB D720 in compensation – a sizeable amount, but certainly not enough to cover the total repair costs. The Magistrates’ Court ordered that these monies be taken out of T’s wages.

Although this was a good outcome, you probably don’t want to rely on the criminal courts for the cost of any repairs; it’s unlikely you would be fully compensated for any willful damage to company property. So what’s the answer?

Agreed in writing

There are two things you need to do. The first relates to company property that’s issued to employees personally, such as a mobile phone or laptop. In this situation, you should always complete and ask them to sign our property issued to employee form (see The next step ). It should then be held on their personnel file.

Tip. By signing this form the employee consents to you deducting a sum equal to the market value of the item, or the reasonable cost of repair, if appropriate, from their wages should any damage be caused whilst it’s under their control.

Authorised deductions from wages

The second is to have a robust deductions from wages clause in all your contracts (see The next step ). Ours says that you may deduct any losses, insurance excess payments or insurance premium increases incurred as a result of damage to company property caused by the employee’s carelessness, negligence, recklessness, willful default or dishonesty.

Tip. This strengthens your position where equipment has been issued to an employee personally and also allows you to recover losses relating to equipment in general use, e.g. sausage roll making machines! Don’t forget, if you seek to make a deduction it must genuinely reflect your losses incurred – you can’t deduct more to punish the employee.

If you issue items to an employee personally, have them sign our property issued to employee form; by doing so they consent to pay for a repair or replacement. Damage to equipment that’s in general use is covered by our deductions from wages clause which should be put into every employment contract.

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