One of the more common themes currently coming through the MGA Advice Team involves employees taking or consuming products without following the store’s required purchasing process. 

In many cases, the immediate reaction from managers is to describe the conduct as “theft” or “stealing”. However, a recent decision of the Fair Work Commission highlights why employers should proceed carefully before reaching that conclusion. 

The distinction between: 

• an employee deliberately stealing from the business; and  

• an employee breaching a workplace purchasing procedure,  

can significantly impact whether a dismissal is ultimately considered fair. 

Importantly, the first step in managing these matters is ensuring the business actually has a clear, communicated and consistently enforced policy regarding staff purchases, consumption of stock and payment expectations. 

The Current Trend in Retail Enquiries 

Across the independent retail sector, we are seeing an increase in matters involving: 

• staff consuming drinks, confectionery or food items during shifts;  

• employees placing products aside for later payment;  

• staff processing their own purchases;  

• products being removed from the store before payment is finalised; and  

• inconsistent application of “staff discount” or damaged stock practices.  

In many workplaces, long-standing informal practices can develop over time. Employees may believe conduct is acceptable because: 

• “everyone does it”;  

• managers have previously allowed it;  

• payment has historically occurred later in the shift; or  

• there has never been a clear direction otherwise.  

This can create substantial difficulty for employers attempting to later establish that the conduct amounted to intentional dishonesty or theft. 

Case Study: Theft Allegation vs Breach of Workplace Policy 

A recent Fair Work Commission matter involved an employee with more than 14 years’ service who was summarily dismissed after allegations she had stolen confectionery items from a workplace pharmacy. 

The employer relied heavily on CCTV footage showing the employee consuming stock during shifts without immediately paying for the items. 

The employee admitted consuming some products but argued that staff commonly consumed snacks during shifts and paid for them later, often at the end of the day. 

What the Commission Considered 

The Commission drew an important distinction between: 

• consuming or removing stock before payment, which may breach workplace policy or procedure; and  

• theft, which requires evidence of an intention not to pay.  

While the CCTV footage established the employee had consumed stock before payment, the Commission found this alone did not prove dishonest intent. 

In one example, evidence showed the employee had in fact paid for the product later that same day. In other instances, the Commission accepted explanations that payment was intended to occur later or through another employee. 

The Commission also considered several contextual factors: 

• there was no evidence the employee attempted to conceal the conduct;  

• the employee had no prior disciplinary history in more than 14 years of service; and  

• similar conduct by other employees had been tolerated or inconsistently managed.  

Outcome 

The Commission ultimately found the employer had not established theft on the balance of probabilities. 

As a result, there was no valid basis for summary dismissal for serious misconduct. The dismissal was found to be harsh, unjust and unreasonable, with the employee awarded compensation equivalent to 22 weeks’ pay. 

Why This Distinction Matters 

For serious misconduct allegations such as theft, the evidentiary threshold is significantly higher than simply proving a policy breach occurred. 

To establish theft or dishonesty, employers generally need evidence supporting: 

• intentional misconduct;  

• an intention not to pay; or  

• an intention to permanently deprive the business of property.  

Simply proving that: 

• an employee consumed stock before paying;  

• forgot to process payment immediately; or  

• failed to follow store procedure,  

may not be enough on its own to establish theft. 

This becomes particularly difficult where: 

• workplace practices have historically been informal;  

• policies are unclear or outdated;  

• managers have previously allowed exceptions; or  

• enforcement has been inconsistent across employees.  

The Importance of Clear Policies 

One of the strongest preventative controls businesses can implement is a clear and well-communicated staff purchasing policy. 

At a minimum, policies should clearly address: 

• whether staff can consume products during shifts;  

• when payment must occur;  

• whether products can ever leave the store before payment;  

• whether employees can process their own purchases;  

• use of staff discounts;  

• handling of damaged or reduced stock; and  

• consequences for failing to follow the process.  

Just as importantly, businesses should ensure: 

• employees receive the policy during onboarding;  

• refresher training occurs periodically;  

• managers enforce the process consistently; and  

• exceptions or informal practices are avoided.  

Where policies are poorly communicated or inconsistently enforced, it becomes much harder to later argue an employee knowingly engaged in dishonest conduct. 

Procedural Fairness Still Matters 

Even where evidence appears strong, employers should still ensure procedural fairness is followed before determining an outcome. 

This generally includes: 

• conducting a proper investigation;  

• preserving CCTV and transaction evidence;  

• providing employees with clear allegations;  

• allowing employees to review and respond to evidence;  

• considering explanations and mitigating factors; and  

• assessing whether the conduct reflects dishonesty, poor judgement, or simply a failure to follow procedure.  

In some circumstances, the more appropriate outcome may involve: 

• retraining;  

• policy clarification;  

• formal warning; or  

• performance management,  

rather than immediate termination for serious misconduct. 

Key Takeaways for Employers 

This decision serves as a timely reminder that: 

• a breach of procedure does not automatically amount to theft;  

• proving dishonesty requires evidence of intent;  

• workplace custom and inconsistent enforcement can undermine misconduct findings;  

• clear staff purchase policies are essential; and  

• disciplinary outcomes should align with both the evidence and the seriousness of the conduct.  

For employers, the strongest protection is not simply relying on CCTV after an issue occurs — it is ensuring expectations are clearly documented, consistently enforced and regularly reinforced before problems arise.