To Tell or Not to Tell

What happens when an employee knows that a colleague is ripping their employer off or otherwise deliberately damaging the Company they both work for?

The employee in the know has a bit of a moral dilemma. Does he tell the employer or not? If he does, then he may be seen as a ‘grass’ and his life may become uncomfortable particularly if there is a “them and us” culture within the company. If he doesn’t tell, will he be in trouble if the employer finds out he knew and did nothing?

The answer, as ever in these situations, depends on a number of factors.

As I have mentioned before, there is an unwritten clause in every contract of employment that states that both the employer and employee shall behave properly towards each other. This is called the implied term of trust and confidence. What effect does this clause have?

The more senior the employee, the greater the requirement to tell the employer if he becomes aware of another’s bad behaviour. A supervisor, manager or above who does not tell the employer is likely to face disciplinary action.

However, unsurprisingly, it isn’t always that straightforward, so let’s look at a difficult example. Sue is a worker on a production line in a factory that makes small electrical products. She knows that Gwyn, another production line worker, is stealing two or three electrical products a week. Gwyn slips them into his overalls, then transfers them into his locker so that he can take them home when the coast is clear. Sue does not tell her supervisor about Gwyn’s behaviour. The company becomes aware that it is losing products and, after conducting a risk assessment, puts a secret camera above the production line. This films Gwyn’s theft but also establishes that Sue knows what is going on, as she can be seen on the tape watching Gwyn.

After the disciplinary procedure is followed, Gwyn is dismissed for gross misconduct. Whilst he might have thought that the company would barely notice the loss of a couple of products now and then, an employer will almost always be able to sack an employee for stealing.

The company also feel very aggrieved about Sue’s failure to tell anyone and, after putting her through a disciplinary procedure, they sack her as well. Although the company accepts that she was not involved – there is no suggestion of her being Gwyn’s accomplice – they feel that she should have told her supervisor and, because she didn’t, they cannot trust her anymore. This seems like a fair reaction, but would a Tribunal agree?

Sue brings a claim of unfair dismissal. She didn’t feel threatened or intimidated by Gwyn, she just felt that it was not her job to tell the bosses what he was doing. The Tribunal agree and say that she was unfairly dismissed.

The company’s argument that she should have told them what was going is just not good enough. There was no written clause in Sue’s contract requiring her to report misconduct and the trust and confidence clause would not impose such an obligation on a junior employee. The upshot for the company is that they have to pay Sue compensation.

The lesson for employers: if you expect employees to inform on colleagues make it a written part of their contracts of employment.

However, sometimes employees have a genuine fear of retribution. Employers should understand this and make it easy for employees who want to inform them of damaging behaviour to do so on a confidential/anonymous basis.

The lesson for employees: your employer pays your salary and so any theft from the Company may end up coming out of your pocket, so it will usually be best to tell your employer what’s going on.

Published 27/09/2006.