“As the law currently stands, if you suspect an employee of theft, which qualifies as gross misconduct, the way you deal with it depends on your own disciplinary procedures,” says Peter Duff, head of the employment unit at the Nottingham office of law firm Shoosmiths.

If you do not currently have disciplinary procedures in place, you can download generic disciplinary procedures free from the Acas website.

As Duff goes on to explain, there is a general procedure to follow at the moment, once you suspect a member of staff of misconduct. “You should start an investigation, beginning with a disciplinary hearing with the employee, where they can put their side of the story.

They are entitled to have a colleague accompany them at the hearing. Other aspects of the investigation could include questioning other employees, checking computer records and monitoring clocking-in cards.”

While the investigation is being carried out, you can suspend the employee in question – with full pay, unless their employment contract says otherwise. Once you have completed your investigation you can then decide what further action to take.

“You do not have to prove ‘beyond all reasonable doubt’ that the employee is guilty, but you must be happy that on the balance of probabilities, they did it.

Obviously, evidence such as video footage is sufficient proof and you are then within your rights to dismiss.”

As Mike Huss, senior employment law specialist at business services firm Peninsula, points out, “you can dismiss someone for gross misconduct summarily, that is, without pay.

However, due to the working time regulations, they are entitled to at least the statutory holiday pay they are owed, and more if they are contracted to receive more.”

From 1 October, however, the rules change with the introduction of the Statutory Disputes Resolution procedure, which will standardise the way all businesses deal with disciplinary matters. Because of this, Huss strongly advises all businesses to look at their employee contracts between now and October to see how they will be affected.

“Under the new system, there will be a three-stage process that must be followed,” says Huss. “The first step is to send a letter to the employee detailing the offence, the evidence and the procedure that is to be followed. It should then invite the employee to a meeting to discuss the problem.”

Before the meeting, the employee must be given adequate time and any relevant information they need to prepare a defence for themselves.

“Once the meeting is over and you have decided on a course of action, you must advise the employee on their rights of appeal,” explains Huss. “If you do not stick to the three steps of letter, meeting and advising them of their appeal rights, any appeal to an employment tribunal will be automatically judged as unfair dismissal.

If you are found not to have followed the procedure correctly any compensation awarded to the employee can be increased by up to 50%.”

See also: Five areas of employment law small businesses must be aware of