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Defining theft by employee

Editorial Staff

While it is always dangerous to base any legal analysis on general media reports, media are reporting a case which provides sufficient fact for a discussion of the principles involved. The case involves a member of staff at a branch of Tesco in Ireland who removed product from the premises and was dismissed but has been awarded substantial damages for unfair dismissal.

The facts as presented are simple: a member of the security staff and one of his colleagues each removed toys from the shelves of Tesco and put them into the office that they shared. They both said that they did this so that they could pay for the toys later. Alan McNally, took one home. His colleague, known only as MK, saw that there was only one of the toys and reported the circumstances to the personnel department. McNally, apparently unaware of the situation, returned the toy to the shop the next time he was on duty. He was interviewed and dismissed for a breach of the company's policy that staff must not remove stock from the premises without paying.

Tesco did not say that the conduct was theft.

To establish theft, in most Common Law jurisdictions, it is necessary to establish that a person exercised proprietary rights over the property of another, intending that the rights of the other should be extinguished or, at a minimum, diminished. Simply borrowing something, even without permission, is rarely sufficient to prove that proprietary rights have been exercised.

However, in this case, it could be argued that proprietary rights were, in fact, exercised. Once the toy is taken from the box, it is not unreasonable to see that as a demonstration of ownership. If the man simply wanted to confirm that the toy was the correct one, he could have taken a photograph with a mobile phone. If the toy is played with, then that is a demonstration of ownership by the person allowing it to be used. This is simple to understand: once it's got fingermarks or marmalade or damage, then its value is diminished. Arguably, its value is diminished as soon as the seal on the box is broken. One only has to see the re-sealed packages on the end of aisles, being sold at a discount, to understand that is so.

That the product was returned does not convert what might have been, on this view, a theft back into an unauthorised loan. In short, putting the product at risk, no matter how small, that risk, is, in civil law terms, a "conversion." That is that a person "converts" the property of another to his own use.

What the tribunal has decided, then, is this: it is acceptable for staff in shops to convert goods to their own use.

The case should not have been about policies, it should not have been about honesty or even integrity. It should have been about one simple thing: an employee took, without authority, stock and used it for his own purposes.

Extending the case, there is now, on the face of the available reports, nothing to prevent shop workers in Ireland "borrowing" clothing, including underwear or beachware, so long as it's not obviously damaged when it's returned.

The customer who buys the product is therefore getting second-hand clothing at full price to say nothing of the hygiene elements.

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