Stock goes missing, but the culprits cannot be identified. Can a group of employees be dismissed because it happened in their department or must the particular individual be identified? Or does one take action against the person in charge?
Arbitrators have not been consistent in their treatment of the problem, but the following broad guidelines should limit the employer’s exposure. Where the staff are unionized, any attempt at addressing the problem should involve the union. The CCMA can be approached to help facilitate a possible agreement.
The first step is to get employees to accept individual and collective responsibility for shrinkage control and stock loss in their contracts of employment. They should also be given training on how to manage and avoid it.
Second, staff should be required on a confidential basis to report on other employees who fail to exercise the required control.
Obviously, if a particular individual can be identified as being responsible for the stock loss, he or she should be acted against. If the blame cannot be laid at the door of a particular person or persons, a process should be implemented that would assign collective responsibility for combating the problem. This should commence as soon as the required standard is exceeded.
The following process is suggested:
(a) a workshop should be held with staff at the workplace concerned to determine the reasons for the shrinkage or stock loss. The primary responsibility falls on the manager or supervisor in charge and one should obtain evidence from him or her about what they have done to address the problem. If nothing or too little has been done, action should be taken against the person in charge. The workshop may also generate sufficient information to enable action to be taken against other individuals, either on the basis of misconduct or poor performance.
(b) If a specific individual cannot be held responsible, other possible causes of shrinkage beyond the employees’ control must be identified. An action plan to control further stock loss or shrinkage should be developed together with staff. This should provide for a set number of follow-up stock takes (a minimum of 2 is suggested) within a given period, e.g. every 6 to 9 weeks and for a further meeting to be conducted after each stock take, where the process outlined above is repeated.
(c) The employees should be made aware at each meeting that their services could be terminated if the problem was not remedied. Depending on how many meetings have been scheduled in the action plan, it is important that an ultimatum should be issued to all staff at the final meeting stating that dismissal may result should the problem not be remedied within a given period. (The possibility of rotating teams during this period should also be considered as this might provide a firm indication of a particular team’s culpability should it transpire that the new team was able to control shrinkage under the same circumstances.)
(d) Should shrinkage continue despite the above steps, an enquiry should be held. The enquiry is in the form of an incapacity enquiry (for poor performance). Employees should be given a choice between an individual or collective hearing.
The person chairing such an enquiry faces a greater challenge than in most other cases (See the box below for guidelines). If the process outlined above is followed, however, it is likely that the problem would be eradicated before an enquiry becomes necessary.
Guidelines for a person chairing an enquiry involving collective responsibility for shrinkage/stock loss
The chairperson should ensure that the following can be answered in the affirmative:
- Was a stock loss standard implemented?
- Were all employees made aware of it?
- Is there sufficient proof that the required standard was not met?
- Was it the responsibility of each employee to ensure compliance with the standard?
- Was each member of the group capable of meeting the standard? (i.e. has each member of the group been given sufficient information and training to be able to meet the standard?)
- Confirm that no individuals can be identified at this point who could have been responsible for the problem.
- If none can, are there any extraneous causes for the shrinkages over which the employees have no control?
- Have the required number of shrinkage workshops been held?
- Is it confirmed that the action plan was not complied with?
- Were the employees given sufficient time to implement the action plan?
- Were they given sufficient assistance, counseling and instruction to comply with the action plan?
- Were the employees given the right to be heard (individually or collectively)?
- Is dismissal appropriate in the circumstances or are there other workable alternatives available?