If an individual whose employment comes to an end fails to return company property what action can the employer take?

If an employee fails to return company property at the end of their employment having been asked to do so, the employer should check the contract of employment to see if there is a return of company property clause. In particular, it should check if there is a clause enabling the employer to make deductions from the employee's final salary payment in the event that company property is not returned.

It will be possible for the employer to make a deduction from the employee's salary to cover the cost of the missing property only if there is a specific clause in the contract that permits this, or the employee has signed a written agreement giving their consent to the making of the deduction. Even if there is a clause, it must have been drafted in such a way that it represents a genuine pre-estimate of the loss or damage that the employer could suffer as a result of the employee's failure to return the company property and it must not act as a penalty on the employee. Penalty clauses are unenforceable. In this case, it is likely that the clause would have to restrict the deduction to the second-hand replacement cost of the missing property.

If there is no appropriately drafted clause or agreement, the employer would have to make a claim in the civil courts against the employee for "trespass to goods" in failing to return the company property. If there is a return of property clause but either the employee has already been paid all outstanding wages or the clause does not cover deductions from the employee's wages, the employer would have to make a claim in the civil courts for breach of contract and/or trespass to goods. The employer can claim damages for actual financial loss only; there are no damages for inconvenience. The starting point here would be for the employer to write a letter before action to the employee demanding that the property be returned within a certain number of days, failing which legal proceedings will be issued without further notice.

One final option would be for the employer to report the matter to the police to see if they are willing to investigate whether the criminal offence of theft has been committed. Unfortunately, in most cases, the police will say that the matter is a civil one because the employer provided the company property to the employee at the outset, meaning that there was no dishonest appropriation of the property. It is nevertheless worth the employer adding into the letter before action that the matter will also be reported to the police. In many cases, this will be a sufficient threat to ensure that the company property is returned.