WHO is responsible for loss or damage caused to employees’ personal property whilst they are at work? Are there any legal obligations on employers?
There is no stand-alone legal obligation on employers to bear the cost of replacing or repairing employees’ personal property which has been lost, stolen or damaged at work. Furthermore, there is no legal requirement for employers to provide secure facilities for employees to store their belongings.
Employees commonly have to claim for such loss or damage on their own household insurance policies or bear the cost of replacing or repairing the property themselves.
Liability will ultimately depend on a number of factors, including any contractual terms governing liability, the perpetrator of the damage or theft (if known), custom and practice in relation to previous incidents and the circumstances in which the loss or damage occurred.
The contractual position
First, check any contractual provisions between the company and the employee regarding liability.
Commonly, employers are not prepared to accept liability for personal property stolen or damaged at work. Employers should include a clause to this effect in their standard terms of employment and/or handbook or relevant company policy.
In the absence of a contractual term governing liability for loss, terms may be implied by a court into a contract by reason of custom or practice. Therefore, if an employer has maintained the practice of accepting responsibility in the past, this acceptance of liability may well amount to an implied contractual term in the contracts of other employees.
Any clause excluding liability could simply state that the employer will not accept liability for personal property which has been lost or damaged during the course of employment and that it is the responsibility of employees to safeguard their own personal belongings. This position could be reinforced with the use of notices reiterating that staff leave personal property at their own risk.
Where employers are willing to accept liability, it is essential that any contractual clause in the employer’s handbook or relevant policy clearly sets out the precise terms on which the employer is willing to accept responsibility. These conditions should mirror the terms and conditions contained in the employer’s own insurance policy.
One other point to note is that an employer may be contractually liable for loss or damage if it breaches a contractual term conferring an obligation on the employer to, for example, provide secure lockers and this breach results in loss or damage to an employee’s belongings.
To avoid liability in these circumstances, employers are advised to ensure that such terms are expressed as a standard of goodwill rather than as a contractual term.
Damage or theft caused by employer negligence
An employee may attempt to argue that the theft or damage to his or her property was caused by the employer’s negligence and therefore that the employer should bear the cost of repairing or replacing that property.
Under the common law duty of negligence, employers have a duty of care to their employees. This means that they have an obligation to exercise a level of care towards individuals, as is reasonable in all the circumstances, to avoid injury to those who may foreseeably be injured by any particular conduct, or to their property.
To bring a claim for negligence successfully, the employee would have to demonstrate that he was owed a duty of care, that the employer breached that duty and that he suffered a loss as a result which was not too remote.
The lack of case law in this area suggests that it would be difficult for an employee to bring a claim in negligence unless the circumstances surrounding the loss or damage were exceptional.
Damage or theft by work colleagues
An employer is liable for the wrongful acts of its employees carried out in the course of employment. Employees could, therefore, have a right of action against their employer if a colleague caused damage to their property in the course of their employment.
However, the majority of incidents relating to employees’ property is more likely to involve theft of property and possibly malicious damage. As such actions would probably be regarded as outside the scope of an employee’s employment, it is unlikely that the employer would be responsible or liable for any loss or damage in these circumstances.
An exception to this may arise if property was left with an employee who was specifically entrusted with employees’ personal possessions, such as a security guard or car park attendant.
Practical tips
For the reasons set out above, it is very unusual for an employer to be held responsible for damage to, or theft of, employees’ belongings; nevertheless, as a matter of good practice and to avoid the risk of liability, employers should consider taking the following measures to reduce the number of incidences of theft or damage to employees’ property:
- maintaining security measures such as intruder alarms and CCTV;
- warning employees of incidents known to the employer – for example, where a number of thefts have taken place so that employees can be extra vigilant when safeguarding their valuables;
- providing a secure place to store items of personal property, such as lockers and lockable desk drawers (particularly if the employer has a policy of prohibiting employees from taking personal property or cash into work areas);
- maintaining a clear and well publicised procedure for staff to inform their employer of loss or damage to their property;
- developing a “stop and search” policy and carrying out searches of employees’ handbags, etc., on a regular basis;
- involving the police in every incident of suspected theft of or criminal damage to employees’ property; and
- investigating employees suspected of causing damage or stealing personal property belonging to other members of staff and, if necessary, taking appropriate disciplinary action in accordance with the company’s disciplinary policy.
