WHAT TO DO WHEN . . . . Staff Make A Costly Mistake

ARTICLE 27

WHAT TO DO WHEN . . . . Staff Make A Costly Mess

By Nikki Viljoen – N Viljoen Consulting CC – May 2009

Many of us have had costly machinery or equipment and even property, damaged by staff. Apart from a sharp increase in our blood pressure and our stress levels, is there anything else that we can do?

So let’s have a look at our usual protagonists. Mike owns a furniture shop and he has several delivery vehicles. George is the driver of one of the delivery vehicles.

George and his vehicle were stopped in a roadblock and Mike received a long list of things that were wrong with the vehicle. Things like both indicators and brake lights not working, faulty brakes, no spare wheel, badly cracked windscreen and several other issues totaling thousands of rands.

Mike, understandable is absolutely furious, I mean – who wouldn’t be? But is there anything that Mike can do about it?

Well let’s have a look. Firstly – are there any procedures in place? Has George signed for and accepted the responsibility for his vehicle? Are the vehicles booked in regularly for service? Is there a daily checklist in place to ensure that the vehicle is fit to be on the roads?

If procedures are in place and George has not followed them, then clearly he is at fault and there is a consequence.

If however, no procedures are in place to ensure the wellbeing and maintenance of the vehicles – then in my opinion, Mike must share the responsibility and accountability.

So what can Mike do about this? Well in this case – Mike has policies and procedures in place. All the drivers sign a document when they take delivery of the vehicle, stating that ‘where failure to adhere to laid down procedures results in damage to the vehicle the driver will be held responsible for the cost of the damage and said costs will be deducted from his salary”. George has signed the document agreeing to this.
Mike checks George’s documentation and is both shocked and horrified at what he discovers. George has signed off on documentation indicating that the vehicle has been serviced regularly – the reality is that has missed five service dates. George’s daily documentation indicates that the brake and indicator lights were checked and found to be in good working order. Tires were checked and found to be in good order. In fact the paperwork evidences that George’s vehicle is in tip top condition. The sad reality however paints an entirely different picture altogether. The bodywork is badly scratched and dented in several places, the vehicle needs new tyres and most of the tools and equipment that is standard issues on the vehicles, are missing.

Clearly George has been dishonest in his paperwork and he is now responsible.

What does the law say?

Well, since the damage to the vehicle was caused by George and the loss of the tools and equipment on the vehicle was George’s responsibility – George becomes financially liable for these.

Mike will have to follow the usual disciplinary procedures and George must be allowed to show why the deductions should not be made.

That said, George has signed in agreement to owning the responsibility and Mike can make deductions from his salary as long as:
· the total deductions from George’s salary cannot exceed the amount of the loss or damage. In other words you cannot charge him more than it cost you.
· The total deductions from George’s salary cannot exceed one quarter of his monthly remuneration.

Here’s the thing though – if George decided to leave Mike’s company before the debt is fully paid, Mike would have to institute legal proceedings against George.

So the answer obviously is – yes you can claim monies back from employees who damage your machinery, equipment and property.

It’s easier to claim such damages if you have proper procedures and policies in place.

Remember though that you have to have the employee’s permission to deduct money from their salaries and you cannot deduct more than 25% of their monthly salaries.

The time has come to make people responsible for their own actions.

Nikki is an Internal Auditor and Business Administration Specialist who can be contacted on 083 702 8849 or nikki@viljoenconsulting.co.za or http://www.viljoenconsulting.co.za