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Club Insure Article – Minimise Against Employee Theft

The ACC knows that the vast majority of Club employees are loyal, hardworking and well-liked by the Club’s Members. Indeed, in many Clubs the Club Steward will be best friends to the Members who frequent the Club the most. However, in all employment areas but specifically hospitality and retail, employers have to be careful to minimise the risk of theft.  Club Insure have therefore written the following article to remind Clubs to ensure that, as far as possible the possibility of theft, is minimised.

New research from Investors In People (IIP) suggests that more than half of hospitality employees (65%) are currently unhappy in their jobs and considering a move.

Such startling statistics are worth considering even in Clubs which have a much lower rate of employee turnover and theft than other hospitality areas.  Research shows that unhappy employees are more likely to cause harm, disruption or ruin reputation than those who are happy in their working environment.

 Club Insure offer some simple, yet effective advice for discouraging employee theft.

Recruitment: If possible hire from within so you are familiar with the candidate, failing that seek recommendations or extensive past experience.  Interview thoroughly, gain references and get a second opinion. 

Physical Security: Consider a company in which doors are regularly left unlocked or sensitive financial information is not secured - you are inviting employees to take advantage.  Make sure all entrances and sensitive doorways are locked and monitored.  A key card system is more favourable than traditional keys for recording access.

Install a good quality safe:  Be sure it is fireproof, securely anchored and kept in plain view.  The combination should be changed when an employee who had access, leaves your business.  The keys to the safe MUST be removed from the premises out of business hours or placed within a locked safe or strong room – the keys to which are themselves removed from the business premises. 

Keep a virtual eye on employees: People are less likely to steal if they know they are being watched.  A video surveillance system helps deter employees as well as catch theft after it happens.  Be sure to include cameras in storage rooms and loading areas as well as in public areas.  Use high-definition video so you can clearly identify employees and transactions.  Limit the access to your surveillance systems to as few people as possible to avoid tampering.  Most local police authorities recommend keeping CCTV footage for a minimum of 14 -31 days.

Another way to keep an eye on your employees is to use an exception-based reporting system at your point of sale to flag possible fraudulent transactions e.g. excessive refunds or voids (ideally managers should be responsible for voids and refunds but at the very least they should be witnessed by a second employee.)  Review POS several times a week to determine if there are any issues that you need to look into further.  Implement surprise audits and regular reconciliations, these might include surprise cash counts.  The procedures don’t have to be elaborate. If employees know their work could be checked at any time they are more likely to be honest and accurate.  

Monitor your rubbish: Employees often steal money/merchandise by concealing it in rubbish bins then retrieving it later.  Club Insure recommend putting controls in place to reduce the opportunities, such as using clear rubbish bags, flattening all boxes and locking refuse areas. 

Utilise your workforce: Set up a confidential way for employees to report co-workers’ suspicious behaviour.  People are less likely to steal if they know they are being watched. 

Get to know your employees: It’s much easier to steal from someone you don’t know than from someone you do.  Club Insure recommend getting to know your employees and being aware of their personal and financial situations.  Financial difficulties or high levels of stress increase the impulse to steal.  

Discipline: Dealing swiftly with theft communicates to employees that management take the issue seriously.  An internal discipline policy should be developed and communicated to employees.  Make them aware of the range of disciplinary options, from a verbal warning to a written warning to a suspension or dismissal.  

Common sense: Minimise the amount of cash you keep on the premises.  Make frequent pick-ups of money from tills and regular bank deposits.  Keep valuable items locked out of easy reach.

Club Insure are an ACC Recommended Supplier and can be contacted on 0844 488 9204.

Gem Hygiene Update

Gem Hygiene are allegedly delivering cleaning supplies to Clubs without having being properly approved or ordered by a Club’s Committee or appointed individual.

Their modus operandi is, allegedly, the following.  They will call the Club in order to obtain the names of the Club Secretary / Steward / Chairman.  Alternatively, they will speak to a Member of the Club’s bar staff and offer to send samples which can then be returned if the Club does not wish to keep them.  What they will not make clear is that acceptance of these ‘samples’ will enter the Club into a contract with Gems Hygiene to purchase the goods. They may also state to the bar employee that they are previous suppliers to the Club or that they are attempting to just arrange a regular delivery of standard cleaning supplies which the Club uses.

Cleaning goods to the value of between £250.00 -£350.00 are then delivered to the Club, on the reverse of the delivery note it a cancellation policy, stating that if you do not want the goods you must inform Gem within a specific number of days or a cancelation fee will apply.  

They then chase the Club for the money.  Do not be bullied into paying any money for goods which have not been ordered and ignore their threats of legal action being taken against the Club.  Please contact the ACC and we will refer this matter to Trading Standards.

This company were active with the same approach to Clubs some years ago but appear to be contacting Clubs again.  Clubs may wish to take this opportunity to provide a general reminder to all bar employees never to enter into any type of an agreement with a supplier during an unsolicited telephone conversation. 

Q & A

Q.  Our Rules state that the Club’s Annual General Meeting should be held in the month of April although our Audit will not be ready until May.  Should we delay the AGM?

A.  If the Audit is not going to be ready until May then in these circumstances it would be logical to delay the AGM.  A notice to this effect should be posted on the Club’s Notice Board.  In future I suggest that significant time is given to the Audit to allow the Annual General Meeting to proceed as usual in April.

If you wanted to hold the AGM in April, for instance if you felt that Members may complain if the Meeting was not held in April, then the Meeting could be held in April and all other agenda items dealt with apart from the Accounts.  The Meeting could then be adjourned until a specific date in May and then resumed to solely deal with the approval of the Club’s Accounts. 

Q.  Can you let us know what the statutory holiday allowance for employees should be and whether bank holidays should be taken as part of the allowance or on top?

A.  All employees, whether full-time or part-time, are legally entitled to 5.6 weeks’ paid annual leave.  Additional annual leave may be agreed as part of a contract.  A week’s leave should allow employees to be away from work for a week i.e. it should be the same amount of time as the working week.  If an employee works a five-day week, they are entitled to twenty-eight days leave per annum.  If an employee works a three-day week, the entitlement is 16.8 days leave per annum.

Employers can set the times that employees take their leave, for example for a Christmas shutdown.  If an employment ends, the employee has a right to be paid for the leave time due and not taken. 

There is no statutory entitlement to paid leave for public holidays.  Any right to paid time off for such holidays depends on the terms of the contract.  If the contract does not specify this, the right to paid leave may have built up through custom and practice.  Paid public holidays can be counted as part of the statutory 5.6 weeks’ holiday entitlement under the Working Time Regulations 1998. 

There are normally eight Public Holidays per year.

Q.  Are employees able to use the Club’s Gaming Machines?  We have Members who consider that it would be unfair for an employee to win a jackpot, perhaps aided by watching the machine. 

A.  Opinion is divided on whether it is possible for a person to determine when a machine might pay out although we are aware that there is a common perception that watching machines gives rise to an unfair advantage. 

Gaming machines have to adhere to strict average pay-outs and this is calculated over the course of a machine’s entire life and is therefore unpredictable.  It may be that a machine goes months between the jackpot being won or it may be that two jackpots occur on the same day.  With the advent of extra features such as nudges and hi/lo features it is even more difficult to calculate out if a machine is about to pay out.

It is, however, preferable to avoid any possibility of an unfair advantage, real or imagined, and as such it is good practice to prohibit Club employees from using the Club’s gaming machines.