Liability for employees’ personal property

An employee informs you that their mobile phone, iPod, cash and other personal effects have been taken or damaged. Is an institution responsible for loss or damage caused to employees’ personal property while they are at work?

March 27, 2008

Institutions have no stand-alone legal duty to bear the cost of replacing or repairing employees’ personal property that has been lost, stolen or damaged at work. There is also no legal obligation to provide secure facilities for employees to store their belongings, although this is strongly recommended.

Liability will depend on a number of factors including whether there are any contractual terms governing liability, whether a custom and practice exists in relation to previous incidents of damaged or stolen personal property, and the circumstances in which the loss or damage to property occurred.

Contractual liability?

When dealing with the question of liability for loss or damage to personal property, institutions should review any contractual provisions between themselves and the employee.

Often, institutions are not prepared to accept liability for their employees’ personal property that is stolen or damaged at work, and institutions in this position should include a clause to this effect in their standard terms of employment or any policy concerning personal property. A clause excluding liability could simply state that the institution will not accept liability for personal property that has been lost or damaged during the course of employment and that it is the responsibility of employees to safeguard their personal belongings. Practical steps such as placing notices in staff common areas will reinforce this message.

Even if there is no such contractual term, it does not mean that institutions cannot be liable. Where there has been a practice of accepting responsibility for loss or damage to employees’ property at work and that is maintained, it is possible for acceptance of liability to become implied into the contracts of employment.

Some employment contracts (or policies if stated to form part of the contract) may contain terms obliging institutions to provide, for example, safe storage for employees’ property. If such an obligation exists and is breached, institutions can be contractually liable for any loss or damage that occurs to employees’ property. To avoid liability in these circumstances, institutions should ensure that any such terms are expressed as a standard of good practice rather than a contractual term.

Damage or theft – employer’s negligence?

Employees whose property is stolen or damaged at work may allege that this was due to negligence on the part of their institution, such that the institution should bear the cost of repairing or replacing it.

Under the common law duty of negligence, institutions have a duty of care towards employees. This means that they are obliged to exercise a level of care that is reasonable in all the circumstances in order to avoid injury to those who may foreseeably be injured by any particular conduct, and to their property.

There is a lack of reported case law in this area, suggesting that it would be difficult for employees to bring claims in negligence unless the circumstances surrounding the loss or damage are exceptional. Even if negligence could be established, damages are not recoverable for any element of loss that could have been prevented by employees taking reasonable steps such as keeping personal property out of sight or in a secure place.

Damage or theft by work colleagues

Institutions are liable for wrongful acts committed by their employees carried out in the course of employment. An employee could therefore have a right of action against their institution if a colleague caused damage to their property in the course of their employment.

In reality, most incidents relating to employees’ property are likely to involve theft and possibly malicious damage, and as such would probably be regarded as falling outside the scope of an employee’s employment. In these circumstances it is unlikely that institutions would be held liable for any loss or damage.

Practical steps

As a matter of good practice and to avoid the risk of liability, institutions should advise staff to be vigilant in safeguarding their valuables. Adequate levels of security should be maintained and consideration should be given to providing secure places to store personal property. Institutions should consider involving the police and investigating employees suspected of damaging or stealing personal property belonging to other members of staff, if necessary taking appropriate disciplinary action in accordance with their policies and procedures.

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Reader's comments (2)

I recently was a truck driver and suffered a stroke while driving the company truck. While I was in ICU the company pick up my truck the next day, and cleaned everything out of it for another driver. When my things where supposedly picked up over half of my belongings were stolen. Who can I get in contact with to get my belongings back
I am employed by an institution to provide service to children. Months before, my pair of spectacles was damaged by a child displaying temper when I am providing service to him. Will my employer be liable to the damage?

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