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Can you deduct money from employees for end of shift cash shortages?

Mark Fletcher
November 15th, 2013 · 16 Comments

A newsagent asked me yesterday if they could deduct end of shift cash shortages from employee pay? I advised I’d never done it but didn’t know the law.

searching online I found an excellent website, Workplaceinfo, with this advice:

6. Cash shortages

Another common problem is cash shortages by employees whose duties include the handling money.

Generally, the employee cannot be held responsible for the repayment of any shortages which may occur unless the employee has sole access to the money.

An award or agreement may make provision for recovery of any shortages, however, a proper investigation would still need to be conducted by the employer to determine the guilt or innocence of the employee.

The absence of such a provision does not affect the employer’s right to take such disciplinary or legal action as the employer considers necessary.

So it comes down to what you have agreed with your employees. It starts with what is in the contract, what is in any applicable award and the rules of the business. Plus it relies on the evidence you have and the process you go through to determine who is at fault.

The key is to have a structured end of shift process that leaves little to chance and everything to documentation. The more you use a consistent system or process for managing money and data in your business the easier it is to handle cash shortages. Sloppy processes lead to mistakes and undesired costs.

For more reference, check out the University of Southern Queensland’s policy on cash floats.

4 likes

Category: Newsagency management · theft

16 responses so far ↓

  • 1 Jarryd Moore // Nov 15, 2013 at 12:41 PM

    To my knowledge no award covering this industry makes any such provision. The federal award certainly does not.

    It is my understanding that the Fairwork legislation would not allow a clause in an enterprise agreement that allowed employers to claw back cash shortages.

    The same applies to any things like stock being damaged by the employee or theft occurring under their watch.

    Regardless, it would be immensely bad for the employer/employee relationship to try and claw back such costs even if one could.

    0 likes

  • 2 Brendan // Nov 15, 2013 at 1:12 PM

    It’s common practice in TAB’s for staff to make up shortages so it must be possible if all the I’s are dotted and T’s crossed.

    1 likes

  • 3 Glenn // Nov 15, 2013 at 1:13 PM

    Whilst I would not advocate making employees pay for short tills at the end of day, I think there does need to be some level of accountability for the way they handle someone elses cash.

    I would have no issue in making them pay for a mistake on a transaction where it is clear they have simply not concentrated on the task at hand – eg given a customer too much change when the till clearly shows what the change should be, or simply forgetting to charge for an item because they are distracted and talking to other staff whilst serving (my pet hate).

    In my letter of offer of employment to every staff new member it clearly states that they MAY be held liable for such instances, and it is an added incentive for them to concentrate if they know it could potentially cost them personally for any mistake.

    In reality, we very rarely have the need to invoke this but the possibility is always there.

    1 likes

  • 4 rick // Nov 15, 2013 at 1:19 PM

    ive worked a sunday on my own and the cash has been out, so unless I could be rock solid certain who has messed up I would not even suggest this

    3 likes

  • 5 Jarryd Moore // Nov 15, 2013 at 2:51 PM

    Exactly rick. We all makes mistakes. Its not that hard to do when its busy and your dealing with array of different customer requests. The important thing is that we make people aware when we find they make a mistake and implement processes to reduce the potential for it to happen again.

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  • 6 Jarryd Moore // Nov 15, 2013 at 2:55 PM

    Glen,

    From a legal perspective it makes no different what is in your letter of employment or even an document signed by the employee if it is not recognised under the legislation.

    To make an employee pay for a mistake as you describe would not be permitted under the law and would possible leave you open to legal action from the employee or the relevant IR body.

    0 likes

  • 7 Jarryd Moore // Nov 15, 2013 at 2:59 PM

    Brendan,

    I’m not sure how the TAB award/agreement is structured so I can’t comment on specifics, however a similar practice is also commonplace in some service-stations with drive-offs. Those service-stations are acting illegally. It could be that TAB employers are as well.

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  • 8 Mark Fletcher // Nov 15, 2013 at 3:01 PM

    Read the links. There is device there in process.

    0 likes

  • 9 Glenn // Nov 15, 2013 at 3:57 PM

    Jarryd,

    The legal position of the statement only becomes relevant if I tried to enforce it. The point I am trying to make with it is that we expect every staff member to take all reasonable care to ensure the business doesn’t suffer a loss because they cannot be bothered to concentrate on their task at hand.

    I absolutely accept that everyone makes mistakes, and the same ones more than once, and that these are the best experiences from which to learn, but how many times can the mistakes happen before someone says enough is enough? I don’t accept that there can be no level of accountability and that stupid inexcusable mistakes can be allowed to happen without any fear of repercussions.

    All the training and systems on the planet are of little use when an individual is not focussing on their task at hand or following said procedures. Fortunately our current staff are excellent and this is not an issue for us, but it could be as staff change.

    0 likes

  • 10 Jarryd Moore // Nov 15, 2013 at 4:13 PM

    http://www.workplaceinfo.com.au/resources/employment-topics-a-z/deductions-from-wages

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  • 11 Jarryd Moore // Nov 15, 2013 at 4:18 PM

    Glen,

    There should absolutely be accountability. I’m just saying that the law says it can’t come in the form of a deduction from ones wages.

    The ultimate accountability is that if a person continues to make mistakes it would be reasonable for an employer to deem them incapable of performing the duties of their job and subsequently terminate their employment.

    0 likes

  • 12 shauns // Nov 15, 2013 at 6:13 PM

    What if your till is over for the day are you going to go about handing money out to your employees i think not . Really the whole idea is a bit silly if you ask me . At the end of the day if you continue to let employees stuff up it is your own fault as an owner/manager.

    2 likes

  • 13 Lance // Nov 15, 2013 at 8:01 PM

    Shaun’s got it.
    If it happens occasionally, so be it. If it happens repeatedly, it’s time to look at management before you look at staff.
    Once the management has got their head around the issue, the issue should vanoish.
    If it doesn’t, managment needs their bum kicked, if it’s your own bum, so stand up and cop it, then take some genuine action to see that the till balances more often than not.
    Mark has repeatedly given us ideas on how to make this happen.
    Is the staff at fault, or is it management for allowing it to happen ?

    0 likes

  • 14 Allan Wickham // Nov 15, 2013 at 8:54 PM

    Shauns and Lance, just remember “tills over can be as damaging as tills over” when it comes to staff theft.

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  • 15 Allan Wickham // Nov 15, 2013 at 8:55 PM

    Sorry, “tills over as bad as tills under”

    0 likes

  • 16 Lance // Nov 15, 2013 at 10:05 PM

    Won’t dispute that for a moment allan :-0

    0 likes

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