When Employee Misconduct Becomes a Police Case, Keep the HR Process Separate

This article is prepared for practical compliance awareness. It is general legal information and should not be treated as legal advice on a specific employment dispute.

A difficult employment problem often starts in an ordinary way. Stock is missing, money cannot be reconciled, a delivery note looks suspicious, or a customer says that a staff member received cash outside the normal payment process. In the heat of that moment, many employers feel that the quickest answer is to call the police and then dismiss the employee once an arrest, charge or remand follows. That reaction is understandable. It may even appear sensible where the loss is serious and the business is under pressure to protect its assets. Still, it is not a safe substitute for a fair workplace process.

Why the issue matters now

The recent Court of Appeal employment decision reported on ULII in Caltex (U) t/a Chevron Uganda Limited v Ben Asiimwe and Another appears to confirm a point that Ugandan employers sometimes underestimate. A criminal process does not automatically remove the employee’s right to be heard at work. The reported summary indicates that an employer may still have to afford a disciplinary hearing even where the employee is on criminal remand. It also suggests that an unlawful dismissal may expose the employer to notice compensation and, in a serious case, aggravated damages.

That does not mean an employer must ignore suspected fraud, theft or other misconduct. It means the employer should be careful about the path it follows. The police investigate possible crime. The employer decides whether the employee breached workplace duties, employment obligations or company policy. Those two questions may overlap, but they are not the same question. A criminal court looks for criminal responsibility. A disciplinary process asks whether the employment relationship has been damaged in a way that justifies a workplace sanction. Blending the two can leave the business with a weak record at the exact moment it needs a careful one.

The practical compliance lesson

The safer approach is to open an employee misconduct and criminal allegations response file as soon as the allegation becomes serious. The name of the file is less important than its function. It should allow a labour officer, board member, investor, auditor or court to understand what happened, what evidence the business considered, how the employee was given a chance to respond and why the final decision was made. When that file is missing, dismissal can look like punishment based on suspicion, public embarrassment or pressure from the police file rather than a genuine employment decision.

A strong response file normally begins with the authority for any suspension. Suspension should be anchored in the contract, the human resources manual, the disciplinary code or a proper management decision. It should also say whether the employee remains on pay, how long the suspension is expected to last and when it will be reviewed. This is not a small detail. An open ended suspension can quietly become a penalty, especially where the police case moves slowly and nobody inside the company takes responsibility for reviewing the employee’s position.

What should be recorded before dismissal

The business should also prepare its own internal investigation memo. That memo should set out the allegation, the key dates, the documents checked, the witnesses spoken to and the loss or risk identified. It should be kept separate from the police file. In practice, this separation can feel artificial, because police statements and company records may refer to the same incident. Even so, the company needs to show that it made an employment decision on workplace evidence rather than simply relying on arrest, remand or rumour.

Before any dismissal decision is made, the employee should receive a written notice that explains the allegations in clear language. The notice should disclose enough information to permit a meaningful response. It should also state the hearing date, the possible consequences, the employee’s right to respond and any right to be accompanied where the contract, policy or law allows it. Section 66 of Uganda’s Employment Act requires notification and hearing before dismissal for misconduct or poor performance. A vague letter that says only that the employee is suspected of theft may not be enough, particularly where the business already has documents, access logs, receipts, delivery notes or mobile money records that form the basis of the accusation.

The hearing record deserves more care than many businesses give it. A useful record does not need legalistic language, but it should show who attended, what questions were asked, what explanation the employee gave, whether a representative spoke, whether an adjournment was requested and what documents were considered. If the employee is unavailable because of detention, illness or another genuine obstacle, the business should record the practical steps taken to give that person a chance to be heard. The point is not to create paperwork for its own sake. It is to avoid the impression that the employee was condemned unheard.

The final decision should then be reasoned. It should identify the evidence relied upon, explain why a particular sanction was chosen and deal with terminal dues such as outstanding wages, leave, notice or pay in lieu, benefits and a certificate of service. A dismissal letter that sounds angry or humiliating may create a second problem even where the employer believed it had a genuine concern. Tone matters because the manner of dismissal can influence the assessment of fairness and damages.

A careful first response

In the first two days after a serious allegation arises, the business should move quickly but not recklessly. Documents, access records, CCTV, delivery notes, receipts, emails and payment records should be preserved before memories fade or systems overwrite the evidence. If suspension is necessary to protect witnesses, assets or records, the letter should be short, factual and linked to the relevant contract or policy. A neutral manager, committee or external adviser can then collect the workplace evidence and prepare the disciplinary notice.

Small businesses sometimes assume that these steps are only for large companies with human resources departments. That assumption is risky. A shop, clinic, school, security company, transport business or small distributor may still have to prove that it acted fairly. A handwritten attendance note, a simple investigation memo and a clear final payment record may do more for the employer than a long but confused letter written after the dispute has already reached the labour office.

Practical conclusion

For Ugandan employers, the better rule is simple, even if the facts are not. Report suspected crime where the circumstances justify it, but do not let the criminal process replace workplace due process. A police file may support the background of the allegation, yet it should not become the employer’s disciplinary process. Businesses that keep a clear misconduct response file are likely to protect their assets more effectively, treat employees with greater fairness and defend their decisions with more confidence if the dismissal is later challenged.

Source note. This article is based on Caltex (U) t/a Chevron Uganda Limited v Ben Asiimwe and Another, Civil Appeal No. 64 of 2014, reported as [2026] UGCA 178, the Employment Act, 2006, especially section 66, and public commentary on the Court of Appeal decision issued in April 2026.