Before You Report an Employee to the Police, Investigate Properly First

What happened

An employee in charge of a booklet of acknowledgment slips discovered that several had gone missing, apparently used fraudulently by someone else entirely. He did what most conscientious employees would do: he reported it immediately to his supervisors, then to the police. He was, nonetheless, the one charged with theft.

The prosecution dragged on for roughly six years. During that time, the employer itself wrote to the prosecuting authority describing the employee as trustworthy and essential, and asked for the charges to be dropped. The request was ignored. The case eventually ended in acquittal, and the employee sued for malicious prosecution, and won.

Where it went wrong

The court’s reasoning turned on one thing: nobody had properly investigated before the complaint was made. Other staff and security personnel who also had access to the same storage office were never interviewed. The employee’s own explanation was never seriously tested. And once doubts emerged (including the employer’s own letter vouching for the employee’s integrity) nobody explained why the prosecution kept going regardless.

The legal standard for malicious prosecution doesn’t require proof that a complainant acted with obvious spite. It’s enough to show there was no reasonable and probable cause for the complaint, and that the surrounding circumstances point to a lack of good faith. An investigation that stops at “someone had access”  (without ruling out the other people who also had access) will struggle to meet that bar.

What this means for your organisation

If your business, agency, or institution is considering reporting an employee to the police over a loss, discrepancy, or suspected internal fraud, a few practical safeguards go a long way:

Interview everyone with access, not just the obvious suspect. A complaint built on convenience rather than evidence is exactly what exposes an employer to liability later.

Document your investigation as you go. If it later needs defending in court, “we looked into it” needs to be backed by dates, interview notes, and findings… not recollection.

Follow through if you change your mind. If your organisation later forms the view that the case against an employee is weak, a half-hearted or unexplained failure to withdraw the complaint can itself become evidence against you.

Remember that acquittal isn’t the only cost. Even where an employer had no ill intent, an inadequately investigated complaint that drags an employee through years of prosecution can still result in a substantial damages award once the case is over.

Malicious prosecution claims are a real and growing area of exposure for employers who report suspected misconduct without first doing the investigative groundwork. A properly documented internal inquiry  (before, not after, a case is opened) remains the cheapest insurance against this kind of liability.

CB Mwongela & Co. Advocates acted as counsel in this matter and has since worked closely with the underlying standards courts apply when weighing whether an employer’s complaint was properly grounded. If your business or institution is weighing whether to escalate a suspected internal loss or misconduct to the police, or wants its investigation and reporting procedures reviewed before that step is taken, our team advises employers on getting that process right.