There is no stand alone legal obligation on employers to bear the cost of replacing or repairing employees' personal property which has been lost, stolen or damaged at work. Furthermore, there is no legal requirement for employers to provide secure facilities for employees to store their belongings, although this is strongly recommended.

As such, employees commonly have to claim for such loss or damage on their own household insurance policies or bear the cost of replacing or repairing the property themselves.

Liability will ultimately depend on a number of factors including any contractual terms governing liability, the perpetrator of the damage or theft (if known), custom and practice in relation to previous incidents of damaged or stolen personal property and the circumstances in which the loss or damage to property occurred.

The contractual position

When dealing with responsibility for loss or damage to personal property, it is advisably to first check any contractual provisions between the company and the employee regarding liability.

Commonly, employers are not prepared to accept liability for personal property stolen or damaged at work. If they have not done so already, these employers should include a clause to this effect in their standard terms of employment and/or handbook or relevant company policy.

In the absence of a contractual term governing liability for loss of personal items of property, terms may be implied by a court into a contract by reason of custom or practice. Therefore, if an employer has maintained the practice of accepting responsibility in the past in situations where employees' property has been damaged or stolen whilst they have been at work, this acceptance of liability may well amount to an implied contractual term in the contracts of other employees.

Any clause excluding liability could simply state that the employer will not accept liability for personal property which has been lost or damaged during the course of employment and that it is the responsibility of employees to safeguard their own personal belongings. This position could be reinforced with the use of notices in staff common areas such as cloakrooms and staff canteens reiterating the message that staff leave personal property at their own risk.

Alternatively an employer may have adequate insurance in place and therefore be willing to accept liability, although this is less likely. This means that in the event of loss or damage to an employee's property, the employee could have a contractual claim against their employer for damages. It is essential that any contractual clause or provision in the employer's handbook or relevant policy clearly sets out the precise terms on which the employer is willing to accept responsibility. To ensure that the employer will be adequately indemnified in the event of a claim, these conditions should, at the very least, mirror the terms and conditions contained in the employer's own insurance policy. For example, the employer may need to stipulate that it will only assume responsibility for property which has not been left unsecured by the employee or that the employer will only bear the cost of any item of personal property up to a capped amount.

One other point to note is that an employer may be contractually liable for loss or damage if it breaches a contractual term contained in the employee's contract of employment (or a handbook or company policy if either is expressed to form part of the employee's contract) conferring an obligation on the employer to, for example, provide secure lockers and this breach results in loss or damage to an employee's belongings. To avoid liability in these circumstances, employers are advised to ensure that such terms are expressed as a standard of good practice which the employer is expected to follow rather than as a contractual term.

Other possible claims by the employee

An employee could have a potential claim against their employer if the loss or damage was due to the employer's own negligence or the damage to their property was carried out by a work colleague, although such claims would be difficult for employees to bring in practice for the reasons set out below.

Damage or theft caused by employer negligence

An employee may attempt to argue that the theft or damage to their property was caused by their employer's negligence and therefore that the employer should bear the cost of repairing or replacing that property.

Under the common law duty of negligence, employers have a duty of care to their employees. This means that they have an obligation to exercise a level of care towards individuals, as is reasonable in all the circumstances, to avoid injury to those who may foreseeably be injured by any particular conduct, or to their property. Therefore to successfully bring a claim for negligence, the employee would have to demonstrate that he was owed a duty of care, that the employer breached that duty and that he suffered a loss as a result which was not too remote.

The lack of case law in this area suggests that it would be difficult for an employee to bring a claim in negligence unless the circumstances surrounding the loss or damage are exceptional. A hypothetical example of such exceptional circumstances could be where an employer fails to investigate a speight of thefts on company premises and does not provide reasonable security measures. There then follows another incident of theft to staff property or where an employer fails to act following reports of an unauthorised person on site carrying a crowbar and an employee's car is subsequently broken into and their property stolen.

However, even if the employee did establish that their employer

was negligent, they could not recover damages for any part of their loss which could have been prevented by them taking reasonable steps such as keeping the item of personal property out of sight or in a secure place.

Damage or theft by work colleagues

An employer is liable for the wrongful acts of its employees carried out in the course of employment. An employee could therefore have a right of action against their employer if a colleague caused damage to their property in the course of their employment. For example, if an employee drove a company vehicle carelessly during the course of their employment and caused damage another employee's car.

However the majority of incidents relating to employees' property is more likely to involve theft of property and possibly malicious damage. As such actions would probably be regarded as outside the scope of an employee's employment, it is unlikely that the employer would be responsible or liable for any loss or damage in these circumstances.

An exception to this may arise if property was left with an employee who was specifically entrusted with employees' personal possessions, such as a security guard or car park attendant.

Practical tips

For the reasons set out above, it is very unusual for an employer to be held responsible for damage to, or theft of, employees' belongings.

Nevertheless as a matter of good practice and to avoid the risk of liability, employers should consider taking the following measures to reduce the number of incidences of theft or damage to employees' property:

• Maintaining security measures such as intruder alarms and CCTV;
• Warning employees of incidents known to the employer, for example, where a number of thefts has taken place so that employees can be extra vigilant when safeguarding their valuables;
• Providing a secure place to store items of personal property such as lockers and lockable desk drawers (particularly if the employer has a policy of prohibiting employees from taking personal property or cash onto the shop floor);
• Maintaining a clear and well publicised procedure for staff to inform their employer of loss or damage to their property;
• Developing a "stop and search" policy and carrying out searches of employees' handbags etc on a regular basis;
• Involving the police in every incident of suspected theft of or criminal damage to employees' property; and
• Investigating employees suspected of causing damage or stealing personal property belonging to other members of staff and, if necessary, taking appropriate disciplinary action in accordance with the company's disciplinary policy.

Naeema Choudry is a partner specialising in employment at international law firm Eversheds.

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