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Disposing of employee property

12 April 2012

Disposing of employee property

Siobhan Andersen, Senior Associate

When an employment relationship ends, most employees will take their stapler, spare suit jacket and family photos with them. However, some employees leave their belongings behind at the workplace for months or even years, which is at least an inconvenience and at worst, can expose an employer to liability – for instance if an employee’s property is lost, stolen or damaged. This article sets out a series of “steps” for an employer to follow to dispose lawfully of any remaining employee property.

Step 1: Reach agreement with employee and check impact of employment arrangements

Although an employee will usually take their personal property on their departure, this will not always be the case, for instance, if an employee’s employment ends unexpectedly such as in a situation involving serious misconduct. In these circumstances, if possible, an employer should agree with their employee about what will happen to their personal property. An employer should also consider whether the employee’s contract of employment, any applicable modern award or enterprise agreement, or its policies and procedures specify how it should deal with the property.

Step 2: Securely store any remaining personal property

While any personal property remains with an employer, an employer should consider what arrangements are necessary to secure that property. This is particularly important as an employer can be liable for any loss or damage suffered by an employee in connection with their personal property.

For example, the Building and Construction General On-site Award 2010 provides that if an employee is absent because of injury or illness and their tools are lost or stolen, their employer must compensate the employee a certain amount.

While an employer retains custody, it should itemise and securely store the employee’s property to minimise any risk of it being lost, damaged or stolen. Otherwise, an employer may be obliged to compensate the employee or (at worst) risk a claim for breach of award or agreement, or possible union disputation.

Step 3: Sell or dispose of any remaining personal property

An employer may not be able to make arrangements or reach agreement with an employee about how to return any remaining personal property. In those situations, various “uncollected goods” legislation sets out a framework for an employer to dispose of any employee property.

The legislation provides that an employer can sell or dispose of any remaining employee property, depending on the property’s value and nature, by providing notice and using specified methods of disposal. It is important for an employer to comply with these procedures, as monetary penalties may flow from failing to do so.

*The employer must deliver any requisite written notice to the employee in person or by post to the employee’s last known address. The notice must include the employee’s name, a description of the property, an address where the property may be collected, a statement that the property will be disposed of unless collected and any charges due to the employer (for instance, for storage), and confirmation of whether the employer will retain charges from the proceeds of sale.

After disposal, the employer must within seven days, prepare (and keep for six years) a record outlining a description of the property, the date and manner of disposal and (if the goods have been sold) the name and address of the purchaser, the proceeds of sale and the amount retained by the employer for storage, and (if applicable) the details of any auctioneer.

An employer may retain some charges from the proceeds of sale and otherwise proceed as if the proceeds were unclaimed moneys. If the employer is left out of pocket, it may be able to recover any deficit as a debt from the employee.

What should an employer do?
To minimise any troubles long after the farewell (at least with property):

  • reach an agreement for the employee to take or collect their property or for the employer to deliver it;
  • comply with any industrial instruments and policies and procedures (where applicable);
  • secure and itemise any remaining employee property; and
  • dispose of any remaining employee property in accordance with the legislative framework.


Posted in Strateg-Eyes.
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