Criminal Offenses Frequently Committed by Employees Against Their Companies and the Penalties

In the fast-paced and competitive world of business, trust is paramount. Crimes in the workplace can take various forms, but one of the most insidious is the creation and misuse of deceptive documents by employees, particularly those in managerial positions.

The impact of these crimes can be profound for the company. Therefore, this article will focus on breach of trust, embezzlement of funds, forgery and fraud perpetrated against employers by employees.

Forgery

Forgery is a serious concern with significant societal implications. It involves the creation of a false instrument intended to deceive others into accepting it as genuine, thereby causing harm.

Under Article 251(4) of the Crimes and Penalties Law, forging a document or falsely attributing it to a third party constitutes forgery. UAE law imposes strict penalties, including temporary imprisonment for up to 10 years, for misappropriating fake official documents. The effects of forgery extend beyond immediate financial losses; forged documents can lead to severe consequences for employers.

Embezzlement of Funds

Embezzlement refers to the dishonest appropriation by an employee of money or valuables entrusted to them by their employer. The UAE Penal Code outlines severe consequences for those misusing their positions within a company.

It stipulates that individuals who unlawfully seize company papers or funds through misuse of office can face temporary imprisonment. Additionally, using forged documents exacerbates the penalty to a minimum of five years' imprisonment.

Thus, employees guilty of embezzling funds or misappropriating company papers may face imprisonment. Consequently, embezzlement damages the company's reputation, undermining trust among clients, investors and stakeholders, thereby jeopardising business opportunities and tarnishing the company's image.

Fraud

Fraud involves knowingly or recklessly making false representations through statements or conduct to gain a material advantage. Within companies, fraudulent activities encompass unethical practices such as misappropriation of assets or falsification of documents.

Employee fraud against employers poses a significant threat to company stability, involving deceptive actions aimed at personal gain. According to the Crimes and Penalties Law, individuals unlawfully taking property or using deceitful means for personal benefit can face imprisonment or fines.

Breach of Trust

Breach of trust occurs when a person in a position of responsibility, such as a trustee, fails to fulfil their duties, thereby betraying the trust placed in them.

This betrayal often results in harm or loss to the company. Breach of trust can lead to financial losses and damaged reputations, ultimately affecting the company's standing.

Under Article 453 of Federal Decree-Law No. 31 of 2021, individuals misappropriating entrusted money or documents to the detriment of the rightful owner can face imprisonment or fines.

For instance, a manager creating documents on behalf of the company and subsequently delegated to employees who misuse them could result in liability and subsequent damages for the company, potentially leading to imprisonment or fines for those involved.

Conclusion

Federal Decree-Law No. 31 of 2021 (Crimes and Penalties Law) safeguards employers against fraudulent actions by employees, which pose significant risks to companies. Understanding the severe penalties outlined in this law serves as a strong deterrent, discouraging involvement in criminal activities.

The law aims not only to protect employers but also to ensure that individuals engaging in fraud face appropriate consequences. 

For any enquiries or information, contact ask@tlr.ae or call us on +971 52 644 3004. Follow The Law Reporters on WhatsApp Channels.