As a team of HR Consultants, we’ve seen many businesses face the frustrating and damaging situation where an employee, on their last day, deletes critical work files before leaving. These files are intellectual property belonging to the business, and their loss can have serious consequences, from operational setbacks to legal and compliance risks.

Why do employees do this? Typically, it stems from a feeling of resentment, perceived mistreatment, or complete disengagement as they leave. Whether they feel they were unfairly dismissed or simply hold a grudge, some employees use file deletion as a form of retaliation, a final ‘reverse peace sign’ if you will as they tootle out the door one last time. The more naïve and less vindictive departing employee may not have malicious intent but fail to see the significance of keeping records intact. Regardless of the reason, businesses must have preventative measures in place to safeguard their information and hold individuals accountable when necessary.

What can you do to hold an employee accountable?

If an employee deliberately deletes company files on their last day, you may have legal recourse. Some key steps to consider:

1. Gather evidence – Before taking action, ensure you have a clear record of what was deleted, when it occurred, and any correspondence that supports your case. IT logs and backup records can provide vital evidence.
   
   
2. Check employment contracts and policies – If your contracts or company policies explicitly state that work files remain the property of the business and unauthorised deletion is considered misconduct, you may have grounds for disciplinary action or legal proceedings. If this clause is missing, it may be worth revising your documentation.
   
   
3. Legal action – Depending on the extent of the damage and the value of the deleted information, businesses may have the option to pursue legal action. This could include making a claim under intellectual property laws, breach of contract, or even referring the case to authorities if the deletion is deemed criminal (such as under cybercrime laws).
   
   
4. Withhold final pay – In some cases, businesses may be able to withhold final payments or deduct losses incurred due to file deletion, provided this aligns with local employment laws and contractual agreements. In this instance, I would recommend seeking legal advice before taking action.

Preventative measures to avoid this situation

While holding someone accountable after the fact is possible, prevention is far more effective. Actions businesses can take to protect their files and intellectual property before an employee exits include:

1. Provide company equipment
   Allowing employees to use personal devices for work purposes can result in businesses losing control over access and security. Company-issued devices ensure that IT teams can monitor, protect, and retrieve important data as needed. Without this control, a disgruntled employee could easily delete or withhold business-critical information.
   
   
2. Remove access
   Once an employee resigns (or is informed of their dismissal), depending on their role, you may consider removing access to critical files, email systems, or company devices beyond what is essential for a smooth transition.
   
   
3. Remote monitoring and disabling of devices
   Businesses should ensure they have remote access to company-provided devices to disable, track, and monitor activity. This includes a policy or clause stating that once resignation has been communicated, the business will exercise its right to monitor equipment for unusual activity for the duration of the notice period. This proactive measure may deter unauthorised file deletion, data leaks, or misuse of company resources.
   
   
4. Offboarding checklist
   A structured exit process ensures that all necessary files and information are retained before the employee leaves. Some key checks should include:
   
   • Reviewing their company-issued phone and ensuring no factory resets or data wipes have occurred.
     
     
   • Checking their computer to ensure all necessary files are intact.
     
     
   • Confirming that all project work, passwords, and documentation have been handed over.
     
     
   • Ensuring email access is disabled and any important communication is redirected.
     
     
5. Policy clarity
   A structured exit process ensures that all necessary files and information are retained before the employee leaves should include:
   
   • The requirement to return all company property (phones, laptops, files, records, vehicles and credentials).
     
     
   • A clause stating that deleting or withholding work files is a breach of company policy and may result in legal action.
     
     
   • A confidentiality agreement that extends beyond their employment period.
     
     
   • Regular reminders that IT systems are monitored and activity logs are retained for security purposes.
     
     
6. Employment contract protections
   To strengthen your legal position, include clauses in your employment contracts stating that:
   
   • All work created during employment remains the property of the business.
     
     
   • Any deletion or withholding of company files without authorisation constitutes misconduct.
     
     
   • Employees may face financial or legal consequences if they are found to have destroyed business critical information.
     
     
7. Effective immediately
   Where possible, especially if you anticipate any risk, it may be safer to end an employee’s role immediately upon resignation, especially if they have access to sensitive company data. Paying out their notice period may cost money upfront, but it significantly reduces the risk of an employee taking or deleting crucial information while disengaged or resentful or thinking because they played a hand in developing or creating a process, procedure or relationship, they can take that information with them to their next role.
   
   
8. Backup processes
   Even with the best policies in place, technology should be your safety net. Businesses should have:
   
   • Regular automatic backups of all company files.
     
     
   • Restricted permissions so employees only have access to files necessary for their role.
     
     
   • Cloud-based storage solutions where work is automatically saved and retrievable.
     
     
   • IT monitoring to track unusual activity, such as mass file deletions, or copying of data to an external device or share drive.

Final thoughts

Losing important business files due to an employee’s actions can be incredibly frustrating and damaging. However, with the right safeguards—clear policies, strong contracts, a structured offboarding process, and robust IT protections—businesses can significantly reduce the risk.

If you’re concerned about employees taking or deleting valuable company data, now is the time to review your contracts and policies. Proactively protecting your intellectual property will save you time, stress, and potential financial losses in the future.

If you need assistance drafting or reviewing your employment contracts, offboarding procedures, or IT security policies, feel free to contact our team. Prevention is always better than cure!