Return of Company Property Agreements – Setting up Now can Avoid Future Headaches

May 28, 2025

It’s the last day of an employee who has given their resignation. It’s time to retrieve their company laptop and smartphone they’ve had since the start of their employment. There are certain policies and procedures that need to be followed, but let’s first start with an important question…

Are employees obligated to return company property?

Whether it’s a parking pass or vehicle, employees are obligated to return company-owned property once they leave the company. This applies even if they believe they were wrongfully dismissed. Although there isn’t specific legislation that states this, employers are entitled to reclaim company property from a worker in accordance with the employment contract and/or policies.

Why is it important to reclaim company assets once an employee leaves?

The main goal of reclaiming company property is to protect finances, privacy/security/intellectual property, and reputation:

Financial loss

The most obvious disadvantage of unclaimed company property is financial loss. Electronic Devices, tools, workspace memberships, cars, and even office supplies all add up. Recovering them means the company won’t lose out on financial resources that could be used for other employees or other areas of the business.

Privacy, security and intellectual property concerns

When it comes to items like key cards and parking passes, former employees could later gain unauthorized access to the building or facilities. Having access to laptops and other devices could lead to sensitive company and employee data being viewed, manipulated, leaked, or sold.

It is also recommended to ensure employees are returning any files, documents, or work that is the intellectual property of the company. Depending on the nature of the role and company, it is helpful to have a clause in an employment contract stipulating that any work the employee produces during employment is the intellectual property of the company, and is not owned by the employee.

Company reputation

Recovering property lowers the chances of the company brand being misrepresented by former employees or other individuals who gain access to that property.

How can you protect your company when reclaiming property?

Retrieving company property can be a delicate process, especially if the employment relationship is being terminated and is challenged by an employee. The best way for an employer to protect the company and its assets is to have concrete measures in place ahead of an employee departure or leave of absence. Some of these measures could include:

Having a clear policy in place

Employment contracts should include clauses that outline what and when company property should be returned in case of a termination, resignation, or leave of absence. Employers should also consider clauses that outline how company assets should be used while in possession of the employee to prevent constructive dismissal claims.

Reminding exiting employees in advance

If possible, give employees who are leaving the company a written reminder about returning all company property. If there is already an agreement in place, this would be a suitable time to mention the timelines mentioned in this agreement and ensure they have a copy to refer to if necessary.

Inventory Tracking

Keeping track of company property through regular audits give employers a clearer idea of what company assets are available and connect each asset to either individual employees or departments. This would give a company a clearer idea of what property might be in possession of the employee, so there are no surprises later.

Do you want to set up a Return of Company Property Agreement for your company?

Although legal action could be taken against employees who refuse to return company property, the best action is to set up or revise an agreement before challenges occur. If this is something you would like to set up for your company, reach out to learn how our HRPAR can help with this process.