It's 'pasta la vista' for exec accused of misleading Bolognese expense claims
Earlier this month, a bank executive sued his former employer after he was let go following an investigation into his expenses.
After jetting off on a work trip to Amsterdam, the employee submitted his expense forms – which raised some eyebrows after bosses suspected the meals were for two people.
According to Metro, the employee took his partner on the trip with him and lied about meals like pasta pesto and a Bolognese – which the employee insisted were for just for him.
Following an investigation, the senior analyst was fired – however, he rebutted and sued his former employer for wrongful termination. The tribunal ultimately sided with the bank, according to Metro, however it does raise questions for HR leaders around what is and what isn’t a justifiable business expense.
Fired over expenses?
Speaking to HRD, Mike MacLellan, partner at CCPartners, says the first step here is taking due diligence.
“You need to approach the employee submitting the expenses, ask for receipts that they haven't provided to the employer and ask for an explanation,” he says. “If the receipts don't look like they're work-related, then ask the questions: ‘What is this receipt for? Why are you submitting a receipt for two meals?’ Maybe there's a reasonable answer, such as they were treating a client or doing other business development opportunities.”
However, if there’s isn’t a reasonable explanation, then you might have to take the matter further. Context here is key, he says. As with most things in HR and employment law, everything needs to be assessed on a case by case basis – and being quick off the firing mark isn’t necessarily advisable.
“Anytime you're considering termination, you should think of it in the full and proper context,” says MacLellan. “And that would include how egregious the misconduct is.”
While all theft is theft, the amount can play a role in the severity of the punishment.
“Generally, theft is treated severely no matter what it is,” he says. “Employment law typically treats that as an act that irreparably damages the employment relationship. However, when it comes to submitting an expense, as opposed to theft of a product, you may not have just cause to say the employment relationship is forever damaged.”
That’s to say, for example, an employee expensed an extra $5 for a coffee. If they say that they’d left their personal credit card at home and just to deduct that from their next pay, that’s relatively minor and repairable.
“If it’s not an intentional and misleading theft, that should just be managed,” says MacLellan. “On the other hand, if the employee is expensing things that they clearly know are not appropriate – things that are purely personal and contrary to the employer’s policy and practices on expenses - then the employer may be in a position to terminate them on the spot.”
If an investigation is deemed necessary, HR needs to tread carefully. As most employees who are expensing items will tend to be of a more senior rank, HR leaders need to act with due diligence to remain unbiased.
Context key with expenses claims
“It depends on the circumstances if an employer decides to bring someone external to investigate,” says MacLellan. “It may be helpful to have someone internal gather the information and the employee’s explanation first.
“From there, if issues are so concerning that you need to bring in an auditor, for example, then certainly I would go external for that. Look for someone independent and impartial to do the appropriate fact finding and drawing the appropriate conclusions.”
The most important factor here is a preventative one – not curative, he says. The importance of having a concrete expenses policy and, essentially, ensuring that your employees are aware of it.
“The policy needs to, in so far as it can, set the company’s expectations,” he tells HRD. “That’s any rules and parameters around expenses. This should include things like what kinds of expenses an employee can submit and whether or not there’s any limits. It’s always a good idea to have workplace policies set out explicitly and brought to an employee's attention to be acknowledged by that employee.”
Because if you’re not clear on getting that employee’s acknowledgement, it could go against the organization if the matter ends up at a tribunal, says MacLellan.
“An employee may claim that they thought the expenses allowance was to get whatever they wanted. If that's not the case, or if there's any parameters or limits around proper expenses, that should be made clear.”