And There’s The Rub – Expense Claims, Serious Misconduct and Termination of Employment

October, 2015

By Clayton Payne, Special Counsel

If a worker claims work-related expenses, which are not legitimate, can this automatically provide grounds for an employer to terminate the employment for serious misconduct?

This matter was recently considered by the Fair Work Commission.

The Facts

In the recent decision in Mohaptra v. Acciona Energy, the worker claimed that he had been unfairly dismissed without notice, for serious misconduct. This dismissal occurred after it was alleged that he had claimed, among other things, 14 massage sessions as a business expense on the pretence that they were for lunches.

The worker was initially stood down with pay when the allegations came to the notice of the employer. The worker was given an opportunity to respond to the written allegations through his lawyer. After a meeting with the worker, a further response was requested by the employer. The requested response was also provided by the worker’s lawyer.

The employer considered the response but ultimately decided to terminate the worker’s employment at a subsequent meeting.

The employer contended that the worker had purchased non-business related items (i.e. massage sessions) using a company credit card, and deliberately attempted to cover up the purchases. It was alleged that the worker had misrepresented the expenses as meals he had purchased while travelling for work.

The main issues in contention included whether there was a valid reason for termination and whether or not a summary termination of employment was a disproportionate response to the alleged conduct.

The employer had policies in place to deal with travel expenses and credit card usage. The worker was familiar with both policies.

The worker was found to have purchased a number of items on the company credit card and claimed reimbursement for these items as meals consumed. These included not only the 14 massage sessions but clothing, a heater, vitamins and a back pack, among other things.

It was also claimed by the employer that at times the worker did not submit documentation to substantiate his expense claims properly. He often folded the merchant’s receipt under the credit card chit so that there was no visible record of the item purchased.

Commissioner Roe found:

“(The worker) says that the fact that this item was approved (i.e. a previous doctor’s visit that he claimed as “staff amenities”) encouraged him to believe that his subsequent massage claims would be alright. I accept that (the worker) may have been working hard and may have been tired and in need of a massage. However, this does not make the 14 massages reasonable business expenses”.

The Commissioner ultimately found that the worker’s conduct in relation to the expense claims amounted to serious misconduct and a valid reason for termination without notice. He also found that the worker’s dismissal was not unfair.

Conclusion

In this case, one factor that assisted the employer in its defence was the fact that it had clear policies in place dealing with expense claims, of which the worker was familiar.

Had the employer not had such policies in place, then the result in this matter might have been different.

It was also clear that the employer had a process in place to put the relevant allegations to the worker and allow him an opportunity to respond before taking any action.

In addition, employers should be careful to administer such policies on a consistent basis. If it is the case that one worker is shown largesse in relation to a policy breach, while another has their employment terminated, this may give grounds for that worker to successfully claim that their dismissal was unfair.

Contact Mills Oakley

For more information, please contact:

Ross Levin | Partner
Melbourne
T: +61 3 9605 0070
E: rlevin@millsoakley.com.au

Malcolm Davis | Partner
Sydney
T: +61 2 8035 7932
E: mdavis@millsoakley.com.au

Adam Lunn | Partner
Melbourne
T: +61 3 9605 0868
E: alunn@millsoakley.com.au

Lisa Anaf | Partner
Melbourne
T: +61 3 9605 0857
E: lanaf@millsoakley.com.au

 

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