Implications for employers of the current expenses crisis in Parliament
Stories in the press recently which have exposed allegedly
extravagant expenses claims made by MPs should focus the minds of
employers on their own organisation's expenses policy and
practices.
Expenses policies should be drafted very clearly, setting out
the limits of an employee's authority to spend, and when/if
specific authority for expenditure should be sought in advance.
Such a policy will usually include details of a specified form to
use to claim reimbursement, and state that only reasonable and
legitimate expenses incurred will be reimbursed, often then going
on to set out what the organisation will consider to be
reasonable.
Common provisions will include time limits for submitting
claims, maximum spend provisions for hotel accommodation and meal
allowances, details of what will be sanctioned for the
entertainment of clients, for motoring and other travel costs, and
the need to provide VAT receipts or other supporting documents.
Employers should ensure that expenses claims are checked when
they are submitted as a matter of routine. If expenses claims go
unchecked, it will be more difficult to obtain evidence from the
employee or to take disciplinary action further down the line. If
an employee has been accidentally overpaid, those overpaid expenses
can usually be deducted from the employee's salary by virtue of
section 14 of the Employment Rights Act 1996, and employers often
include a specific clause in the employment contract allowing such
deductions. If a mistake comes to light only after an employee has
left the organisation, the employer could potentially try to claim
the money back from the employee through a restitution claim.
However, unless the sums involved are very large, the legal costs
involved in litigation will make this a pointless exercise.
Employers should always check there are no expense claims issues
outstanding on termination of employment before making a final
salary payment.
If an employer suspects that the employee has submitted a
dishonest claim, there should be a disciplinary investigation to
discover the facts and whether there is a case to answer at a
disciplinary hearing. Where misconduct is made out, any sanction
imposed should reflect the seriousness of the offence. Minor
breaches of expenses policies may only require a chat between
employee and manager, whereas deliberate fraud could merit summary
dismissal for gross misconduct. In certain cases, particularly
large-scale fraud, the employer should also consider criminal
proceedings.
Finally, bear in mind how the issue came to light? If another
employee made a "public interest disclosure", also known as
whistleblowing about a dishonest colleague, then they may have
legal protection from reprisal. Employees who have blown the
whistle may fear ostracism, criticism, poor appraisals,
victimisation or even dismissal. The Employment Rights Act contains
provisions which give specific protection to workers who disclose
information about an alleged wrongdoing in the workplace.
By Emily Cox, Solicitor, Employment Team, Dickinson Dees
LLP