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Expensive Exit

Well, Maria Miller has finally gone. Abusing the expenses system was bad enough. Offering the briefest apology in history was enough to light the media’s touch paper and the whole thing has been done to death in the past week.

Whatever your opinion of the matter, it does bring up the whole issue of expenses. What should an employer do if there is a discrepancy in the expenses? When is it fair to dismiss?

On most occasions if an employee is discovered after an investigation to be genuinely fiddling their expenses, it can be likened to theft (which it is),and it will often be fair to dismiss although you have to consider mitigating factors like length of service (five years+ is considered to be long and therefore loyal by the courts),the person’s record, track record, disciplinary record, contrition (if any is shown),health and anything else that an employment judge might think had a bearing. In the end though, it’s the company’s money which should not be taken dishonestly. Offering to pay it back may help an employee, but it depends if the employer’s trust in them has been inexorably broken.

But what about the grey areas? That’s what a lot of these political scandals are about, so how do they work in your business? A lot depends on how clear your expenses policy is. If you haven’t got one, get one and introduce it. John Timpson, head of Timpson’s the key cutters, engravers and shoe repairers, recently wrote in The Telegraph about an employee who had been putting the bill for entertaining clients at lap dancing clubs on his expenses (this occurred before the Bribery Act).

They dismissed him, and most of us would probably expect it to be a fair dismissal. There was no cause for him to be entertaining clients at such establishments, and it was wholly inappropriate to have done so. The evidence suggested it was more for his enjoyment than the clients’! Nevertheless the Tribunal decided it was an unfair dismissal, since the company expenses policy did not say anything in particular about entertaining clients at such places. It was an expensive mistake for Timpson’s.

With the Bribery Act in force, you could perhaps argue it as an implied term that clients should not be entertained in that way, but the lesson is that policies need to be clear. They should be equally clear about by when expenses need to be submitted. One of our clients recently said they received an expenses claim over a year old from one of their salesmen. The driving it related to was for a contract that had ended months ago, so our client couldn't charge their client for it. The trouble was their expenses policy didn't contain anything about time limits, so they had to pay their salesman the money this time. In response to that they introduced a policy with a deadline of the end of the month after the month in which the expense had been incurred. If the submission had not been made in that time it would not be accepted. This is perfectly fair because they carried out consultations with their workforce and allowed time for people to adjust.

The lesson to learn here is that in business, (unlike politics apparently),rules are rules and you’re expected to spell them out. Maria Miller tried to claim she had followed the rules but that wasn't enough. Mr Osborne forced her out of the Government for causing unpopularity. In business however, the contract and its supporting policies tend to be supreme. Employees have far more rights than politicians! If a company wants something to be the case, they need to write it down, agree it with the employees and get it signed.

Russell HR Consulting provides expert knowledge in HR solutions, employment law training and HR tools and resources to businesses across the UK.

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