Managing Employee Expenses

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By Joanna Knoth, Senior Associate and Lauren Wright, Law Clerk

Along with the Christmas party, client lunches and the office secret Santa, the festive season may bring a significant increase in employee expense claims.

Employers should ensure that employees understand:

  • when it is appropriate to incur a work-related expense;
  • how the expense will be reimbursed; and
  • how unauthorised expenses will be dealt with.

In the decision of the Applicant v Microsoft Australia Pty Ltd,[1] the Fair Work Commission considered whether the dismissal of a Senior Engineer, for improper use of the company credit card, was unfair.

The employee was summarily dismissed. In addition to improper use of the credit card, Microsoft alleged the employee demonstrated a lack of candour and a failure to co-operate during the investigation.

The employee had developed a practice of using his company card for both personal and corporate expenses, in breach of Microsoft’s procedures. He would then remove the personal transactions from his reimbursement form. However, he failed to remove some personal travel expenses from the reimbursement form on multiple occasions.

The Commission found there was a valid reason for dismissal. However, the Commissioner held the summary dismissal of the employee was harsh. Accordingly, the dismissal was held to be unfair and Microsoft was ordered to pay the employee compensation.

Employers should implement policies and procedures regarding expenses, that clearly set out:

  • when an expense will be a work-related expense, and therefore reimbursable;
  • when it is appropriate for an employee to incur a work-related expense;
  • whether the employee needs to obtain approval from the employer, prior to incurring an expense;
  • whether there is any cap on expenses incurred;
  • what evidence the employee needs to provide for reimbursement (for example, a valid receipt);
  • the process for reimbursement; and
  • the consequences of non-compliance with the employer’s policies and procedures.

Any policies and procedures should be clearly communicated to employees, and easily available for review.

Any serious breach of any policies or procedures should be promptly investigated. Employers should consider seeking legal advice prior to terminating an employee.

This marks day ten of MDC Legal’s 12 days of Christmas, addressing a variety of workplace issues that may arise during festive season.

MDC Legal are employment law specialists assisting employees, employers and industrial organisations – giving us a unique and comprehensive insight into employment law issues.

[1] Applicant v Microsoft Australia Pty Ltd [2012] FWA 3353.