MT Expert - Legal: Ten ways to avoid expenses disputes

It's not just MPs who see expenses as a salary boost. So how do you stay out of trouble?

Last Updated: 31 Aug 2010

Duck islands, wisteria removal, helipads and moat-clearing... As well as offering a fascinating glimpse into our politicians’ domestic lifestyles, the MP claim-and-shame scandal catapulted the issue of expenses abuse into the media spotlight, writes Lewis Silkin's Richard Lister.

Away from the Westminster sleazebowl, HR professionals face perennial problems from staff making fictitious and inflated expenses claims. A survey last year by budget hoteliers Travelodge revealed that British workers fleece their bosses to the tune of more than £1bn a year through spurious swindle sheets.  A smug 43% of those polled believed it to be a legitimate way of making extra cash, while an astonishing 84% didn’t feel guilty about inventing claims.

So here are ten tips to help you tackle this thorny issue:

1. Make sure you have a clear expenses policy and apply it firmly and consistently. Sounds  straightforward enough, but it’s a holy grail that’s eluded the House of Commons.

2. Specify that only claims for ‘legitimate business use’ will be reimbursed.

3. Have a strict requirement that all claims must be supported by valid documentary proof.

4. Consider setting a limit, above which expenditure needs prior approval.

5. Spell out types of claims that are unauthorised.  The ‘adult’ films famously ogled by Jacqui Smith’s husband, for instance.  Cost aside, the last thing you need is discrimination and harassment claims triggered by a ‘boys’ club’ culture of entertaining clients at lap-dancing clubs and so on.

6. If suspicious claims come to light, conduct a full investigation to determine whether disciplinary action is necessary. 

7. Minor or inadvertent breaches of the expenses policy should generally attract a lenient sanction – at least for a first offence.

8. In contrast claims that are blatantly exaggerated or dishonest will normally warrant summary dismissal for gross misconduct.

9. Where appropriate, involve the police and any relevant regulatory body.

10. It’s probably OK to make a deduction from wages to recover overpaid expenses – but best play safe and include a specific right to do so in the employment contract.

Just a few little hints for refining your fiddle schtick...

Richard Lister is an employment lawyer at Lewis Silkin LLP.

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