Fraudulent expenses Submitting false claims can get you fired

Have the headlines about the Ontario Lottery and Gaming Corp. expense scandal got you nervous? Wondering if maybe you stretched the envelope a little too much with that last expense report?

It’s clear out-and-out fraud will always be just cause for termination of employment. If you intentionally submit an expense for money you didn’t spend to pad your wallet and get caught, you’re out. No severance.

If you took your spouse out for a nice dinner and claimed it as an expense by saying there were clients present who were being entertained, you’re gone. If you claim mileage you did not incur, and I don’t mean just a bit of exaggeration of the distances involved, you have printed your own one-way ticket to unemployment.

But what about the situation where there’s no fraud but you’re submitting expenses not allowed by company policy? What if company policy says entertainment expenses cannot include alcohol costs, but you put the whole bill in anyway? It gets paid because the receipt doesn’t show how much was paid for alcohol.

The employer in this situation will not likely have just cause. If they give the employee a clear warning in writing about how expenses should be submitted and caution them that a repeat incident will lead to termination, that would make things different. If the employee, having been clearly warned he was in violation and told his job was in danger if the behaviour repeated itself still claims for alcohol, he can likely be terminated without any severance. Telling a judge it was an innocent error and he just forgot to separate out the alcohol will likely not fly.

In many companies, there are no clear written rules about expenses. The reality is you can write an expense policy five pages long and there would still be some circumstances in which it would not be clear whether the expense should be covered. To be fair, if you are open and honest in your expenses and explain exactly what they were for, if the boss decides to write the cheque, who are you to second-guess them?

Reports indicate the OLG employees may not have been given a clear policy on what expenses were appropriate.

When you see a headline about a $3,000 dinner, it looks exorbitant until you find out 20 people were there. Theoretically, the government created the Ontario Lottery and Gaming Corp. as an independent organization because it was supposed to run its own profit centre. Every other area of private enterprise recognizes entertainment costs are part of doing business; why would it not be an important part of making the business wheels turn for the OLG?

The irony, I suspect, is many people who complain about entertainment costs for employees are not so outraged when they have been a beneficiary. They were happy to be taken out for lunch or dinner or to attend a free lavish Christmas party. But because OLG employees are viewed as working for “us,” the taxpayers, their life should be spartan and austere. Team-building socials should not occur.

I am not defending some of these expenses. It may be some were inappropriate and would not be tolerated in the private sector. What I do know is this: When the press reports that $7.20 was spent on doughnuts for a meeting, you know it was a slow news day.

Every employee in the private sector in this province would expect his employer to cover the cost of a back rest if it made his working environment ergonomically healthy. But employees working for an organization established by the government should, apparently, pay for it out of their own pocket.

Whether these kind of expenses are appropriate in a Crown corporation is a political issue. What I do know is, from a legal perspective, it’s up to employers to set the rules. If employers don’t set clear rules and/or they sign off on the expense report, don’t blame the employees.

Acceptable expenses are established by written policies or corporate culture. The employer is in charge of both.

Excerpt from the Hamilton Spectator