Reclaiming expenses from an outgoing employee
Discussion
Got an employee who finished last week. He is owed 1 weeks wages and holiday pay which will be paid to him at end of month.
Checking through credit card transactions today it is apparent that he has been making several unauthorised expenses every month which had not been brought to my attention. Company credit card issued to employees only for business fuel and other misc business expenses.
Seems he's bought meals out at weekends, footwear, copious amounts of private fuel at weekends, occasional grocery shopping, McDonalds, snacks and lunches while filling up with fuel.
Can I just deduct these expense from final pay packet. All of these purchases were unauthorised.
TIA
Checking through credit card transactions today it is apparent that he has been making several unauthorised expenses every month which had not been brought to my attention. Company credit card issued to employees only for business fuel and other misc business expenses.
Seems he's bought meals out at weekends, footwear, copious amounts of private fuel at weekends, occasional grocery shopping, McDonalds, snacks and lunches while filling up with fuel.
Can I just deduct these expense from final pay packet. All of these purchases were unauthorised.
TIA
I think strictly it depends on the contract of employment and what that allows. When I last had an employment contract there was a clause covering recoveries of overpayments (slightly different from this circumstance as we had to use our own cards and claim money back), but the same principle.
In any case, I'd have a word and see what he proposes.
The alternative surely is that the employee can explain these transactions to the police and the magistrates instead?
In any case, I'd have a word and see what he proposes.
The alternative surely is that the employee can explain these transactions to the police and the magistrates instead?
There is nothing in the contract about clawing back expenses as these expenses should never have been made in the first place. 2 examples in the last month. Footwear £112, Meal for two at weekend £76, private fuel at weekends £140.
Just want to see if I can legitimately deduct these from wages as these were personal expenses NOT business.
Just want to see if I can legitimately deduct these from wages as these were personal expenses NOT business.
He left last week but we still owe him for last weeks work and holiday pay.
The unauthorised amounts span a 12 month period so can't get him to clear the balance as such. Thinking that I contact him with the amount owed and get him to accept in writing that he is happy for the amount to be deducted or we take the legal route?
The unauthorised amounts span a 12 month period so can't get him to clear the balance as such. Thinking that I contact him with the amount owed and get him to accept in writing that he is happy for the amount to be deducted or we take the legal route?
Fugawi said:
There is nothing in the contract about clawing back expenses as these expenses should never have been made in the first place. 2 examples in the last month. Footwear £112, Meal for two at weekend £76, private fuel at weekends £140.
Just want to see if I can legitimately deduct these from wages as these were personal expenses NOT business.
Straightforward fraud is it not?Just want to see if I can legitimately deduct these from wages as these were personal expenses NOT business.
Probably best to understand how long you can legally withhold his money for to start with & then go from there. Take advice as to whether you can legally offset one against the other.
In the meantime produce an itemised list of the unauthorised expenditure, & then , once you know the position above, send it to him & ask him for his proposal to repay the sums involved. Failure to respond within 7 days makes it a police matter & sees him in the small claims court (Money claim service now) as a minimum.
….and then give your book keeper a b
king for allowing this to slip through the net & tighten up expense claim processes! Who signed his claims off? When I had a company credit cards we still used to have to fill out a claim form to itemise the expenditure.....Every time I've had a company credit card in the UK, and that a lot over the last 45 years I've had to sign an agreement for the card, not in a Contract of Employment, which included a recovery clause and a disciplinary procedure for unauthorized use.
I've run several payrolls for UK groups over the years, I'd deduct it and pay it back if an issue, I don't believe the police would pursue you for deducting it and it would only be an issue if you failed to 'repay' him if demanded, your overthinking it.
I've run several payrolls for UK groups over the years, I'd deduct it and pay it back if an issue, I don't believe the police would pursue you for deducting it and it would only be an issue if you failed to 'repay' him if demanded, your overthinking it.
Berw said:
Every time I've had a company credit card in the UK, and that a lot over the last 45 years I've had to sign an agreement for the card, not in a Contract of Employment, which included a recovery clause and a disciplinary procedure for unauthorized use.
Yep - we have the same.Berw said:
I've run several payrolls for UK groups over the years, I'd deduct it and pay it back if an issue, I don't believe the police would pursue you for deducting it and it would only be an issue if you failed to 'repay' him if demanded, your overthinking it.
If it’s not written into the Contract of Employment or in the Credit card Policy then potentially it’s an illegal deduction of wages and an Employment Tribunal. That’s also what I would do but HR hate Employment Tribunals as it means they have to do some work. 
OP - how come nobody checked what he was using his card for? Either his line manager or somebody in the expenses team should have been checking (or at least spot checking) to make sure everything was above board?
Wombat3 and Berw - I like both posts and given me a bit of fire in my belly.
Countdown - Relatively small company and clearly the trust issues you develop have been abused. Lady in accounts has been asking for receipts for various transactions but when these are not forthcoming the individual has been 'making up' reasons for the purchases.
I'm a busy person and I think she's just swept it under the carpet without wanting to bother me, which I'm equally p****d off about as she's the one letting the money trickle out.
Janesmith1950 - Won't be letting it go, it's a 4 figure sum! However will be tightening up in the future. All other employees seem to tow the line with no issues.
Countdown - Relatively small company and clearly the trust issues you develop have been abused. Lady in accounts has been asking for receipts for various transactions but when these are not forthcoming the individual has been 'making up' reasons for the purchases.
I'm a busy person and I think she's just swept it under the carpet without wanting to bother me, which I'm equally p****d off about as she's the one letting the money trickle out.
Janesmith1950 - Won't be letting it go, it's a 4 figure sum! However will be tightening up in the future. All other employees seem to tow the line with no issues.
Fugawi said:
Wombat3 and Berw - I like both posts and given me a bit of fire in my belly.
Countdown - Relatively small company and clearly the trust issues you develop have been abused. Lady in accounts has been asking for receipts for various transactions but when these are not forthcoming the individual has been 'making up' reasons for the purchases.
I'm a busy person and I think she's just swept it under the carpet without wanting to bother me, which I'm equally p****d off about as she's the one letting the money trickle out.
Janesmith1950 - Won't be letting it go, it's a 4 figure sum! However will be tightening up in the future. All other employees seem to tow the line with no issues.
Work out how many man hours it will take to follow it through, and cost it. Times this by the chances of having to deal with ACAS and/or a beach of contract claim in the small claims court or employment claim at tribunal.Countdown - Relatively small company and clearly the trust issues you develop have been abused. Lady in accounts has been asking for receipts for various transactions but when these are not forthcoming the individual has been 'making up' reasons for the purchases.
I'm a busy person and I think she's just swept it under the carpet without wanting to bother me, which I'm equally p****d off about as she's the one letting the money trickle out.
Janesmith1950 - Won't be letting it go, it's a 4 figure sum! However will be tightening up in the future. All other employees seem to tow the line with no issues.
You are in business. Your aim is to make money. Pursuing a course of action on principle that has a high likelihood of costing more than it recovers is poor business.
I'm not condoning the employee, by the way, however you must also ask why it has taken you a year to realise this has gone on?
The people encouraging you to do this, that and the other have no skin in your game and it's easy for them to suggest actions that will not cost them time and money.
janesmith1950 said:
Work out how many man hours it will take to follow it through, and cost it. Times this by the chances of having to deal with ACAS and/or a beach of contract claim in the small claims court or employment claim at tribunal.
You are in business. Your aim is to make money. Pursuing a course of action on principle that has a high likelihood of costing more than it recovers is poor business.
I'm not condoning the employee, by the way, however you must also ask why it has taken you a year to realise this has gone on?
The people encouraging you to do this, that and the other have no skin in your game and it's easy for them to suggest actions that will not cost them time and money.
I ran my own business for 23 years. There’s no way I’d have let an employee get away with that. I spent many hours successfully pursuing an ex employee who stole our data. I’m very glad I did partly as it shows others that they won’t get away with it.You are in business. Your aim is to make money. Pursuing a course of action on principle that has a high likelihood of costing more than it recovers is poor business.
I'm not condoning the employee, by the way, however you must also ask why it has taken you a year to realise this has gone on?
The people encouraging you to do this, that and the other have no skin in your game and it's easy for them to suggest actions that will not cost them time and money.
Is there enough owing to him to subtract a 4 figure sum?
Legally I don’t think you’re allowed to deduct from his wages without permission. I think I’d set out in writing all the unauthorised items/payments (are they unauthorised in as much as expenses are usually authorised monthly. Could your paying them be seen as such?).
Then I’d set how much he is owed and get to a net figure. Say you consider one or two misuses an oversight but regular misuse amounts to fraud. You preference is not to involve the police and that as a final resolution we would like to settle at £Xxx. Please confirm in writing ASAP.
If you get no response I’d just pay him the net figure he’s very unlikely to pursue it with an implied threat of a police report.
Legally I don’t think you’re allowed to deduct from his wages without permission. I think I’d set out in writing all the unauthorised items/payments (are they unauthorised in as much as expenses are usually authorised monthly. Could your paying them be seen as such?).
Then I’d set how much he is owed and get to a net figure. Say you consider one or two misuses an oversight but regular misuse amounts to fraud. You preference is not to involve the police and that as a final resolution we would like to settle at £Xxx. Please confirm in writing ASAP.
If you get no response I’d just pay him the net figure he’s very unlikely to pursue it with an implied threat of a police report.
elanfan said:
Is there enough owing to him to subtract a 4 figure sum?
Legally I don’t think you’re allowed to deduct from his wages without permission. I think I’d set out in writing all the unauthorised items/payments (are they unauthorised in as much as expenses are usually authorised monthly. Could your paying them be seen as such?).
Then I’d set how much he is owed and get to a net figure. Say you consider one or two misuses an oversight but regular misuse amounts to fraud. You preference is not to involve the police and that as a final resolution we would like to settle at £Xxx. Please confirm in writing ASAP.
If you get no response I’d just pay him the net figure he’s very unlikely to pursue it with an implied threat of a police report.
That’s also what I would do. Legally I don’t think you’re allowed to deduct from his wages without permission. I think I’d set out in writing all the unauthorised items/payments (are they unauthorised in as much as expenses are usually authorised monthly. Could your paying them be seen as such?).
Then I’d set how much he is owed and get to a net figure. Say you consider one or two misuses an oversight but regular misuse amounts to fraud. You preference is not to involve the police and that as a final resolution we would like to settle at £Xxx. Please confirm in writing ASAP.
If you get no response I’d just pay him the net figure he’s very unlikely to pursue it with an implied threat of a police report.
I'm no employment lawyer but I would invite him in for a debrief meeting.
In that meeting, say you've found these credit card transactions (Print them out and highlight).
And explain that here is how much is owed and here is how much he is due to be paid.
Then offer him the chance to pay/deduct whatever and you will not mention it moving forwards.
If he refuses then I would explain you would be going through the relevant channels within the legal system to reclaim the money.
In that meeting, say you've found these credit card transactions (Print them out and highlight).
And explain that here is how much is owed and here is how much he is due to be paid.
Then offer him the chance to pay/deduct whatever and you will not mention it moving forwards.
If he refuses then I would explain you would be going through the relevant channels within the legal system to reclaim the money.
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