Employees who handle related expenses such as procurement, travel, hospitality, etc., need to apply for reimbursement from the enterprise on a regular basis, and the financial department will review the reimbursement content and related documents.
However, for the authenticity of the reimbursement documents, some enterprises do not have strict financial audits, and even many companies do not review them based on human feelings, and only afterwards do they find that there is a problem with the invoice.
In the case shared today, the company found that the employee was falsely reimbursed, and terminated the labor contract with the employee, but in the labor arbitration applied by the employee, the arbitration committee ruled that the employee should pay 470,000 yuan! Fortunately, the company's employee handbook was clearly stipulated, and the relevant evidence was retained, and finally the payment of 470,000 compensation was successfully avoided.
The act of reimbursing employees with false bills will not only damage the company's property rights and interests, undermine the company's financial management system, but also make the company face greater tax risks. As a result, companies often terminate labor relationships on the grounds that employees violate rules and regulations.
However, in practice, there are different determinations as to whether the company should pay compensation to the employee for the illegal termination of the labor contract, for example, in this case, the arbitration commission ruled that the company should pay compensation, and the court held that "no compensation is required".
Combined with this case, this article will analyze the key factors that the court found that the company terminated the contract with false reimbursement of employees, and made suggestions for the follow-up management of the enterprise in this case, with a view to enlightening and helping the enterprise.
Review of the facts of the case
Let's first review the process of the key facts in this case:
Then again, how did Company A find out about Tan's disciplinary behavior in expense reimbursement?
In the course of the annual internal audit in 2019, Company A found through the system that the reimbursement expenses of the Guangzhou team's business hospitality expenses were significantly higher than those in Beijing and Shanghai.
After careful investigation, Company A found that Tan someone was on a business trip in Shanghai, but the receipt was displayed in Guangzhou to entertain customers; some of the small ticket styles were obviously not the usual style of small tickets in the catering industry; the contact numbers left by different catering enterprises on the invoices were actually the same...
Accordingly, on August 31, 2020, Company A issued a Notice of Termination of Labor Contract to Mr. Tan. Tan mou did not recognize the company's unilateral termination of the contract and did not pay compensation, and applied for labor arbitration. The arbitration commission held that the company's termination was illegal, and it should pay Tan an economic compensation of 476,416.5 yuan for the illegal termination of the labor relationship.
This time the company feels even more depressed! The lawsuit was then filed with the court.
Fortunately, Company A relied on the clear provisions in the employee handbook and was able to add relevant evidence, and obtained the support of the judge, ruling that the company was legal and did not need to pay compensation to Tan.
Why did the court make a decision contrary to that of the Arbitration Commission?
1. The Employee Handbook on which Company A unilaterally terminates the labor contract meets the requirements of the entity and procedure and is legal and valid:
The court held that the labor contract signed by the two parties clearly stipulated that the Employee Handbook belonged to the rules and regulations of the plaintiff, was an inseparable part of the labor contract, and was the basis for personnel management and rewards and punishments for employees.
The evidence submitted by Company A is sufficient to prove that the Employee Handbook it has formulated meets the procedural requirements of Article 4 of the Employment Contract Law, that is, it is discussed by the employee congress or all employees.
(Source: China Judgment Documents Network)
Secondly, Company A identified the act of falsely reporting the amount of expenses exceeding 500 yuan in the Employee Handbook as a serious violation of labor discipline and did not violate the mandatory provisions of laws and administrative regulations.
In the case of meeting the relevant procedural requirements, it may be used as the basis for the plaintiff's personnel management and rewards and punishments.
2. Secondly, whether an employee has a disciplinary violation of falsely reporting business entertainment expenses depends on two factors:
(1) Whether there is a real business reception
In this case, the receipt submitted by Tan was not true, and other evidence could not be submitted to support the actual occurrence of business entertainment expenses, and it should be determined that there was no real business entertainment.
(2) Whether the amount reimbursed exceeds the amount of the actual expense
According to the evidence submitted by Company A, Tan applied for reimbursement of business hospitality expenses on August 16, 2018 and August 16, 2019, and it was found that Tan did travel in Shanghai at that time, but submitted a small ticket for business entertainment in Guangzhou at that time for reimbursement, which was not feasible in time and space, and could be found to be false reimbursement.
For several other business entertainment expenses, Tan also failed to provide evidence to make a reasonable explanation.
Therefore, the court found that Tan had falsely reported business entertainment expenses of more than 500 yuan, which seriously violated labor discipline. The termination of the labor contract by Company A in accordance with the Labor Contract and the Employee Handbook complies with the relevant provisions of the Labor Contract Law and is not an illegal termination of the labor contract.
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What can businesses learn?
1. Standardize the reimbursement process
Establish a sound reimbursement application and approval system, and introduce an electronic system to online the daily review of reimbursement.
For example, employees can be required to sign the front or back of the voucher provided with a large amount of money when making reimbursement, so as to avoid the situation that the employee later denies that it is a ticket submitted by himself.
2. Improve clear rules and regulations
The basis of the system is an important factor in determining whether the termination act is legal, and its formulation must meet the requirements of the entity and procedure, which is also the key to the employee handbook of Company A being considered legal and valid.
Secondly, it is recommended that enterprises adopt the method of "enumeration + summary" for serious disciplinary violations in the rules and regulations.
That is to say, in addition to including common situations such as fictitious reimbursement facts and knowing that the bills are falsely applied for reimbursement, the principle of good faith based on the court in this case can be introduced into the rules and regulations to ensure that when employees violate discipline, there are rules to follow.
3. Timely handling and paying attention to evidence collection
In practice, some regions believe that the termination of a labor contract with serious violations of discipline should be carried out within 6 months from the date on which the employee knew or should have known that the employee had violated discipline, such as the Detailed Rules for the Implementation of Several Issues Concerning the Implementation of the Labor Contract Law in Tianjin.
Therefore, it is recommended that once the enterprise discovers that there is a false reimbursement behavior of employees, it should promptly investigate, collect, and fix the evidence, and make a corresponding penalty decision within a reasonable period of time.
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