Fishy expense claims end career

This article was originally published by The Hamilton Spectator.

When a relationship sours, employers start taking a closer look and things get bad quickly, writes Ed Canning.

Neil had worked in the auto dealership industry for two decades by the time he became the president of operations of a company that ran five dealerships in British Columbia. Neil had a knack for boosting sales and the employer was pleased with his performance. What they ended up not being pleased with was Neil's relationship with the truth.

About two years into Neil's tenure in the position, he submitted an expense for a dinner that included some staff and the employer balked. One of the owners had been at the dinner and did not in any way consider it to be a staff-related expense. She not only refused to reimburse Neil for the dinner he had bought everyone, she began to re-examine his recent expenses.

Let me pause to note that in my experience this is always how it starts; the employee does something objectionable or fishy and the employer starts to sniff around to see what's what.

The owner soon found there were at least three restaurant expenses that had a bad aroma to them. It was the employer's policy that if you wanted to be reimbursed for an entertainment expense you had to list the clients or staff who were entertained. On all three of these occasions the staff had apparently enjoyed a meal they never ate. To make matters worse and assure his prompt termination, when Neil was confronted with the fraudulent expenses he doubled down and insisted the staff members were present for the meals. In fact, the only person present was Neil's wife. After a brief suspension Neil got a letter that stated "Further to our discussion today, this letter confirms the decision to end your employment effective immediately. We have become aware of numerous instances of fraudulent and improper conduct relating to expense claims made by you during your employment. When questioned about these irregularities, you were unable to provide a reasonable explanation. As President of Operations you are expected to exercise good judgement and uphold the trust inherent in your management and fiduciary position. We consider your conduct to be a fundamental breach of your obligations to the employer which has caused us to lose trust and faith in you."

Ultimately, the judge decided that even though the fraudulent expenses only totalled $250, given Neil's position within the organization the employer had just cause to terminate him without notice or pay in lieu of notice. Neil was in the most senior management position with the organization. He had a high level of authority, responsibility and trust. He made matters worse by lying to the owner's face. Neil gave up a job that paid him around $200,000 a year for $250 worth of fraudulent expenses. Of course, those were the only ones the employer could prove were false. Who knows how many other such expenses were submitted.

Neil's sad tale is one I have seen before. An employee spends years skirting around the edges of truth with respect to expense claims thinking no one will ever notice. When the relationship sours, however, employers start taking a closer look and things get bad quickly.

Ed Canning practises employment and human rights law with Ross & McBride LLP, in Hamilton, representing both employers and employees. Email him at

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Ed Canning
Ed Canning
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