China – False Reimbursement-The Enlightenment That The Company Should Gain From Losing The Lawsuit.

False reimbursement of employees is an act that violates the principle of good faith, and is an act that defrauds the company and harms the company's interests. Therefore, many companies choose to terminate the labor contract with employees on the grounds that the false reimbursement seriously violates the company's rules and regulations. However, we found that in practice, there are still many cases where the company loses the lawsuit. Despite the false reimbursement of employees, the company is still deemed to be illegally dismissed and needs to pay illegal dismissal compensation.

 

We focused on the analysis of some companies that used false reimbursement as the grounds to terminate labor contracts, and to a certain extent proved the employees’ false reimbursement behavior, but the company still lost the lawsuit. Investigate and deal with the compliance recommendations for false reimbursement of employees after the event.
 

Reason 1: The employee's false reimbursement does not of course constitute a serious violation of the company’s rules and regulations

 

False reimbursement includes many situations. It can be the submission of false supporting documents (usually invoices) for reimbursement. It can also be that the employee forges a basic fact or the supporting document is inconsistent with the basic facts. Reimbursement of travel expenses to a certain place is considered false reimbursement.

 

However, in practice, many companies have not made detailed regulations on false reimbursements in their rules and regulations. In some cases, the judge believed that employees did false reimbursement, but it did not constitute a serious violation of the company’s rules and regulations. The company directly terminated the labor contract on the grounds of false reimbursement. Moreover, there may be some reimbursement practices within the company. For example, the basic facts that allow employees to reimburse are inconsistent with supporting documents. The company has approved this practice, and then advocates false reimbursement of employees, which seriously violates the company’s rules and regulations. The risk of losing the case. In other words, if the company does not make detailed provisions on false reimbursement in its rules and regulations, employees have certain rights to interpret their false reimbursement behavior. For example, in one case, employees submitted serial invoices as reimbursement documents. , But the explanation was that the company's finances accepted the supplementary vote, and the judge believed that the explanation was reasonable. In another case, the employee claimed that the amount of the reimbursement included some taxi-hailing expenses for the customer rather than his own consumption. However, considering the nature and characteristics of his sales manager's position, the judge did not believe that it constituted a serious violation of the company's rules and regulations.

 

Reason 2: The company has the right to approve employee reimbursement

 

    Companies generally have the financial department approve an employee’s reimbursement application, and some companies even require that the reimbursement application be approved by the employee’s leadership and signed for confirmation. After the audit, the company discovered the false reimbursement of employees. The company approved the employee’s reimbursement application and paid the reimbursement to the employee, only to discover that the reimbursement was false, possibly because the invoice was false, or after further investigation on the consumption situation, it was found that there was no real consumption at all. Can the company still use the completed reimbursement as a false penalty to employees? There is no uniform conclusion in judicial practice. However, we found through some cases where the company lost the lawsuit, the company did not raise objections on some issues and rejected the employee’s reimbursement application when approving the reimbursement, or had communicated with the employee about the suspicious points, or had not been able to do so for a long time after completing the reimbursement. In these cases, the company has a certain risk of losing the lawsuit. The judge may think that the company has exercised the right of approval and approved and completed the reimbursement. Even if the employee constitutes a false reimbursement, the company cannot terminate the labor contract on this ground.

 

Reason 3: For false reimbursement, the company bears a heavier burden of proof

 

In cases of false reimbursement, the company usually bears a heavier burden of proof to prove the employee’s false reimbursement behavior. In practice, how the company fixes the evidence and forms a complete evidence chain is a challenge for the company. The financial department may find that there are many doubts about employee reimbursements, such as invoices that have been verified as false invoices, reimbursement of serial invoices, overlap of consumption time, etc., and believe that the problem of false reimbursement is already obvious, and the company directly informs employees of the labor contract on the grounds of false reimbursement. Lifted. In practice, some judges believe that these doubts are not sufficient as evidence to prove the fact of false reimbursement, and the company must provide further evidence.

 

How should the company provide further evidence? In practice, some companies hire third-party accounting firms or investigative companies to conduct further investigations, including visits to consumer sites, interviews with merchants, etc., and finally form third-party investigation reports, which are submitted as evidence in arbitration or litigation. However, the company may not have anticipated that, in practice, the evidence of third-party investigation reports is not strong. The third-party investigation reports are actually indirect evidence. The arbitrators or judges may not accept or incompletely adopt the contents of the third-party investigation reports. As a result, the company lost the case due to insufficient evidence.

 

The lawyer recommends:

 

From the false reimbursement cases in which these companies lost the lawsuit, the company should learn from experience and lessons, and make some improvements in the system and investigation and evidence collection methods to reduce the risk of losing the false reimbursement arbitration or litigation in the future. Based on the case study, we give the following suggestions:

 

1. The company should further improve the provisions on false reimbursement in its rules and regulations. The company's rules and regulations should not only clarify the various situations of false reimbursement, but also the disciplinary consequences of false reimbursement. In addition, the company's rules and regulations can also clarify the scope of the company's reimbursement review. Even if the employee's reimbursement is approved, the company still has the right to follow up and re-check the employee's reimbursement behavior afterwards, and has the right to determine the corresponding disciplinary sanctions. This is not only to prepare for labor disputes that may occur in the future, but also to prevent in advance. Many employees may not yet have sufficient awareness of compliance. If the company’s rules and regulations have detailed provisions on false reimbursements so that employees can know in advance which circumstances are false reimbursements and violations, the occurrence of false reimbursements can be directly reduced. The company can also popularize false reimbursement regulations to employees through compliance training and obtain a letter of commitment signed by employees.
    

2. The company shall obtain direct evidence during the investigation and evidence collection. Whether the company commissions a lawyer or a third-party investigating company to go to the scene to collect evidence, the evidence obtained should be direct photos, conversation recordings, etc. The company can also choose notarization to fix the evidence. Of course, the scope of the investigation and evidence collection by companies or lawyers is limited. In addition to obtaining direct evidence as much as possible, further evidence can also be obtained through reporting or judicial evidence collection. In addition, after the company has verified the false reimbursement of employees to a certain extent, talking with employees is also a very important way of obtaining evidence. Regarding the unreasonable part of the reimbursement, employees are required to explain. On the one hand, it is to give employees a chance to defend and understand their possible defense strategies in advance. On the other hand, employees may admit false reimbursement facts or reflect their subjective fraud in their conversations.