Misuse of company card results in instant termination

Allowing employees access to company funds is a necessary part of business functions. However, where there is scope for employees to use company funds, there is also the potential for theft and fraud.

The recent decision of Sonia Love v DJP Asset Management Pty Ltd [2021] FWC 4788, demonstrates the importance for employers to regularly audit company cards. In this case, an employee was summarily dismissed after the employer identified the misuse of a company debit card as a result of an auditing process.

Facts

Ms Love was employed by DJP Asset Management Pty Ltd (DJP) and maintained the position of property manager. Ms Love was described as a very good property manager and had little performance issues across her employment with DJP.

In October 2020, DJP adopted a MyConnect card, which provided payment to a debit card for DJP’s successful referrals of the services provided by MyConnect. It was agreed that Ms Love would have possession of the DJP MyConnect debit card.

Ms Love claimed that Mr Kirby, the General Manager of DJP, had verbally told her to keep the MyConnect card and use it for when the team went out for coffee or lunches, but also that the funds could be used for her personal use. As advised, Ms Love used the card for coffees and lunches with clients and colleagues.

Upon the first audit of the MyConnect card, Mr Kirby identified transactions indicating Ms Love had used the funds for extraneous purposes. Specifically, she made large cash withdrawals from hotels from the MyConnect card which were determined to be for her own private use. Ms Love admitted to having used the card for personal use, treating the available funds like a ‘bonus’. It was DJP’s position that Ms Love had stolen from the company and accordingly there was no choice but to terminate her employment. Ms Love was dismissed without notice for serious misconduct.

Decision

DJP had less than 15 employees and was therefore considered a ‘small business’ for the purposes of the Fair Work Act 2009 (Cth). As such, the Commission needed to consider whether Ms Love’s dismissal was consistent with the Small Business Fair Dismissal Code (the Code).

The Code provides that it is fair for an employer to dismiss an employee without notice or warning when the employer “believes on reasonable grounds” that the employee’s conduct is sufficiently serious to justify immediate dismissal (we note that this is a different test for employers with 15 or more employees). Serious misconduct as defined by the Code includes theft.

Mr Kirby was adamant that he never authorised Ms Love to use the MyConnect card for personal use. He agreed that Ms Love was entitled to possess the debit card but was only authorised to use it for work-related activities. The Commission accepted that, Mr Kirby, being the ultimate decision-maker, believed on reasonable grounds that the unauthorised use of the MyConnect card was sufficiently serious to justify the immediate dismissal of Ms Love.

In reaching this decision, the Commission stated:

“The MyConnect card was issued to the Respondent [DJP]. The Applicant [Ms Love] was allowed to possess that card because of her employment. I do not think that a reasonable employee acting honestly would perceive that this entitled them to use the card for personal use.”

Further, the Commission noted that this determination may have been different if the card was expressly referred to as being for the employee’s personal benefit in her employment contract or by way of company policies.

The Commission concluded that there was a valid reason for the termination of Ms Love’s employment, and the unfair dismissal application was dismissed.

Take Home Messages

This decision reinforces the position that the management of company credit cards and other funds accessible to employees need to be monitored closely and regularly. Policies should be expressly articulated to staff so that the organisation’s expectations are understood on what these funds can be used for.

To ensure the best protection against misuse of company funds, employers should specify in writing their guidelines regarding corporate credit card use. Employers are also reminded to maintain timely and regular auditing procedures in order to identify any discrepancies on the statements of company cards and other employee benefits.

For more specific information on any of the material contained in this article please contact Sathish Dasan on +61 8 8210 1253 or sdasan@normans.com.au, Ganesh Krishnan on +61 8 8217 1395 or gkrishnan@normans.com.au or Anastasia Gravas on +61 8 8217 1331 or agravas@normans.com.au.