employee's unauthorised purchases

darbooka

If an employee has made unauthorised purchases and charged them to the company, and then used the good for her own personal use, is the company obligated to pay the bills for these goods (which would not have been ordered or used by the company in any event)?

lush_walrus

No they wouldn't at all, unless the purchase has been authorised. A situation such as you have described above, is either theft (ie if the product was authorised and then removed from the premises) or is potentially a fraudulant purchase (ie if the company funds were used to purchase something for personal use without permission and already claimed back the money by acting as if it were a legitimate purchase). If it hasn't already been paid out of company funds but is being claimed, then it is still quite a serious offense and disiplinary action can be taken (verbal warning would be the norm).

LittleWoman_3

Lush walrus is correct - but strictly speaking if reported to the Police as theft they WILL pursue it.

Even with permission, I know a book-keeper that was convicted of theft, when they got permission to use the "Company Credit card" for a personal purchase and another member of staff found out, and they had been refuse permission to do the same.

This was because it was not "normal practice" within the company.

The HMRC will also treat it as a Benefit in Kind and assess it for Income Tax and possibly National Insurance contributions too.

richt71

darbooka wrote: »

If an employee has made unauthorised purchases and charged them to the company, and then used the good for her own personal use, is the company obligated to pay the bills for these goods (which would not have been ordered or used by the company in any event)?

As already said this is theft or fraud and in most companies will lead to instant dismissal for gross misconduct. You (as employer) are entitled to the money back if you'd already paid.

Savvy_Sue

If the situation is that the employee has placed an official order for things which the company doesn't want and doesn't need, and now the invoice has arrived, then think carefully before not paying.

Because surely in that situation it is the company which will be pursued for payment, the company which will be charged interest for late payment, and eventually the company which will be taken to court for non-payment.

By all means take action against the employee for theft / fraud / dishonesty but think carefully before not paying for the goods at all.

zzzLazyDaisy

It depends on whether the person supplying the goods reasonably believed the person had authority to purchase them on behalf of the company.

For example:

Employee 'A' has a company credit card and is authorised to use it only for covering expenses while on business trips. She uses it to pay for a computer for her personal use. The company would be liable for this purchase because the seller could not have known the employee's use was restricted. However this would be theft and the company could prosecute the employee and/or bring a civil action for recovery of the money. This would also be likely to be a disciplinary matter and likely to result in dismissal, although the company would have to follow the ACAS procedure

contrast with

Employee 'B' is a sales assistant for 'Joe's fruit and veg'. She goes into a bathroom showroom, has the top of the range bathroom delivered to her home address, and tells the showroom she is part owner of Joe's and tells the showroom to send the bill to Joe. The first Joe knows about it is when he gets the bill. In that case he can refuse to pay the bill because the showroom did not act reasonably in accepting the order on those terms