For most employers, false reimbursement is a serious disciplinary violation under their rules and regulations, often forming the basis for dismissing employees found to have made such false claims. However, in practice, false reimbursement can be highly concealed, with many employers only discovering the fact after funds have been approved and reimbursed.

In judicial cases involving false reimbursement, this original approval of employee reimbursement claims often comes back to haunt and adversely affect the outcome.

This article focuses on arbitration and judgment practice of such matters in Shanghai, and combines recent practical experience of the authors to suggest recommendations for employers to properly present evidence and respond in such labour disputes.

Types of false reimbursement

In practice, employee false reimbursement generally falls under one of the following three scenarios.

Fictitious and non-existent payment event. While the invoice submitted by the employee is genuine, the payment event, or trigger of reimbursement, behind the invoice is fabricated. This may take the form of a clear contradiction between contents of the invoice and the payment event, or an impossibility of the payment event. For example, an employee goes on a business trip to Beijing, but submits invoices indicating F&B consumption in Shanghai.

Genuine payment event with false or irregular invoice. While the employee’s payment event is genuine, the invoice is false or irregular. For...

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