Dismissal due to suspected working time fraud
Does a suspected working time fraud justify an ordinary termination? The Mecklenburg-Vorpommern Regional Labor Court had to deal with this question in its decision of March 28, 2023 (case no. 5 Sa 128/22).
In the case at hand, the parties were in dispute about the effectiveness of an ordinary termination. The plaintiff had been employed by the defendant since 2005 and generally worked under a flexitime model at the defendant’s business premises. He had to record his working time either at a stationary time recording device at the building’s entrance or online on his computer. For mobile working, he required his supervisor’s approval.
In October 2021, the plaintiff’s supervisor noticed discrepancies between the recorded working hours and the plaintiff’s actual physical presence on three consecutive days. On days spent at the business premises, he had logged in in the morning, but was not physically present in his office. This gave rise to the suspicion that the plaintiff had already logged in at home but actually started to work only upon arrival at the business premises on several occasions. In February 2022, after previously hearing the works council, the defendant terminated the employment contract. The Stralsund Labor Court dismissed the employee’s action.
Is working time fraud cause for termination?
The Mecklenburg-Vorpommern Regional Labor Court confirmed the lower court’s decision. The circumstances had justified the strong suspicion that the plaintiff had already logged in online from home early in the morning without actually having started to work. The severe suspicion of a breach of duties could result in a loss of the employee’s trustworthiness, which is necessary for the contract. This could constitute a lack of suitability which would make it unreasonable for a fair and reasonable employer to continue the employment relationship.
The deliberate breach of the obligation to correctly document the rendered working hours was per se suitable to constitute a cause for extraordinary termination without notice pursuant to Art. 626 (1) BGB (German Civil Code). The employer must be able to rely on a correct documentation of working hours by the employee working under a flexitime model. Furthermore, in such cases, a warning letter was unnecessary as the breach of duty was severe enough that, according to objective standards, it would have been unreasonable for the defendant to accept such breach even once which had also been clearly recognizable to the plaintiff.
The Regional Labor Court’s decision is consistent with previous supreme court case law. In cases of working time fraud, the breach of trust prevailed. Cases of incorrect recording of working hours should gain increasing importance in future, since the ECJ (case no. C – 55/18) and the German Federal Labor Court (case no. 1 ABR 22/21) recently assumed an obligation to record working hours. This results in a new draft bill for an amendment of the German Working Hours Act We will keep you updated on the state of such legislative proposal’s implementation.