Termination without notice for working hours fraud

In a judgment from 3 December 2020, the Regional Labour Court (Landesarbeitsgericht – LAG) of Cologne ruled on the question of when an employer can issue a termination without notice pursuant to Art. 626 (1) of the German Civil Code (BGB) due to working hours fraud. An employee had tried to justify lying about his actual working hours by saying that he was afraid that admitting he had come to work too late would lead to his dismissal.

The original dispute – Termination without notice for working hours fraud?

The employee is 30 years old. He had been employed by the employer since 29 June 2017 as a cutting machine operator / equipment manufacturer. The employer has 200 employees and an elected works council.

The employee was scheduled to work on the early shift on 21 March 2019. This shift starts at 6:00 a.m. He did not enter the company premises until 6:40 am. In a working hours correction form, he stated that he had worked from 6:00 a.m. to 2:45 p.m.. After the employer became aware of this, a warning was issued to the employee.

On 31 October 2019 and 4 November 2019, the employee again submitted incorrect requests for working hours corrections. He justified these with “forgotten card” and “punching error” respectively. The employer heard the employee on 11 November 2019 regarding the allegation of the erroneous correction requests. On 12 November 2019, the employer applied to the works council for approval of the intended termination without notice. After the approval was received, the employer declared termination of the employment relationship without notice in a letter dated 18 November 2019.

The employee filed an action for protection against dismissal with the Aachen Labour Court. The Labour Court dismissed the action in its entirety. It based its decision on the fact that an incorrect entry of working hours after a prior warning constitutes good cause for termination without notice within the meaning of Art. 626(1) of the German Civil Code. The focus of the accusation was that the employee had tried to cover up the fact that he had been late. Due to the employee’s young age and short period of employment, the balance of interests was in favour of the employer in view of the serious breach of trust. The dismissal was also proportionate, as no equally suitable and necessary measure was apparent.

The decision – Essential is avoiding a risk of future disruptions to the employment relationship

The decision by the Regional Labour Court confirms the decision of the Labour Court. A termination without notice because of working hours fraud is possible.

In this context, it was also irrelevant that the incorrectly written-down working hours only deviated by a few minutes from the actual working time worked. Concerning the question of the effectiveness of an extraordinary termination, it is essential avoiding a risk of future disturbances of the employment relationship. It was unreasonable for the employer to proceed with the continuing obligation if the employee had already been warned because of a similar attempt of concealment.

The plaintiff’s argument that he practically had to conceal the fact that he had turned up late for work because he feared that this would lead to his dismissal did not justify his conduct. This was an inadmissible circular argument. A threat of dismissal for repeated lateness is lawful. If one were to follow the employee’s argumentation, any warning due to a concrete breach of duty would then justify an employee’s attempt to conceal a repetition of such breach of duty.

Practical tip – Terminate within a reasonable time after becoming aware of the breach of duty

Termination for breach of duty requires that notice be given within a reasonable time after knowledge has been gained of the breach of duty. Pursuant to Art. 626 (2) BGB, termination without notice for good cause must be given within two weeks of the date on which the breach of duty became known.

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Further information on the decision can be found here.