Breach of the employee’s duty of loyalty in the event of working time fraud

An employment relationship is based on reciprocity. The employee is obliged to perform the work as expected and the employer must pay the employee a wage. Both parties have other important obligations in the employment relationship, namely the employee’s duty of loyalty and the employer’s duty of care. Violation of these duties may lead to termination of the employment relationship without notice. 

This article deals with the breach of the employee’s fiduciary duty in the case of working time fraud.

It is increasingly common for employees not to record their working time in good faith. This is due to the fact that the increasingly digital recording of working time offers a wide range of possibilities for recording working time during which no work is actually done. Well-known examples of this are later stamping out by workmates or not stamping out during smoking breaks. Another violation of working time is private surfing on the Internet during working hours. These violations are often difficult to prove or verify.

The consequences of such a violation vary from case to case. In principle, however, the following steps and requirements must always be observed. In order for an employment relationship to be terminated without notice:

• a written warning with the threat of termination must be the first step,
• the severity and frequency of the breach of fiduciary duty and the reasonableness of continuing the employment relationship must be taken into account in the decision,
• the need for immediate dismissal is being examined. This means that it must be examined whether lighter means such as a disciplinary measure would be sufficient.

It is also to be expected that the employer will first seek dialogue with the employee. In very serious cases of working time fraud, the criminal offence of fraud^[1] can also take effect, whereby the employee makes himself liable to prosecution.

The employer can also terminate the employment relationship if there is suspicion of a breach of loyalty by the employee. However, if challenged, it must be proven retrospectively that the employer has investigated the suspicion with reasonable measures and that the termination was justified. If this proof is not successful, the employment relationship is not revived, but the employee is entitled to compensation.

Conclusion:

Working time fraud can have different consequences. However, it is clear that it is a breach of contract and the breach must be stopped. If this is not the case, termination without notice is appropriate.

^[1] Art. 146 StGB