Massaging business expense forms – fatal even without the employee’s signature

An airline dismissed a captain without notice after discovering that the captain had submitted overstated travel expenses, even though the expense form was not properly completed, had been partially overwritten and lacked the required signature.  The first two court hearings upheld the employee’s claim and ordered reinstatement as they regarded the carelessly filled form as a clear sign of lack of the captain’s intention to commit fraud.  But the appeal court disagreed.  

Dismissal for expense claim fraud – too easily applied?

Employers sometimes follow the old adage: if you want to get rid of someone, audit their business expenses. German employment courts can discern such an approach where there is coincidence between the timing and extent of a review, and may look to reconsider the balance between the dishonest expense claim and the ultimate summary dismissal that usually follows. In this case, the Regional Labour Court Düsseldorf challenged the dismissal as the fraudulent yet incomplete and carelessly filled form was held to show a lack of intention. We understand this to be a technical argument for the employment courts to apply greater discretion in its legal assessment.

Correcting this approach, the Federal Labour Court in Erfurt (Bundesarbeitsgericht – docket number 2 AZR 994/12) upheld the strict rule:  An employer may summarily dismiss an employee without prior warning for expense claim fraud, if it can prove dishonesty or fraudulent intent.  Even conditional intent (as opposed to direct intent) is sufficient to end the employment immediately. Submitting an overstated and falsified expense claim is generally considered intentional fraud, even if the expense form was not properly filled in or lacks a signature.