Related case law
Under German case law, it is accepted that employees' offences against property – irrespective of value – can constitute good cause for termination without notice pursuant to Section 626 of the Civil Code. In a landmark decision of 1984 the Federal Labour Court stated that the petty theft by a baker's shop assistant of a one-day-old piece of cake could justify immediate dismissal. The decision was followed by cases involving the theft of three kiwis, two packs of tobacco, one litre of cream, jam and vegetable oil, 62 small bottles of alcoholic beverages which had been written off and a lipstick.
The case of 52-year-old Barbara E – known throughout Germany by her nickname 'Emmely' – caused quite a stir in the media. Emmely, a cashier, had been employed by a large supermarket chain for 31 years. One day in January 2008 she took two deposit coupons which had been left behind by a customer. The coupons could be cashed in upon the return of empty bottles. Emmely cashed in the coupons for herself for a total value of €1.30. Her employer dismissed her without notice.
Unlike the local labour court and the regional labour court, the Federal Labour Court ruled that the termination was not justified. The court pointed out the general principle that two steps are required to justify termination without notice:
- Good cause must be established; and
- The conflicting interests of the parties involved must be balanced.
In the first step, the court repeated the general principle that offences against property can constitute good cause. An employee who commits unlawful and intentional acts against his or her employer's property both seriously injures his or her duty of care and abuses his or her employer's trust. Such behaviour may constitute good cause even if the unlawful acts concern things of little value or result in little or no damage. The court rejected public demands for a de minimis limit on offences against property.
In the second step, the court stated that the concept of 'absolute' grounds for termination is not enshrined in German law. Contrary to what many believe, this assertion was nothing new, but rather was in line with the general principles at issue. Whether an employee's (criminal) act against the employer's property may justify termination without notice depends on the result of an extensive weighing of interests, taking into account all relevant aspects of the particular case. Termination without notice requires that no less strict means are available to prevent a future breach of contract. In particular, milder reactions such as warnings or statutory notices of termination may be considered. The employer must assess each situation and decide whether the employee can be kept, at least until the expiry of a notice period. According to the court, no definitive criteria for such decisions can be set. However, the duration of the employment relationship must be taken into account; if an undisturbed employment relationship has existed for many years, close examination is required as to whether the trust relationship has been completely and irreversibly destroyed by the employee's actions.
Based on these general principles, the Federal Labour Court declared Emmely's termination ineffective. Her serious breach of duty, which also related to the core area of her duties, was outweighed by the fact that the relationship had until then existed for more than three decades without problems. The employee had enjoyed a high level of confidence during this employment relationship. The court ruled that this confidence could not be fully destroyed by a single breach of duty. Due to the marginal economic loss of the employer, a warning would have been an appropriate and sufficient measure. The court added that the employee's behaviour upon receiving her notice of termination (she did not confess, remained unrepentant and blamed others for her actions) did not justify the termination. Actions during a lawsuit do not influence the weighing of interests.
Related case law
Several decisions that are closely related to the Emmely case have reflected the Federal Labour Court's view, stressing the need for an extensive balancing of interests.
The Mannheim Regional Labour Court declared ineffective the termination of a sanitation worker who was employed by a waste disposal company. Despite an explicit prohibition, the sanitation worker removed a cot from a waste container for his children. The court held that termination was disproportionate on the grounds that the employee had worked with the company for seven years without major problems and the cot had no economic value for the employer.
In September 2010 the Hamm Regional Labour Court decided on the effectiveness of the termination without notice of a 41-year-old man who had worked with the company for 19 years and was dismissed because he had charged the battery of his personal human transporter – a two-wheeled, self-balancing electric vehicle (a Segway PT) – at work. The cost of the power was, at most, 1.8 cents. The court declared that the termination without notice was ineffective. A warning could have re-established confidence. When balancing the interests, the court took the long period of employment and the insignificant damage into account, as well as the fact that employees' private use of electricity at work is commonplace.
Terminations based on the consumption of food without permission are relatively common. The Schleswig-Holstein Regional Labour Court had to decide on the termination of an employee who had eaten part of a slice of pizza and meat leftovers, and the Hamm Regional Labour Court ruled on the forbidden consumption of fries and meatballs. The relevant regional labour courts declared the terminations ineffective. Both employees had worked for their employers for 19 years, achieving permanent employment which was not subject to dismissal due to collective bargaining agreements, and neither had ever received a warning. By weighing the interests, the courts concluded that a warning would have been the correct measure in relation to the offending employees in order to give them the opportunity to rethink and change their behaviour.
Bucking the trend of keeping employees employed, the Lörrach Labour Court decided that a termination due to the theft of six Swabian ravioli was effective, even though it affected a long-term employee. In the appellate proceedings, the Mannheim Regional Labour Court held that the theft could not justify the termination. The parties agreed on a court settlement.
The Federal Employment Court's decision is frequently considered to mean that there is a general ban on terminations in cases of petty theft by long-term employees. This is not entirely correct, since termination without notice always requires a balancing of interests and the period of employment is not an absolute factor. However, it is true that the Federal Labour Court's decision has tightened up enormously the requirements for termination. Two cases which were tried immediately after the Emmely decision dealt thoroughly with the Federal Employment Court guidelines. They demonstrate the existence of slight uncertainty along the courts of lower instance.
The Berlin Labour Court decided a similar case just a few months after the Emmely decision. A supermarket cashier was suspected of having manually created deposit coupons and taken the equivalent of €6.06. Even though the cashier had worked with the company for 17 years, the court held that the termination without notice was effective. The long period of employment was not a decisive factor when balancing the interests. The court ruled that the case was not comparable to Emmely because the employer suspected that the employee had repeated the offence on more than one occasion and there was an economic loss to the employer involved. Finally, the suspected criminal offence related to the core area of the cashier's work. The appellate proceedings to this case are pending and their outcome is uncertain.
In another case an employee was allowed to celebrate her 40th employment anniversary at the expense of her employer up to a maximum amount of €250. The employee handed in a receipt in the amount of €250 while having actually spent only €83.90. The Berlin-Brandenburg Regional Labour Court declared this termination ineffective because the employee had been employed with the company for a long time and had never attracted attention because of any financial irregularities, and her behaviour was unrelated to a core area of her work. The court greatly extended the case law of the Federal Employment Court, since the limit for petty theft – which is about €50 under German law – was significantly exceeded. A revision was not allowed, and as a result the uncertainty surrounding how to deal with terminations connected to property-related offences increased.
The Federal Employment Court decision in Emmely set no new requirements for terminations without notice. Nevertheless, in practice, since then the courts of first and second instance have been much more reserved in their rulings on terminations of longstanding employees in connection with offences against property, especially petty theft. Such cases require careful assessment as to whether a warning could positively affect the behaviour of the relevant employee, or whether the breach of duty fully destroyed the confidence, which would lead to a termination without notice.
However, the Federal Labour Court emphasised that deliberately misleading statements made during a lawsuit may justify a new termination, even if they do not form part of the weighing of interests regarding the termination concerned. Alternatively, the employer may file a dissolution petition pursuant to Section 9 of the Protection Against Unfair Dismissals Act. If the court considers it unlikely that a continued working relationship will be beneficial to the company's business interests, it can dissolve the employment relationship upon the employer's request and order the employer to pay an appropriate severance payment to the employee.
For further information on this topic please contact Bjoern Gaul, Thomas Glaesmann, Andreas Josupeit or Bernd Roock at CMS Hasche Sigle by telephone (+49 211 4934 409), fax (+49 211 4934 127) or email ([email protected], [email protected], [email protected] or [email protected]).