Working time fraud

What follows in employment law

The Federal Labour Court regards deliberate abuse of a time recording system as capable of justifying summary dismissal under section 626 BGB, even without a prior warning, because the basis of trust is destroyed (judgment of 09/06/2011, 2 AZR 381/10).

A weighing of the individual case is still required: length of service, previous conduct, extent of the breach, repetition. Forgetting to clock out once is not fraud but a mistake.

The two-week period in section 626(2) BGB starts as soon as the person entitled to dismiss knows the relevant facts. Anyone investigating at length and then dismissing risks the period having expired.

Who has to prove what

In unfair dismissal proceedings the employer has to prove the breach. A record that can be changed after the fact is weak material for that; a system with logged corrections is strong.

Evidence is itself subject to limits: covert monitoring is permissible only under narrow conditions. The Federal Labour Court has, however, held that a prohibition on using evidence does not follow automatically from a data protection breach (judgment of 29/06/2023, 2 AZR 296/22).

What businesses can do to prevent it

Clear rules on what counts as working time: set-up time, smoking breaks, private errands. Where that is not settled, disputes arise over conduct that nobody meant as fraud.

A procedure for corrections that is logged. Anyone who can add forgotten bookings without concealing it has no reason to manipulate the records.

And an evaluation that makes anomalies visible without permanently monitoring individuals. That difference decides whether it is permissible.