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Misuse of company credit card ruled legitimate reason for terminating employment

The Supreme Court recently dealt with a case involving the controversial use of a business payment card. The employer believed that the employee had misused the card and immediately terminated the employment. The employee objected that he had not received clear instructions on how to use the card, and that the amount had been negligible. Lower degree courts granted the employee’s arguments. The Supreme Court, however, was of a different opinion. It concluded that knowingly misusing a company payment card constitutes a particularly gross breach of the employee’s duties, regardless of the amount of the damage thus incurred.

The terminated employee worked as an office manager. To cover expenses connected with the performance of this work, the employer had entrusted him with a payment card, and only gave him oral advice on the rules regarding the use of the card. The employee then used the card to pay, among other things, a bill of CZK 3 117 in a restaurant where he had met with his subordinates. The party was also attended by a person who had no relationship with the employer. The employee did not inform the employer of the event.

The employer considered the employee’s behaviour a particularly gross breach of duty and immediately terminated his employment. The employee objected that the party had been a corporate event, and that the bill had been rather low. Moreover, he also claimed that he had never received binding written instructions on how to use the card. Therefore, he had believed that he could pay such expenses with the card.

Both district and regional courts sided with the employee. They concluded that the employer had erred by not giving the employee exact instructions on how to use the card and that the employee may have thus believed that he could use the card to pay for his colleagues. The amount covering the expenses of the external guest had been too low to constitute a legitimate reason for the immediate termination of employment.

However, the Supreme Court arrived at an altogether different conclusion. It stated that by paying the bill also for a person who had not been related to the employer, the employee had breached his duty to properly manage the employer’s funds and to protect the employer’s property from harm. The amount of the damage was irrelevant. Regardless of the amount, the trust between the parties of the employment relationship had been seriously compromised. The court also emphasised that as a manager the employee had been obliged to observe legal regulations at work and take measures to protect employer’s property.

While the outcome of the case is positive for the employer, considerable expenses surely were spent on the prolonged litigation, pending since 2011. This could easily have been prevented had the employer paid due attention to the preparation of internal policies, including the rules of using funds owned by the employer.