Recent court decisions

Covert surveillance even without permission from the works council!

In Germany there are extremely strict regulations governing video surveillance in places outside public spaces. The privacy rights of employees have very high priority, and surveillance is only legal if there are important grounds for justification. In a spectacular verdict of the German Federal Labour Court (dated 20 October 2016 – 2 AZR 395/15), however, it has now been established that under certain circumstances the video surveillance of employees is legal even if the works council has not been informed first.

In this particular case, an authorised car dealer had noticed that spare parts had repeatedly gone missing. After the problem had been discussed in the company and access to the warehouse had been forbidden for all employees except two warehouse workers, parts still went missing. The works manager then had a video camera installed. When it then turned out that one of the mechanics had stolen spare parts from the warehouse, he was dismissed.

The employee appealed, since he considered that his privacy rights had been violated and the works council’s right of codetermination had been infringed. He therefore argued that the video material should not be used in court. The Federal Labour Court did not share this view and considered that the principle of proportionality had been observed.

Eligibility of costs for private investigators

Government employee must bear costs for private investigators

The company Apex Detektive GmbH was commissioned to monitor a government employee in order to establish whether he may have failed to honour his professional obligations, and to prove this in a form that could be used in court. In the legal dispute concerning the reimbursement of the private investigator costs by the government employee, the following judgment was given:
a government employee who deliberately fails to honour his professional obligations must subsequently bear the investigator costs incurred in proving this failure.
This was decided by the Higher Administrative Court of the Rhineland Palatinate in Koblenz (Ref.: 2 A 11942/03.OVG), which thus dismissed the government employee’s appeal against the payment.
The government employee had taken breaks to rest in his apartment during official trips between several tax offices, even though his superior had prohibited him from doing so. Because his superior suspected this, he commissioned a private investigation firm.
This case was invoiced in accordance with the aforementioned rates. An examination confirmed the suspicion in hand.

Malingering can be expensive

A malingerer must reimburse his deceived employer for any private investigator costs if he pursues other activities while he is incapable of work.
Mainz Higher Labour Court 5 Sa 549/99

An employee who behaves in a manner not conducive to recuperation during medically certified incapacity for work commits an intentional violation of his contractual duty, which obliges him to pay damages to his employer. The obligation to pay damages covers all expenditure incurred by the employer to the extent that such expenditure can be regarded as necessary according to the circumstances of the case. This can also include the costs for commissioning a private investigation firm if there are specific grounds for suspicion. The employer cannot be expected to observe the employee with his own staff who are experienced in investigative and surveillance work as detectives.
Lower court decision: Labour Court Koblenz, Ref. 5 Ca 1265/98 N
Rhineland Palatinate Regional Court 5 Sa 540/99

Purported performance of work

The defendant – a sales representative in the pharmaceutical industry – is ordered to repay his remuneration for one week since he failed to honour his main obligation to perform work, and is also ordered to repay the employer’s social insurance contributions as well as the private investigator costs incurred.
Background: a pharmaceutical company suspected that the expense accounts and visit reports of the sales representative were not correct. A private investigation firm was therefore commissioned to observe the employee for one week. The private investigator established that this sales representative regularly spent several hours in the enterprise of his wife and helped out there. He is also a shareholder in this limited liability company. A comparison of the times and expenses charged showed that his travel reports were falsified.

Legal matters

If private investigator costs were necessary for the preparation of enforcement, they are to be defined as necessary costs for enforcement and are thus reimbursable.
Freiburg/Breisgau Regional Court 3 T 80/94

Among other courts, the first Senate of the Higher Regional Courts in Hamm (Ref. 15W405/68), Munich (Ref. W1234/76)
and Braunschweig (Ref. 3W10/74) declared in their final judgements that private investigator costs as extrajudicial expenditure can or must be reimbursed if they were necessary to prepare appropriate legal action or defence.
Hamm Higher Regional Court 15W405/68

Concerning legal provision on costs, the commissioning of a private investigator is justified if there is already a certain suspicion, yet the details and evidence required for the filing of a conclusive application or legal defence still have to be obtained, and if this is not possible without the help of a private investigator and not cheaper than with the help of a private investigator, and if there is a direct connection between the expenditure incurred and the subsequent court case.
Hamm Higher Regional Court 23 W 92/92

Pre-trial costs for private investigators are eligible for reimbursement if the commissioning of a private investigation firm is in direct connection with a specific legal dispute and, when considered objectively from the point of view of the party, the commissioning of a private investigator is required for the conduct of the court case – to bring an appropriate action or to appropriately defend against an action brought by others – in accordance with Sec. 91, Subsec. 1 German Code of Civil Procedure.
Koblenz Higher Regional Court 14NW671/90

In cases of compulsory execution, the investigation costs of a private investigation firm for obtaining information about address, employer, financial situation and credit-worthiness of the debtor – even if such efforts were unsuccessful – are necessary and therefore reimbursable.
Cologne Regional Court 9 T 106/83

Private investigator costs are eligible for reimbursement if, depending on the circumstances of the individual case, the facts established by the commissioned private investigator were necessary and could not be obtained more easily otherwise; this must be credibly demonstrated through the presentation of the investigation report and specific invoices. The directly case-related facts obtained by the private investigator must also have advantageously changed the position of the client in the case.
Munich Higher Regional Court 11 W 1592/93

Labour law/Notice of termination

An employer may terminate the employment contract of an employee without notice who has accepted bribes in business matters, even if, according to the applicable collective bargaining agreement, he can only be dismissed “for good cause” because of his long service with the company. Whether the employer suffered a disadvantage because of the act of his employee is irrelevant. There is a risk that the employee “no longer safeguards the interests of his company alone.” This is a sufficient reason for termination without notice.
Düsseldorf Higher Labour Court 18 SA 366/01
Despite a previous settlement in the action against unfair dismissal, the employer retains the right to recover the private investigator costs in subsequent damages proceedings.
Hagen Labour Court 3 Ca 618/90

Building a house while on sick leave entitles the employer to terminate employment. Anybody who performs construction and transportation work for the construction of his new house while on sick leave, instead of recuperating, may be dismissed by his employer with the agreed period of notice. If the employee only feigned illness, termination without notice is also possible.
Hamm Higher Labour Court 15 SA ….

In cases of particularly serious violations affecting the trust between the employer and the employee, courts also accept immediate termination without prior warning.
The interpretation by the courts of “particularly serious violations” range from the theft of a piece of cake (Federal Labour Court Ref: 2 ARZ 3/83) to working in a third-party company when on sick leave.
Munich Higher Labour Court 6 Sa 96/82

An employee who is incapable of working and on sick leave, and who works at home for private purposes (here: painting and decorating) may generally be dismissed.
Rhineland Palatinate Higher Labour Court Sa 979/99

The management is not obliged to inform the works council about the surveillance of employees.
Federal Labour Court 1 ABR 26/90

In certain cases, employers may commission a private investigator to observe a seriously negligent employee, and may even send the investigator’s invoice to the dismissed party. This was reported by the information service “Arbeitsrecht kompakt” (Compact Labour Law) in connection with a ruling by the Cologne Higher Labour Court.
In the case in question, an employee had for years conducted banking transactions during his working hours and, as a second job, had filled up cigarette machines.
Cologne Higher Labour Court 6 (3) sa 194/03

Justified commissioning of a private investigation firm

Covert video surveillance is permissible when losses of goods have occurred and the use of hidden cameras offers the opportunity to identify the offender.
Federal Labour Court 5AZR116/86

Employers may have employees on sick leave monitored by private investigators and, if the suspicion is justified, charge them the costs incurred.
See also: Rhineland Palatinate Higher Labour Court Ref. 5 Sa 540/99
Kassel Federal Labour Court 8 AZR 5/97

Miscellaneous

If the party commissioning a private investigation firm is a businessman or a freelancer, the invoice of such firm is, as a rule, deductible as a business expense.
Hesse Fiscal Court 8 K 3370/88

When a private investigator is commissioned, the necessity for and the scope of the investigations must be proved by the submission of written investigation reports.
Düsseldorf Higher Labour Court 7TA 243/94

Test purchases are sufficient as evidence.
Kaiserslautern Labour Court 5 CA 119/84

If an applicant has submitted false certificates and references to his subsequent employer, he must also pay him damages after dismissal. The Cologne Higher Labour Court ruled that the remuneration paid, including employers’ contributions to social insurance, must be paid back. The employer must be able to rely on job references being true and correct.
Cologne Higher Labour Court 11 Sa 1511/99

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