Skrevet af
The credit note that turned into a summary dismissal
A company was justified in dismissing a managing director who had made private purchases through the company’s suppliers without settling the purchases with the company.
Skrevet af
Dorthea Bisgaard Vase
Forfattere
It is essential to an employment relationship that the employer can trust employees in positions of trust with the management of the employer’s finances, such as employee benefits. In this case, a managing director was summarily dismissed after he had credited an invoice covering private purchases made from the company’s suppliers.
The managing director’s private purchases were made under a supplier scheme offered by the company to its employees. Under the scheme, the company was invoiced for the employees’ purchases and then issued an invoice to the employees. Over a period of three months, the managing director had made purchases amounting to approximately DKK 115,000 but had credited an invoice for an amount of just under DKK 100,000.
According to the company, the invoice had not been credited according to agreement. The company therefore believed that the managing director had used the supplier scheme as a credit facility without approval, and for this reason he was summarily dismissed.
The managing director did not believe that the summary dismissal was justified and claimed, among other things, salary during the notice period. He argued that he had credited the invoice because there was an error in the amount and because he wanted to avoid the incorrect amount appearing as a negative figure in the company’s monthly statement. He also believed that the terms and conditions of the supplier scheme were unclear. The director did not dispute that the company had a claim against him.
Breach of trust as well as material breach of contract
Both the district court and the high court found for the company.
The high court attached importance to the fact that the managing director had held a position of trust where he could issue, approve and credit the company’s invoices. The managing director’s issuing and approving a credit note to himself, without the company’s approval, undoubtedly constituted a breach of trust and a breach of contract so serious that the company had been entitled to summarily dismiss the managing director.
In this context, it made no difference that the company had not provided clear instructions to its employees on the exact application of the supplier scheme.
Norrbom Vinding notes:
The decision is an example of how financial irregularities can constitute material breach of contract, and thus grounds for dismissal, including a situation where an employee in a position of trust issues a credit note to themselves without the employer’s knowledge and consent.
The content of the above is not, and should not be a substitute for legal advice.
Forfattere