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Summary dismissal of managing director for misappropriation

May 2012 - Employment. Legal Developments by Norrbom Vinding Law Firm, member of ius laboris.

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Termination of employment

The High Court affirmed the lower court’s judgment that a managing director was guilty of gross ‎misconduct for withdrawing about EUR 10,000 from the company’s bank account for private purposes. ‎The company was therefore justified in summarily dismissing him.‎

If someone takes their employer’s money or other company property without permission, this is a ‎serious breach of the trust between employer and employee. This also applies if the employee in ‎question is the managing director of the company, as illustrated by this case from the Danish Western ‎High Court.‎
A company had had a period in which its accounts were in a mess. And when it decided to clear up the ‎mess, it found that the managing director had been very active in using the company’s bank account – ‎but not always on behalf of the company.‎
They found various indications that a number of withdrawals had gone towards paying for the managing ‎director’s private expenses. Also, a lot of bookkeeping records were missing and they found heaps of ‎unopened mail. On that basis, the company decided to dismiss the managing director with immediate ‎effect.‎
The managing director, however, disagreed. As he saw it, there had been no unauthorised withdrawals ‎from the company’s bank account and there were no irregularities which would warrant a summary ‎dismissal.‎
 
Misappropriation of funds
The whole affair ended with a district court ruling against the managing director. He was unable to prove ‎that the many withdrawals had been spent on company business, and was therefore ordered to repay ‎the approx. EUR 10,000 to the company.‎
When the district court – and, on appeal, the High Court – then had to decide in another case whether ‎the company had been justified in summarily dismissing the managing director, the judgment was clear. ‎The managing director was guilty of gross misconduct and, accordingly, the summary dismissal was fair.‎
 
Norrbom Vinding notes:
  • that, as a starting point, the judgment illustrates that misappropriation of the employer’s funds ‎for private purposes will constitute gross misconduct and a summary dismissal will therefore be ‎justified.
The above does not constitute legal advice and should not be relied upon as such

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