Regional Court Rules False Claims in Employment Disputes Can Justify Termination

A landmark ruling by the Lower Saxony Regional Labor Court has established that employees who make false claims during legal proceedings against their employers may face immediate dismissal, even during a notice period following ordinary termination.

The August 13, 2025 decision (case number 2 SLa 735/24) found that misrepresenting facts in court constitutes a serious breach of an employee’s duty of loyalty, potentially justifying extraordinary termination without notice.

The case involved a branch manager at an e-bike retailer who had been employed since January 2016 and promoted to his management position in July 2021. After receiving notice of termination, the employee filed an unfair dismissal claim and sued for bonus payments.

To support his bonus claims, the employee submitted what he claimed was an employment contract dated January 15, 2016. He asserted that both parties had agreed to and operated under this contract’s terms. The employer contested this claim, arguing that no such agreement had ever been finalized.

In a critical turn, the employer produced email correspondence showing that a similar draft contract had only been negotiated in early 2023—seven years after the purported agreement date. Evidence suggested the employee had modified this recent draft and misrepresented it as a long-standing agreement.

Upon discovering this apparent deception, the employer issued an extraordinary termination without notice, citing attempted trial fraud as grounds for immediate dismissal.

The case initially went before the Lingen Labor Court, which ruled in the employee’s favor. The lower court determined that submitting an unsigned employment contract did not necessarily constitute a factual assertion that parties had agreed to its terms, classifying the employee’s claims as merely expressing a legal opinion rather than misrepresenting facts.

However, the Lower Saxony Regional Labor Court reversed this decision on appeal, finding that the employee had indeed attempted to commit trial fraud by falsely claiming an agreement existed. The higher court determined that asserting the parties had “agreed on and lived by” the submitted contract contained a “core of fact” beyond legal opinion—a factual claim that was demonstrably false.

The ruling draws an important distinction between legal opinions and factual assertions in employment disputes. While employees may express differing legal interpretations without consequence, deliberately misrepresenting factual circumstances constitutes a breach of duty that can irreparably damage the employer-employee trust relationship.

“This decision sends a clear message about the importance of honesty in employment litigation,” noted employment law expert Dr. Anna Schmidt, who was not involved in the case. “It reminds both employees and their legal representatives that strategic misrepresentation can have consequences beyond the case at hand.”

The court emphasized that employees cannot escape responsibility by claiming false statements were made only by their legal representatives. Under German procedural law (Section 85(1) of the Civil Procedure Code in conjunction with Section 46(2) of the Labor Courts Act), employees remain responsible for assertions made on their behalf.

The ruling serves as a cautionary reminder for employees engaged in workplace disputes to maintain truthfulness when presenting factual circumstances, regardless of the perceived strategic advantage that misrepresentation might offer in pursuing claims against employers.

For employers, the decision reinforces available remedies when faced with employees who attempt to manipulate legal proceedings through factual distortions. The case establishes that such behavior can provide sufficient grounds to terminate employment immediately, even when an ordinary dismissal process is already underway.

Legal experts suggest the ruling will likely influence how employment disputes are argued in German courts going forward, with heightened scrutiny on the factual basis of claims made during proceedings.