The Supreme Court recently confirmed that an employee’s conduct involving a conflict of interest may constitute a serious breach of employment duties warranting dismissal, even where the conduct involves a one-off instance of competing business activity, causes no loss to the employer and generates no personal benefit for the employee.

The case concerned an employee of a leasing company who arranged more favourable car financing for a company owned by an acquaintance. The employee subsequently advertised the financed vehicle for rent on a website.

In addressing the conflict of interest in this context, the Supreme Court emphasised that, when assessing whether an employee has fulfilled their duties, the decisive factor is whether the employee’s conduct was aimed at protecting the employer’s assets or acting against them, and whether the employee acted in breach of the employer’s legitimate interests. As regards the validity of the dismissal, the key consideration is the severity of the breach of employment duties.

Supreme Court, Case No. 21 Cdo 3270/2025, judgment of 22 July 2026

Authors: Helena Hailichová and Lenka Dvořáková