What the court decided
A Kyoto City bus driver, employed since 1993, took a 1,000 yen note from passengers paying a fare in February 2022 and kept it. Over the same week he used an e-cigarette in the driver's seat five times, against the rules. Drive recorder footage showed both. He first denied the theft when his manager raised it. In March 2022 he was dismissed, and the transport bureau withheld his whole general retirement allowance of about 12.11 million yen.
The Osaka High Court upheld the dismissal but cancelled the forfeiture as excessive: the loss was 1,000 yen and repaid, he had 29 years' service and no previous discipline for handling money. The Supreme Court, First Petty Bench, unanimously reversed. Pocketing fares while working alone with cash goes to the heart of a driver's job and damages public trust in the service. With the smoking breaches, his initial denial and no mitigating background, withholding the whole allowance was within the employer's discretion.
It follows a June 2023 Supreme Court ruling, on a teacher dismissed for drink-driving, that set the same deferential test for public-sector forfeiture.
Why it matters
The case was decided under a city's own allowance rules for public employees, where courts review only for abuse of discretion. Private-sector forfeiture is tested more strictly: courts usually require conduct that wipes out the value of years of service, and often order part payment. Still, the ruling shows how seriously courts treat dishonesty with money in a role built on trust.
Action for employers
- Check your forfeiture clause. It must be in the work rules or retirement allowance rules to be relied on at all.
- Tie it to the role. Spell out which kinds of misconduct, such as theft of company or customer money, can lead to full or partial forfeiture.
- Keep the evidence. Recordings and the employee's first response carried weight; preserve them.
- Decide dismissal and forfeiture separately. Courts review each, and a valid dismissal does not guarantee full forfeiture in the private sector.
Sources
- Supreme Court, First Petty Bench, judgment of 17 April 2025, Case No. 2024 (Gyo-Hi) 201.
- Supreme Court, Third Petty Bench, judgment of 27 June 2023, Case No. 2022 (Gyo-Hi) 274.