The responsibility to report others' malfeasance depends on several factors, such as your job title. If you are a supervisor of this person, then it might be your job to either handle him or her yourself, or report the situation. Assuming you are not, there are two roads you can consider taking:
First, you might feel comfortable enough exploring with the coworker why he or she acts this way. There may be a valid reason, such as an undisclosed deal s/he has made with the boss (working extra from home to make up for the time would be one), or some temporary emergency that requires this extra time. In the latter case, or if this is a justification-free abuse of lunchtime, you might consider whether you are in a position to remonstrate with him or her about her conduct, such as by urging him or her to discuss the situation proactively with the boss. Helping each other find better ways to behave is an important Jewish value, known as tochachah, remonstration.
In many cases, though, it is easy to imagine the coworker has no valid excuse and/or refuses to change or discuss it with the boss. In that case, you are aware of a situation that may be costing the employer money, and there is another obligation, to the extent possible, to help our fellows avoid loss when possible. On the other hand, speaking ill of others is prohibited in many circumstances, known as lashon hara, slanderous talk. What you might seek, therefore, is a way to alert the boss without singling out which coworker is acting inappropriately.
You might ask your boss, for example, how serious s/he is about the one hour limit to lunch, what conditions might justify taking a longer lunch, and so on. From the questions alone, the boss might take the hint and look into employees' lunch conduct more carefully. Barring that, you might go one step further and explicitly suggest to your boss that the lunch privilege is being abused, without giving specific details. At that point, it would be his or her job to supervise more carefully.
This is not quite the same, let me say, as if your coworker were actively stealing, in which case you would be advised to remonstrate with the coworker to both stop and return what was already stolen. If that failed, there would be more room to report exactly what was going on, since this is active theft. In the "long lunch" case, the definition of theft is too murky-- is the coworker paid an hourly wage or a yearly salary? what are the office place rules about personal phone calls during the business day?-- to make it clear exactly what wrong is being committed by taking a longer lunch, and therefore may not rise to the level that allows reporting the offender. It is also true that this malfeasance can be uncovered easily by the boss him or herself, just by paying more attention, and there is therefore no reason to risk your relationship with the coworker in the name of helping the boss.
To summarize then: The first step is to check in with the apparent wrongdoer, to see if there are justifications. If there are not, the next step would be to try to end the wrong at that end, by convincing him or her to stop acting this way. Assuming that is impossible, there is some obligation to try to help the boss avoid loss. Pointed questions about lunchtime behavior can be effective, or a direct warning to be on the alert for that kind of behavior. Since this wrongful action is not quite the same as theft, and is easily uncovered should the boss put a little effort into it (or hire someone to do so), there does not seem justification for you to be the one to specifically name the coworker.
The simple answer is no. The Jewish ethic that informs my answer to this question comes from Leviticus 19:16, "Do not go about as a talebearer among your people; do not stand idly by the blood of your fellow person." This verse is the basis for Judaism prohibition against idle gossip, commonly included in the category lashon harah. Even when someone whats to say something negative about a person for constructive reasons there are seven conditions that the Chafetz Chayim say must be met. One of these conditions is his intention must be purely to help in the situation, not to degrade the subject or cause him shame. Certainly, the case before us is not for constructive purposes even though the colleague is taking advantage of the employer's time and actually commiting a form of geneivah, theft. Nevertheless, the questioner would only be responsible for his/her colleague misuse of his lunch hour if he was his/her supervisor or manager. If this was the situation, then the questioner should speak directly with the person taking an extended lunch hour and give him/her appropriate warnings. Only after such steps were taken could he/she report it to higher-ups.
Your situation touches on three areas of Jewish law and values. These are laws regarding Lashon Hara (literally: evil tongue - understood as gossip or slander), laws relating to theft and the commandment to reprove our neighbor.
First, regarding Lashon Hara, as Jews we should not speak ill of another unless absolutely necessary. Therefore it is important that you do not go straight to your boss right away. Doing so can harm your co-worker and the relationship that you have with your co-worker unnecessarily. Jewish law permits speaking negatively about others only in the case where doing so can stop a greater harm from occurring.
There is, however, in this case a greater harm occurring. That is, unless this co-worker is making up the hour of work at the beginning or end of the day, your co-worker is stealing from your boss by accepting an hour of pay every day that he did not earn. This is theft under Jewish law. I would place it under the same category of the laws that command us to have fair scales and balances - i.e. we should be honest in telling customers how much they owe us for the product. In this case your co-worker is, so to speak, putting his thumb on the scale, and accepting a full day's work for an hour less.
The way to work through these seemingly competing values of avoiding Lashon Hara and preventing theft, lies in the commandment to reprove our neighbor. That means that when we see someone doing something illegal or unethical, before going to the authorities (whether religious or secular), it is our obligation to speak with the person and to try to change the negative behavior through kind words of reproach. This should be done quietly and in private. You may find out in your attempt that the co-worker has an arrangement with the boss that allows for this extra hour (such as working an extra hour in the morning or evening) or there is another reason for the extra hour. If this is not the case, you can warn your co-worker that you will go to your boss if your co-worker does not shorten his lunch hour to conform with company policy (which is already fairly generous).
If the attempt to reprove your co-worker fails, at that point you may speak to your boss and tell him what is going on, as it is important that your employer know if he is being taken advantage of in this way.
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