Any error, no matter how small or innocent, can legally be considered as grounds for termination due to dishonesty. This can be made even worse when the error is a deliberate attempt to add degrees or education.
The bigger problem comes when the employee has been working at the company for many, many years after this mistake was made, only to have truth come out. This often happens when one company is bought out by another one. It is common for the new company to review the employment file of each employee whom they obtained through the merger.
Applications are verified, resumes are looked at, degrees are questioned. Many times the new company will find something that is wrong in the original resume or application. They will use this past dishonesty as a reason to terminate the employee.