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.
Answered by: Rabbi Gidon Rothstein