In a rare and welcome example of common sense and justice, the British Columbia Civil Resolution Tribunal ("CRT") has recently decided that an employee who alleged to have been wrongfully terminated in fact owed her employer close to $3,000. How did this happen? Let's take a look.
In Besse v. Reach CPA Inc. the employee was an accountant hired on October 21, 2021. She entered into a written employment contract setting out the terms and conditions of her employment, including that she would work remotely, and work a minimum of 2,000 hours yearly. In order to compensate the employee for expenses associated with organizing her home workspace, and completing her Chartered Professional Accountant Professional Education Program fees, the company agreed to provide her with an advance payment to be forgiven incrementally over the first twenty-four months of her employment. This advance payment agreement was reduced to writing on the employee's first day, and it expressly stipulated that if her employment ended prior to the advance being forgiven, she would be responsible to re-pay the balance.
The employee struggled with her performance early in her tenure. She asked the company to convene meetings with her because she felt unproductive. The company installed a time-tracking program called TimeCamp onto her computer for her, but the problem persisted. The employee and company met in March 2022 and discussed that the employee was over-budget and behind schedule on certain projects. They created a performance improvement plan for her. However, when the company analyzed the TimeCamp data, they found 50.76 hours recorded on the employee's time sheets but no corresponding work performed.
Two weeks later the company had another meeting with the employee to discuss the discrepancy. It offered her time to consider her response, but she declined. She had no explanation for why she recorded hours on her time sheet that were not actually worked. The parties adjourned, and met again later that day. The employee was terminated for just cause.
The Claim (and Counter-Claim)
The employee challenged the company's just cause position. She made her claim to the CRT claiming severance pay and unpaid wages, up to the $5,000.00 cap at which the CRT's jurisdiction is limited. The company on the other hand not only maintained their just cause position, but also claimed that the employee owed it the balance of the advance payment.
The test for just cause is whether an employee's misconduct amounts to an irreparable breakdown in the employment relationship. Each case is decided on its own context and merits, to determine whether dismissal is proportionate to the misconduct proven by the evidence. The employer bears the onus to prove just cause where alleged.
The employee in the current case argued that TimeCamp did not differentiate between using her computer for work, and personal use. She said that she also printed out documents and worked from hard copies, which would not have been tracked by the program.
The CRT disagreed. It accepted that TimeCamp automatically tracked her time such that the company could reliably identify and classify work and non-work related activity. It found that 50.76 hours were in fact unaccounted for, and interestingly, the CRT also accepted video recordings of meetings conducted virtually, during which the employee was given the opportunity to explain the unaccounted hours and in fact admitted to submitting hours that she did not work.
The CRT determined that the employee engaged in "time theft", which courts view as a very serious form of misconduct. Further, the CRT held that:
Given that trust and honesty are essential to an employment relationship, particularly in a remote-work environment where direct supervision is absent, I find Miss Besse's misconduct led to an irreparable breakdown in her employment relationship with Reach and that dismissal was proportionate in the circumstances. So, I find Reach had just cause to terminate Ms. Besse's employment.
Employee to Pay Back Company
But the CRT's common sense findings did not end there. It calculated what the employee's hourly wage would have been based on her annual salary and requirement to work 2000 hours annually. It then multiplied that hourly wage by the 50.76 unaccounted hours, and ordered the employee to pay back $1,506.34 to the company, including CPP and EI payments it made on her behalf.
And then the CRT considered what to do with the unpaid balance from the advance payment from the beginning of the employee's time with the company. It determined that the advance pay agreement was not a new contract that required "fresh legal consideration" but was a contractual amendment. Again, this was based largely on recordings from a meeting between the parties held when they were negotiation terms and conditions of employment.
The CRT decided that the company was entitled to withhold the entirely of the employee's final pay cheque toward paying down the balance owed to it, and then ordered that the employee repay the remaining $1,096.73. In total, the employee was ordered to pay back the company $2,756.89 for time theft, repayment of the advance, interest, and CRT fees.
Takeaways for Employers
This should be a welcome legal development for employers. Employment disputes are by their fundamental legal nature, contract disputes. When parties have a contract dispute, the resolution is to place the aggrieved party in the position they would be had the breaches not occurred. It makes perfect sense therefore that the employee repay the employer for proven time theft and unpaid cash advance.
However, adjudication is rarely this straightforward. The CRT is a special tribunal designed for expediency and convenience. It does not need to hold in-person hearings, and in fact, this case was decided in writing. Further, the Tribunal had the benefit of significant video evidence demonstrating the parties' communications and representations during meetings.
Employers should take this case as an example of the importance of properly documenting agreements with employees, and any communications that may relate to terms and conditions of employment, and performance management efforts.
The Lawyers for Employers at CCPartners have extensive experience helping employers understand their rights in employment relationships, and strategies for practical record keeping.
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