Canada: British Columbia Tribunal Confirms Time Theft Proven By Time-Tracking Software May Justify Employment Termination For Cause

The decision of the British Columbia, Canada Civil Resolution Tribunal (Tribunal) in Besse v. Reach CPA Inc., 2023 BCCRT 27 is especially relevant now that remote work has become common. The Tribunal found the employer had just cause for terminating a remote worker's employment for time theft. The employer discovered the time-tracking program it had installed on the employee's work laptop revealed that 50.76 unaccounted hours were recorded on her timesheets. The Tribunal ordered the employee to compensate the employer for the theft of the unaccounted-for hours.

Background

The employee was an accountant at Reach CPA Inc. (employer) from October 12, 2021 to March 29, 2022. Her employment agreement provided she would work remotely. The parties also signed an advance agreement stipulating the employer would forgive 1/24 of its advance of $3,666 to the employee to purchase home office equipment and to pay her professional fees for every month the employee was employed. If the employee's employment terminated before the advance was forgiven, she would be required to repay the employer should the last paycheck be insufficient. When the employee's employment was terminated, $2,903 of the advance was unforgiven.

On February 21, 2022, the employer installed a time-tracking program called TimeCamp on the employee's work laptop. The employer's principal ("FG") analyzed the employee's TimeCamp data between February 22, 2022 and March 25, 2022, and identified hours the employee reported on timesheets that were not spent on work-related tasks.

The parties met on March 29, 2022, and FG's concerns about the employee's unaccounted-for hours were explained to the employee, who declined his offer to take time to consider the information and get back to him. Later that day, the employer terminated the employee's employment.

The employee claimed the employer terminated her without cause and that she was entitled to unpaid wages and one month's severance pay in lieu of notice. The employer claimed it terminated the employee's employment for cause (engaging in time theft) and, therefore, she was not entitled to severance pay or owed unpaid wages. The employer also counterclaimed for the paid wages it claimed amounted to time theft. In addition, the employer alleged when it terminated the employee's employment, she owed the unforgiven part of the advance.

The employer submitted videos showing how TimeCamp tracked the employee's time and activity, and claimed they proved the employee engaged in time theft by recording work time in her timesheets that was not tracked by TimeCamp. The employee did not dispute the video evidence; however, she claimed she found TimeCamp difficult to use and could not get it to differentiate between time spent working and time spent on the laptop for personal use. The employee also claimed she spent a significant amount of time working with paper copies of client documents, which would not have been captured by TimeCamp.

Decision

Was the employee wrongfully dismissed and is she entitled to one month's severance pay in lieu of notice, or did the employer have just cause for terminating her employment?

The Tribunal found that TimeCamp likely accurately recorded the employee's work activity; there were 50.76 unaccounted hours recorded on her timesheets; based on a contextual analysis of the relevant facts, the employer had just cause for terminating the employee's employment for engaging in time theft between February 22, 2022 and March 25, 2022; and since she was not entitled to notice of her dismissal or to severance pay in lieu of notice, this part of the employee's claim would be dismissed.

Does the employee owe the employer paid wages for time theft?

The Tribunal concluded that the employee owed the employer compensation for time theft for the 50.76 unaccounted hours and allowed the employer's claim for $1,506.

Is the employee entitled to unpaid wages?

The Tribunal determined that the advance agreement bound the parties. Accordingly, the employer was entitled to withhold the entire amount of the employee's final paycheck to cover part of the unforgiven $2,903.

Does the employee owe the employer for the unforgiven part of the advance the employer made to her?

The Tribunal held that the employer was entitled to be paid $1,096.73 by the employee because after withholding her final paycheck, that amount was still outstanding under the advance agreement.

Bottom Line for Employers

Employers concerned that employees working remotely may be engaging in time theft will be encouraged by Reach CPA. This case confirms that time theft may justify the termination of an employee's employment for just cause on the basis that such misconduct amounts to an irreparable breakdown in the employment relationship, provided such a conclusion is supported by a contextual analysis of the relevant facts.

Reach CPA may inspire some employers to consider installing time-tracking software on their employees' computers. Employers contemplating this are encouraged to seek the guidance of experienced legal counsel who can ensure that they are respecting any privacy statutes that may apply, and not engaging in any common law privacy torts that may be available to employees in jurisdictions that lack such legislation.

As well, employers in Ontario must remember that Bill 88, Working for Workers Act, 2022 received Royal Assent and became law. Among other things, Bill 88 amended the province's Employment Standards Act, 2000 to require employers with 25 or more employees to ensure that they have a written policy in place for all employees with respect to electronic monitoring of employees.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.