Remote Work (WFH) and Time Theft: How the Law May Form

As the recent trend of remote work becomes the norm, the law is still forming on the different nuances of working from home (WFH). Time theft is nothing new for employers and can result in decreased productivity and increased costs. As the WFH trend grows, the law will need to test the balance between employer monitoring versus trust and employee honesty.

Seeking professional advice is preferable to running the risk of a wrongful termination. Please feel free to contact Neil Hain Dispute Resolution for any workplace investigation, mediation, or arbitration questions in relation to employment issues.

What is Time Theft?

When an employee is compensated for work they have not done, this can (in serious cases) be construed as time theft. Slacking off, such as browsing the internet, is usually not interpreted as time theft; however, it is also a matter of degree. Time theft involves misconduct that has an element of intent to defraud. For example, if someone else signs out your time when you have already left the workplace.

What is “just cause” for termination?

Just cause is a legal principle that an employer must have a valid reason for termination of employment. Furthermore, if an employee commits just cause, they may be fired without a notice of dismissal or a severance package.

The Ontario Court of Appeal defined just cause as “if an employee has been guilty of serious misconduct, habitual neglect of duty, incompetence or conduct incompatible with his duties, or prejudicial to the employer’s business, or if he has been guilty of wilful disobedience to the employer’s orders in a matter of substance…” See R. v. Arthurs, ex parte Port Arthur’s Shipbuilding Co. (1967), 1967 CanLII 30 (ON CA), 62 D.L.R. (2d) 342 at p. 348 (Ont. C.A.) (per Schroeder J.A. dissenting)

To find just cause, the misconduct must be “serious”; and amount to “a repudiation of the contract”; that the acts “evince of intention to no longer be bound by the contract”. The judge draws attention to the high threshold for dismissal, which is an “extreme measure”; that must not be resorted to in trifling cases. “Just cause is truly the “capital punishment of employment law”. And employers must be mindful that the evidentiary burden lies with the employer to prove the existence of just cause on the balance of probabilities to terminate employment. See Carscallen v. FRI Corp., 2005 CanLII 20815 (ON SC) at paras. 72 and 98.

Seeking professional advice is preferable to running the risk of a wrongful termination. Please feel free to contact Neil Hain Dispute Resolution for any workplace investigation, mediation, or arbitration questions in relation to employment issues.

Time theft: two contrasting case studies

1. Not all time wasting constitutes time theft.

Unite Here Local 75 (the “Union”) filed a grievance against the Fairmont Royal York Hotel (the “Company”) that they had violated the collective agreement by terminating the employment of Paolo Gonzales (the “Grievor’) without just cause. See Unite Here Local 75 v FairNOBT Royal York Hotel, 2012 CanLII 3872 (ON LA).

The Company argued the Grievor had violated their policy that the Company’s “communication tools and systems” are provided only for “business purposes and must be used in a professional manner”, when he spent a month of excessive non-work-related internet use during working hours.

The policy did, however, allow for limited personal use of the communications tools provided the use was not for personal gain, unethical or illegal purpose, and did not interfere with the Company’s business or colleague’s duties.

The arbitrator found the Grievor was wasting time but was not taking the Company’s property. “He is, therefore, not violating the relationship of trust in the same way as someone who steals from his employer or even in the same way as someone who engages in a scheme to have his time card falsely swiped.”

The arbitrator noted the Grievor had an 18-year clean record and had built up a significant “trust equity”, which made the possibility for rehabilitation high. The arbitrator observed that if it were not for the above factors, “spending excessive time on the computer every day for 30 days certainly could be grounds for discharge.”

2. Time wasting results in termination

Conversely, excessive use of the internet was found to be misconduct in breach of the employer’s policies in General Dynamics Land Systems v National Automobile, Aerospace, Transportation and General Workers Union (Caw-Canada, Local no 27), 2012 CanLII 86240 (ON LA).

The Grievor was a 21-year employee of General Dynamics Land Systems (“GDLS”), which produced military vehicles and therefore had a high level of security due to the sensitive nature of their technology.

The Grievor was caught at work with a personal laptop with a USB drive in it. This was seized by security, and it was found for some time that the Grievor had carried out installation of unauthorized software on GDLS computers to view or access over one hundred movies and computer games.

The previous year, the Grievor had also been disciplined for “inappropriate use of a computer”. The Union argued that the “principle precluding double jeopardy applies” as the collective agreement contained a one-year sunset clause that no reliance could be placed on the past discipline. The Union contested that GDLS ought to have known about the Grievor’s past transgressions and, due to the sunset clause, could only rely on a small part of the past period of misconduct.

The arbitrator rejected the Union’s sunset clause argument stating that the Grievor “repeatedly” made improper use of GDLS’ computer assets and was not only engaged in an isolated incident of earlier misconduct.

Ultimately, the arbitrator found that repeated use of unauthorized software on GDLS assets combined with bringing a personal computer and USB stick into the workplace was considered just cause for termination of employment.

Latest cases of time theft while Working from Home (WFH)

The law is still resolving the framework of WFH and time theft.

A recent B.C. Civil Resolution Tribunal has ordered the Applicant, a working-from-home accountant, to pay her employer $2,603.07 in debt and damages for time theft. See Besse v. Reach CPA Inc., 2023 BCCRT 27. Prior to this, the Applicant had disputed she was fired without cause and claimed unpaid wages and severance pay for $5,000. The Tribunal Member determined that tracking software showed irregularities in the Applicant’s timesheets, which amounted to time theft.

The remedies ordered are novel in that the employee was not only confirmed as properly dismissed, but also ordered to pay damages. The appeal period for this decision had not yet expired at the time of posting this case summary.

Wrap Up

The law recognizes a common sense approach to assessing employee conduct in the context of just cause being asserted to discipline for theft of time. In termination cases, evidence of an employee’s intention to no longer be bound by their employment contract is illustrated where fraudulent like conduct is apparent e.g. falsifying time sheets. Whereas evidence of a worker slacking off by browsing the internet or running personal errands (such as picking up children from school or grocery shopping) may not demonstrate an intention to break free of the employment contract and therefore the worker’s disciplinary record will often shape the severity of the disciplinary outcome.

Further nuances to consider are the type of work positions at play. For example, if a professional (such as a lawyer, architect, medical imaging technician, IT specialist, accountant, etc) work from home (WFH) and are able to perform their duties, during non-business hours, to compensate for time taken away from their computer while carrying on personal errands, then this may not be construed as time theft. The law may give rise to a different outcome for workers whose role requires them to remain “on-call” during work hours for example, call centre staff.

Conclusion

Senior Managers and Human Resources professionals often require assistance with employment issues. An experienced, neutral third party can provide a in-depth understanding of the risks and pitfalls involved. Neil Hain has well over 20 years legal experience in British Columbia and is responsible for countless investigations, mediations, and arbitrations. Assistance is available for the following services:

Workplace investigation: impartial fact-finding and reporting that allows an employer to take the appropriate actions.
Mediation: a neutral third party helps disputing parties to resolve an issue. The process is private, flexible, informative and voluntarily binding.
Arbitration: involves a dispute that is decided outside of courts by a neutral third party. It is quick, cost-effective, private, flexible and final.