6 February 2023
Time Theft – Monitoring Remote Workers
Increasing demand for remote work has presented new challenges for businesses, particularly where it comes to recording time for work completed. While time theft has historically been difficult for employers to prove, the rise of remote work has ushered in new methods such as activity tracking software which has simplified the employer’s ability to prove misconduct.
In Besse v. Reach CPA Inc, 2023 BCCRT 27, a decision by the Civil Resolution Tribunal (“CRT”) published online on January 11, 2023, the CRT ordered that a BC accountant reimburse its former employer for “time theft.” The employee, who worked remotely for the employer, was actually the party who initiated the action alleging that their employment was terminated without just cause. The employee claimed unpaid wages and severance pay in lieu of notice in the amount of $5,000 (the maximum allowable amount in the CRT process).
The employer claimed in its response that the employee was terminated for just cause on the basis of time theft and made a counterclaim for damages in the amount of $2,603.07 ($1,506.34 for time theft and the remainder for an outstanding debt.) In employment cases, the employer bears the burden of proving just cause. In support of the claim of just cause, the employer submitted that in February 2022, it had installed time-tracking software onto the employee’s work laptop because it had concerns about timesheet entries made by the employee, that did not appear to correspond to actual work completed. After a two-week monitoring period the employer expressed their concerns to the employee, and eventually terminated their employment for cause.
The employee argued in response that they struggled to use the software and they could not get the software to differentiate between work use and their personal use of the computer. However, the employer was able to show the court how the tracking software automatically recorded when and for how long services, software, or documents are open, allowing the employer to easily distinguish between work and non-work activities.
The employee further argued that they did significant work in hard copies. However, the tracking software also kept a record of printer activity, and in this case the activity showed that the employee had not printed anything in the volume required to have completed the work claimed. In any event, work performed in hard copies was also required to be uploaded and recorded which was not done.
Based on the evidence of the parties, the CRT found that the tracking software accurately recorded the employee’s work activity and that there was unaccounted time recorded on their timesheets. The CRT held that given the trust and honesty essential to an employment relationship, especially in a remote work environment, time theft constitutes serious misconduct. The employee was ordered to pay the employer its claim of debt and time for $2,603.07.
Time theft has been addressed by Canadian courts before this case. It is understood as a falsification of hours for the purpose of receiving pay for time not worked and is considered a serious breach of the employment relationship as it constitutes fraud and theft against the employer.
Presenting Proof of Time Theft
In order to prove time theft, an employer must demonstrate that the employee improperly or incorrectly recorded time because they intended to be paid for the time that they did not work. Improperly marking time sheets has been considered time theft. (Integra Support Services v. Hospital Employee’s Union, 2022 CanLII 51881 (BC LA))
The presumptive penalty for theft by an employee is termination, but it is not automatic. If the time theft is of a minimal nature, a lesser penalty may be appropriate. Arbitrators have held that it is necessary to look at the nature and seriousness of the offence, and to consider whether the employment relationship has been irreparably harmed (Retail, Wholesale Department Store Union v. Yorkton Cooperative Association, 2017 SKCA 107).
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