A Landmark Decision on Time Theft and Electronic Monitoring Policies in the workplace

The recent decision of the BC Civil Resolution Tribunal in Besse v. Reach CPA Inc., 2023 BCCRT 27, serves as a cautionary tale for employees. The case involved allegations of wrongful dismissal, with the claimant, Karlee Besse, seeking $5,000 in unpaid wages and severance pay. However, in an unexpected turn of events, the Tribunal found that Besse had committed “time theft”, which was proven by the employer through a time-tracking software installed on her work computer.

The Decision

Karlee Besse was hired by Reach CPA ("Reach") in September 2021 as an accountant, with the agreement that she could work remotely. However, in March 2022, Reach installed a time-tracking program, TimeCamp, on Ms. Besse's laptop to address time management issues. Ms. Besse fell behind schedule and over budget on files, and a meeting was held to create a performance improvement plan. Reach became concerned about a timesheet entry Ms. Besse had made for a file she had not worked on and found discrepancies of about 50 hours on her TimeCamp data. Reach met with Ms. Besse to discuss the discrepancy, but she declined to explain it. Subsequently, Reach terminated her employment for just cause.

In response, Ms. Besse filed a claim for wrongful dismissal, requesting $5,000 in unpaid wages and severance. In turn, Reach filed a counterclaim seeking $1,506.34 in paid wages which it deemed constituted time theft, as well as $1,096.73 owed under the advance agreement.

According to the Tribunal's findings, Ms. Besse was not required to distinguish between personal and work-related activities after logging into the TimeCamp program since it automatically recorded her activities. The Tribunal ultimately determined that Ms. Besse had inaccurately recorded time for files she did not work on, and that Reach's calculation of 50.76 hours of time theft was correct. Although Ms. Besse argued that she worked on paper copies of client documents that TimeCamp did not capture, Reach presented evidence to challenge her claim. Ultimately, the Tribunal found that Ms. Besse had engaged in time theft, justifying her termination for cause.

The Tribunal dismissed Ms. Besse's claim for pay in lieu of notice and unpaid wages and ordered her to reimburse Reach for the amount outstanding under the advance agreement, pay damages for time theft, plus interest and Tribunal fees.

Electronic monitoring in the workplace

The use of electronic monitoring in the workplace is primarily governed by provincial privacy legislation and common law principles in Canada. In Ontario, the main legislation that addresses electronic monitoring in the employment context is the Personal Information Protection and Electronic Documents Act (PIPEDA). PIPEDA is a federal law that sets out rules for how private sector organizations collect, use, and disclose personal information in the course of their commercial activities.

In addition, employers should also consider developing clear workplace policies that outline their electronic monitoring practices. These policies should provide employees with a clear understanding of what is being monitored, why it is being monitored, and how the information will be used.

The Employment Standards Act, 2000 (ESA) was amended on April 11, 2022 to require employers with 25 or more employees to have a written policy on electronic monitoring in place. In the first year of the requirement, employers who meet the employee threshold on January 1, 2022, had until October 11, 2022, to comply. Moving forward, starting in 2023, and every year thereafter, these employers must have a written policy on electronic monitoring in place by March 1 of that year.

Ontario employers are still required to have workplace policies on electronic monitoring even if they choose not to monitor their employees. It is important for the policy to state that the company does not monitor its employees electronically. If the company decides to use electronic monitoring in the future, the policy should be updated, and all employees should be given reasonable notice of this new policy.

It's important to note that while electronic monitoring is generally permitted in the workplace, employers must balance their right to monitor with employees' right to privacy. The use of electronic monitoring should be reasonable and necessary to achieve a legitimate business purpose, and employers should be transparent about their monitoring practices and obtain consent from employees where appropriate.

Time theft in Ontario case law?

While there are currently no Ontario cases that directly analyze the concept of time theft as it relates to employee compensation, there have been several decisions where the issue of accurate timekeeping has been discussed:

Canada (Border Services Agency) v. Public Service Alliance of Canada, 2013 PSLRB 67 - This case dealt with an employee who was accused of time theft for falsifying time and attendance records. The Public Service Labour Relations Board concluded that the employee had engaged in time theft, justifying the employer's decision to terminate the employee for cause.

1. v. AML Communications Inc., 2010 ONCJ 5 - This criminal case involved an accused who was charged with fraud and theft over $5,000 for submitting false time sheets to their employer. The Ontario Court of Justice found the accused guilty of fraud and theft.

J.S. v. B.D., 2020 ONSC 7351 - This case involved a plaintiff who was accused of time theft by their employer. The Ontario Superior Court of Justice ruled that the employer did not have sufficient evidence to support the allegations of time theft and dismissed the employer's counterclaim.

With the increasing use of time-tracking software in the workplace due to remote and hybrid work environments, the decision in Besse v. Reach CPA Inc. could serve as a precedent for similar claims in Ontario. Employees should be mindful of time-tracking software and employers should be prudent when implementing electronic monitoring policies in the workplace. It is important for employers to seek legal advice and guidance when implementing electronic monitoring policies in the workplace to ensure compliance with all relevant laws and regulations.