Resources & Insights

Trust and Honesty in the Employment Relationship

Without a doubt, COVID-19 has drastically altered the nature of employment and how work is performed. Working remotely is no longer the exception and is now the norm in many industries. Although this creates new and exciting opportunities for employers and employees, remote work can also pose a significant problem when taken advantage of. As employees have increasingly more responsibility to track their own time, and freedom to do their work in the way they choose, employers must place considerably more trust in their workers.

Time theft occurs when an employee is paid for work that they did not do. Although it can arise in countless scenarios, time theft takes place when, for example, an employee ends their work day early while remaining on the clock or when an employee spends time on social media during working hours.

With remote work becoming more and more common, time theft is now easier to get away with than it ever has been in the past. In a recent case from British Columbia,[1] an accountant commenced an action for wrongful dismissal after she was dismissed from her employment. The employer counterclaimed for time theft. The accountant worked remotely and had a tracking software installed on her computer. At the hearing, the employer was able to identify a 50 hour discrepancy in one month alone between the accountant’s time sheets and the activity recorded by the tracking software. The Tribunal held that the accountant’s dishonesty led to an irreparable breakdown in the employment relationship. Accordingly, terminating her employment was a proportional response in these circumstances. Interestingly, in addition, the Tribunal allowed the employer’s counterclaim and ordered that the accountant pay back the employer $2,600 plus interest.

Although working from home creates a greater opportunity for time theft, time theft is not new to the pandemic and post-pandemic era. In one Ontario case,[2] a correctional officer was terminated from their employment. Management had learned that they would frequently arrive late and leave early but record their scheduled start and end times on the time sheet. There were also incidents where they would leave for personal appointments during the day without signing in or out. At arbitration, the arbitrator reviewed the caselaw, concluding that courts have taken the position that time theft is dishonest behaviour and can be described as “fraud that strikes at the very heart of the employment relationship.” It is particularly serious where the employee is responsible for recording their own time. As such, the arbitrator agreed with the employer, finding that the employer had just cause to terminate.

These decisions illustrate how seriously the courts treat time theft, and how important trust and honesty is in the employment relationship. This is especially true with remote work. Employees need to ensure that they are tracking their time appropriately and not engaging in non-work related activities during paid time. These cases also show that employers can justify a termination for cause in cases of time theft, especially where there is a history of this behaviour. Not only is this because of the theft itself, but also because of the breakdown in the employment relationship.

Additionally, the recent case from British Columbia leaves the question open that if an employer counterclaims for time theft during a wrongful dismissal action, and the court finds that time theft occurred but it was insufficient to justify a wrongful dismissal, could an employer set-off the time theft damages from the wrongful dismissal damages? If this is the case, then the employee’s damages for pay-in-lieu of notice would be limited, despite being successful on the wrongful dismissal action.

What the caselaw does not say is that time theft is grounds for just cause termination whenever it occurs. Employers cannot forget their obligation to provide progressive discipline. Further, if too much time has elapsed since an employer discovers time theft before taking any disciplinary measures, an employee may have a good argument that the employer condoned or acquiesced to the behaviour. This would bar an employer’s argument that the misconduct amounted to just cause.

Where there is sufficient trust and honesty between the employer and employee, remote working can be productive. Working from home reduces commute time and reduces interruptions by others popping by at the office. At the same time, an employer does not have the same ability to supervise their employees when they are working remotely. Dishonesty can lead to an irreparable breakdown in the employment relationship. The fundamental key to any healthy employment relationship is to maintain strong levels of trust and honesty.

Written by Nicolas Guevara-Mann

[1] Besse v Reach CPA Inc., 2023 BCCRT 27.

[2] Ontario Public Service Employees Union v Ontario (Ministry of the Solicitor General) (White Grievance), [2020] OGBSBA No 98.