Legal Implications of Time Theft in Remote Work: A BC Tribunal Case Study

Understanding Time Theft in Remote Work Settings

The topic of ‘time theft’ in the employment context has been a hot button topic of late, especially given the increased prevalence of remote work since the onset of the pandemic. Discussion of the issue will only increase following a B.C. tribunal’s ruling that a terminated employee be required to return wages due to time theft while on the job.

BC Tribunal Ruling: A Case Study on Time Theft

In Besse v Reach CPA Inc., an accountant who worked from home was terminated for cause based on evidence of time theft. Thanks to the time tracking software on a work laptop, the employee was found to have significantly represented her worked hours. The tribunal determined there was just cause for termination and upheld the employer’s counterclaim for unearned wages.

This is unquestionably a very welcome decision for many employers. While some may also see it as a reckoning of the remote work wave that has flooded workplaces everywhere, there are some unique considerations around this case that any interested parties should keep in mind.

The Legalities of E-Monitoring Employees

As covered in previous articles, e-monitoring options can be a valuable tool for employers in appropriate circumstances, especially with respect to work-from-home employees. This is particularly true in instances where employers may have reason to believe there could be productivity issues or discrepancies in recorded work time. The employer in this case certainly had such concerns and the employee was apprised as to the possibility of e-monitoring (although apparently, given her actions, she didn’t take this possibility very seriously!).

In a situation where productivity is severely impacted by working from home, or an employee is not fulfilling their obligations, e-monitoring data can provide evidence in support of disciplinary action from the employer, up to termination for just cause. This decision has now also opened the door for employers to potentially recover unearned wages where e-monitoring potentially dishonest employees.

This additional possibility may encourage employers to implement e-monitoring measures in order to catch wrongdoers and dissuade potential misconduct from others. Of course, it will remain vital that e-monitoring be used in a responsible, transparent manner, and not become a substitute for proper performance management techniques.

 Employment Agreements and Time Theft

Each employment case has its own unique variables, and this tribunal case is no different. Originally brought to the tribunal as a wrongful dismissal claim by the employee, the employer then filed a counterclaim seeking renumeration for time theft. This claim was driven by discrepancies between e-monitoring activity logs from the employee’s computer and submitted timesheets.

Prior to the tribunal decision, the employer had recovered some of the overpaid wages by withholding funds from the employee’s final paycheque. This approach would generally not be permissible under the BC Employment Standards Act, but was allowed here by the tribunal because the employee was ESA-exempt due to the nature of her position.

The employer also claimed part of this withheld amount was repayment of an advance (for the purchase of office equipment and payment of the employee’s professional fees). The agreement to pay this advance was made to the employee under a 2nd employment contract signed after the start of her employment. The employee argued this 2nd agreement was unenforceable based on lack of fresh consideration. Ultimately, the tribunal relied on Rosas v. Toca, 2018 BCCA 191 to find that fresh consideration was unnecessary for the parties to enter into the revised agreement. The reasoning behind this part of the decision is rather surprising given that recent case law has suggested that Rosas will not apply in the context of a revised employment agreement (although it is possible there was fresh consideration for the 2nd agreement stemming from the employer’s provision of the advance – this is not entirely clear from the facts provided in the decision).

Key Takeaways

  • E-Monitoring can be a great employer tool but it’s not a cure-all for poor employee management
  • Unilateral withholding of employee wages will generally not be permitted, even in circumstances of time theft
  • Employers should be cautious not to rely on amended employment contracts unless fresh consideration is given
  • All of these approaches can create unexpected risk for employers – it is best to seek legal advice before implementing any such approach or before taking any irreversible actions

Concerned about time theft in your remote workforce? Reach out to Boughton Law’s Employment Group for expert legal counsel and proactive solutions.