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Employee forced to pay back wages for ‘time theft’ won’t be the last

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Remote work provides an irresistible temptation to some

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Near the beginning of COVID, I encountered considerable enraged backlash over a column I wrote noting that working from home could be abused and lead, in some cases, to time theft.

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After all, if employees can do whatever they want all day without supervision, pretending to be “working” from home (and taking their phones with them in case their employer calls), some might find it an irresistible temptation to conduct more pleasurable non-work activities when they are supposed to be working.

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After all, there are many activities more exciting than putting one’s nose to the grindstone for eight straight hours daily and all employees are not loyal or diligently assiduous.

That very issue arose in a recent decision, which made international news in light of the new working from home environment, before the B.C. Civil Resolution Tribunal in which Karlee Besse sued Reach CPA Inc., an accounting firm in Courtenay, B.C., for wrongful dismissal.

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Besse claimed unpaid wages and wrongful dismissal damages after a few months of employment. Reach responded that it terminated her because she engaged in time theft and counterclaimed for the wages it paid her for the period in which it claimed she was not working at all or, at least, not for the company.

On Sept. 20, 2021, Besse began working for Reach on the basis that she could work remotely from home performing work as a Chartered Professional Accountant. On March 16, 2022, the parties met to discuss some of her files, which Reach said were over budget and behind schedule, and the company placed her on a performance improvement plan. It became concerned about a timesheet entry respecting a file that she had not worked on so analyzed her data from its surveillance software, TimeCamp, tracking employees’ remote work, and found 50.76 unaccounted hours that she reported on her timesheet but which did not appear to be spent on work. She was terminated for cause based on the irregularities between her timesheet and the software usage logs.

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Besse argued that she found the program difficult to use but the TimeCamp video showed when an employee opens a document or accesses a client file, how long they had the document open or are in the file and captured the details of her activities, which Reach used to distinguish between work and non-work activities.

The Tribunal found that Besse did not have to take any steps to have TimeCamp differentiate between work and personal activity, once she was logged on, since it automatically recorded that.

Besse was unable to account for these 50.76 hours. The Tribunal found that that did not matter because the functionality made absolutely clear what she was doing. Besse argued that she printed out paper copies of client documents that were not captured by TimeCamp but the TimeCamp data showed that the time she spent printing proved that she could not have printed the large volume of documents she required to work in hard copy and, even if she had been working in hard copy, she would have had to enter the information into the software, which she did not do.

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Whereas Besse, at the hearing, argued that she just told her employer at their videoed meeting what it needed to hear, hoping that it would provide her support, at the meeting, she had said: “Honestly, I don’t really think I need time to look at it, it’s pretty … like you can’t fight the time. Clearly, I have plugged time to files that I didn’t touch … for that I am really sorry.”

The Tribunal made a point which is true in all remote employment relationships in making its decision.

“Given that trust and honesty are essential to an employment relationship, particularly in a work environment where direct supervision is absent, I find her misconduct led to an irreparable breakdown of her employment relationship with Reach … and it had just cause to terminate her employment,” the tribunal ruled.

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Having found that Reach had just cause for terminating her for time theft, it ordered her to repay the value of the 50.76 hours, based on her annual salary, or $1,506.34.

This is the first case reaching a hearing in which an employer sued an employee for time theft during COVID.

Does this mean that, if an employee is not working straight out from 9 to 5, but makes the odd personal phone call or dallies on the internet, the employer can sue them? Surely not. But if an employee is submitting specific timesheets claiming to do particular work in the way that, for example, a lawyer dockets or a factory worker clocks in and out, thereby misrepresenting what they are doing and cheating their employer, that would be time theft.

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The same applies to employees remotely working who purport to be at their desk and are found to be, instead, at the gym, doing unrelated work or otherwise deceiving their employers for significant periods of time. It is certainly an interesting counterclaim that an employer could make or threaten to make against an employee fired for doing just that.

Is slacking off cause for discharge? No. And certainly not without warnings. But the court will distinguish between firstly, lassitude, secondly, deliberate misconduct, such as taking an afternoon off or doing something other than working, which would warrant at most a warning, and thirdly, deliberate fraud, such as specifically claiming to be in one activity when you are knowingly in another, such as Besse had done.

As more employers have purchased surveillance software to supervise employees working either fully remotely or in hybrid work, this could become a future source of lawsuits as well as dismissals particularly as employers become more embattled economically.

Howard Levitt is senior partner of Levitt Sheikh, employment and labour lawyers with offices in Toronto and Hamilton. He practices employment law in eight provinces. He is the author of six books including the Law of Dismissal in Canada.

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