Time theft in workplace

By Ellen Low

Law360 Canada (September 11, 2023, 1:19 PM EDT) --
Ellen Low
Ellen Low
Technological advances continue to reshape the workplace bringing with it new challenges for employers and employees.

How we work is constantly changing, and there are issues and consequences that are not always anticipated, some of which give rise to new applications to old legal maxims. Take, for example, time theft. Time theft is an employment-law crime as old as time itself. In the past, time theft occurred when Employee A asked Employee B to punch them out of the company timeclock at their usual quitting time, when in fact, they left minutes or hours earlier. As GPS vehicle tracking became more common, time theft cases took the form of employees logging more hours that were available in any one day, starting the clock from their driveways rather than job-site, or forgetting to shut off the clock while taking a short nap.

But, a more modern, and relevant, application recently arose at the British Columbia Civil Resolution Tribunal (BCCRT).

In Besse v. Reach CPA Inc. 2023 BCCRT 27 the BCCRT not only accepted an employee’s for-cause termination, but ordered the now former employee to compensate the employer for time theft. The case serves as a stern warning to all those working remotely.

In this case, an employee was hired as an accountant in September 2021. She worked remotely. Her company installed a time-tracking program called TimeCamp on her work laptop in February 2022. A short time later, she met with her manager who informed her that he was concerned that some of her files were over-budget and behind schedule. They set up a performance improvement plan, but the company later became concerned about a timesheet entry the employee submitted which related to a file she had not worked on. Her TimeCamp data was analyzed and 50.76 unaccounted for hours were discovered.

On March 29, 2022, the manager questioned the employee about unaccounted hours, but she could not provide an adequate explanation. The employer, backed by video evidence, alleged that the employee engaged in time theft by recording work time in her timesheets that was not tracked by TimeCamp and was not work-related.

The company terminated the woman’s employment with just cause. As such, she received no termination or severance pay. In response, she filed a complaint with the BCCRT, seeking back pay and one month of severance. Her former employer countered, claiming that the termination for cause was justified in light of her conduct. They also sought to recover 50.76 hours of wages paid to the employee which were not justifiable.

The BCCRT decided in favour of the company. In doing so it stated:

Time theft in the employment context is viewed as a very serious form of misconduct (see for example, Retail, Wholesale Department Store Union v. Yorkton Cooperative Association 2017 SKCA 107 at paragraph 27. Given that trust and honesty are essential to an employment relationship, particularly in a remote-work environment where direct supervision is absent, I find Miss Besse’s misconduct led to an irreparable breakdown in her employment relationship with Reach and that dismissal was proportionate in the circumstances. 

It ordered the former employee to pay $2,603.07 “in debt and damages for time theft” along with court costs.

This decision demonstrates that where an employer can show evidence that an employee has falsified records, in our view, especially in a remote working environment where an additional degree of trust is required, the employer will likely be justified in terminating an employee with just cause.

The tribunal clearly laid out the consequences: Not only can a worker be terminated for cause for effectively lying about their hours, but they may also have to repay the employer for the value of time billed for which they did not actually work. That is a pretty significant warning to employees that they may need to less laissez-faire about what they are doing during the workday and to be sure they are accurately tracking and reporting their time.

The takeaway from this is that there is going to be no tolerance with respect to time theft. This is a quite positive outcome for employers who are contemplating a remote work arrangement.

In the BCCRT decision there was some suggestion that the employee either did not know that her time was being monitored, or that she did not understand the software. Note that in Ontario, a company of more than 25 employees must inform those employees of the nature and extent of any electronic monitoring. The legislation, and case law, is clear that surreptitious monitoring will be subject to scrutiny and in some cases may not be admissible as evidence in court.

In a related issue, the rising use of AI chatbots raises potential time-theft questions. This innovation allows users to have humanlike conversations with a chatbot such as ChatGPT. It can respond to questions and compose written content such as emails, social media posts and blog posts.

Insider.com recently reported some workers have been secretly using chatbots to help improve their productivity. Chatbots can write compelling posts in a fraction of the time, but, they have been known to produce false information known as “hallucinations.”

Insider.com reported that one worker found that using a chatbot for certain coding tasks saved him up to 15 hours a week. However, instead of doing more work, he used the extra time to take a class unrelated to work.

“I’m remote,” he told Insider.com, “They can’t tell when I’m working and when I’m not. I can ChatGPT my way through solving something in a couple of hours, and then just take the rest of the day off and they won’t know.”

The secret use of AI raises an interesting and new ethical dilemma and whether the workaround is time theft will depend on how the employee is getting paid.

We would argue it would be time theft if the employee was compensated in an hourly basis and created a cheat code to do the work faster then took time off to pursue a non-work-related activity while representing to the employer that he is actually working all those hours.

In short, if a worker is getting paid in exchange for eight hours of work, they need to do eight hours of actual work, not their subjective value of eight hours. However, if they are getting paid on a project-by-project basis, piecemeal, incentivized productivity basis or any other metric rather than just straight time, then using some kind of shortcut may be acceptable and mutually advantageous.

In terms of AI chatbots and time theft, employers will be well advised to consider implementing a policy limiting or describing its acceptable use. Aside from issues of productivity, AI chatbots raise very realistic fears about inadvertent devolution of trade secrets or relying on error-prone responses from a chatbot in sensitive responses.

Employers would be advised to critically consider how AI can, and cannot, be used in their particular workplaces then to create clear and express policies to prevent confusion about time reporting, payment and time theft.

Ellen Low has been working exclusively in employment and human rights for over a decade. She obtained her law degree from the University of Ottawa, articled at Gowlings and practised as a partner with a boutique Toronto employment law firm and founded her own firm, Ellen Low & Co. Employment Law, in 2018.

Photo credit / bodu9 
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