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This general legal information (not legal advice) is subject to change, and there may be exceptions based on your specific circumstances. You should obtain independent legal advice before taking any action which may impact your legal rights. If you are an employee or an employer and need legal advice regarding discipline or termination of employment surrounding time theft, an OA lawyer will be pleased to assist you with your situation.

 What is Time Theft?

Time theft typically occurs when an employee is paid by their employer for time in which the employee did not work. Time theft can be difficult to detect, depending on the size and structure of the employer’s operations. For example, difficulties can arise when employees work remotely or when employees are entrusted to work without any substantial means of supervision or oversight. While there are cases where time theft is subtle or unintentional, there are cases where employees intentionally commit time theft. Difficulties in investigating instances of time theft can, depending on the circumstances, lead to additional considerations such as privacy concerns.

Time theft can occur when an employee does not carry out their job duties during the hours their employer pays them to do so. In other words, when an employee is physically (or virtually) at work and expected to be working, but instead, the employee takes part in unauthorized non-work-related activities. Examples of this can include: employees taking longer than scheduled or unauthorized breaks; employees texting on their personal phones; employees using their work computer for non-work-related purposes; employees sleeping; or even employees simultaneously working several (virtual) jobs at once.

Time theft can also occur when employees are not physically (or virtually) at work but are scheduled and assumed to be. This might include employees leaving work early or arriving to work late, but recording normal hours being worked, not clocking out or appropriately adjusting their hours worked when leaving for appointments. Some instances of time theft mentioned lead to the falsification of hours worked. However, at times employees may be more intentional and blatant with their time theft. Rather than taking an extended lunch break or leaving the office for a short appointment, the employee’s sole intention might be to be paid for hours not worked. Some examples of this form of time theft may include having a co-worker clock in and out for an employee (who did not work), or an employee submitting hours of work to their employer that are completely false.

Time theft can still be a major issue even when the theft is in small increments. Over the course of a year, 15 minutes or so of time theft from time to time can become a significant issue—and expense—for an employer. Whether intentional or not, time theft has been considered a serious form of misconduct as it can damage the trust between employer and employee, which is essential to the employment relationship.[i] Employees found to be committing time theft may be subject to discipline, including up to termination.

What if Time Theft is Condoned by an Employer?

Condonation occurs when an employer is aware of an employee’s behaviour, but allows it to continue. Even if an employer is against a behavior that they are aware of, if they fail to address it, the employer will likely be found to have implicitly condoned it. Courts place the burden on the employer to establish and enforce rules and discipline in the work place. To avoid the inference that an action, such as time theft, is condoned, employers must warn the employee that time theft is unacceptable and that further instances will warrant disciplinary action. However, time theft will not be considered condoned behaviour if the employer takes a reasonable amount of time to conduct an investigation, or waits until the end of the working day to discuss the employee’s conduct.[ii] In addition, if a past supervisor condoned an employee’s previous conduct, new supervisors must show evidence of bringing that condonation to an end prior to terminating or disciplining an employee.[iii] The onus of proving condonation is on the employee, however, the employer must show evidence that the employee’s conduct was addressed and therefore not condoned.

Unionized Employees: Termination Depends on the Circumstances

The decision of U.N.I.T.E.-H.E.R.E, Local 75 v. Fairmont Royal York Hotel provides for a cautionary tale for unionized employers hoping to terminate an employee for time theft. The employee was terminated for time theft, based on the employer’s claim that the employee spent an “excessive” amount of time each shift on a workplace computer over a span of 30 days to access the internet for personal use.[iv] While the employer’s Code of Ethics allowed for limited personal use of their communication tools, the employer argued that the employee’s actions were impacting his ability to perform his work-related duties. Furthermore, the employee’s actions were a fundamental breach of trust, as the computer was located at an unsupervised location requiring use of a swipe card for access. In short, the employee was paid each shift for a significant amount of time where that employee did not complete any work.

The Arbitrator ultimately determined that the termination of the employee was without just cause, and a violation of the Collective Agreement, determining that the employer’s decision to terminate was an excessive response to the employee’s misconduct. The employee had a clean disciplinary record, worked for the employer for 18-years, the time theft did not cause any quantifiable loss to the employer, and the employee was remorseful of his actions.

Similarly, in the case of Zehrs Markets Inc. v. U.F.C.W, Local 175 & 633, an employee working at a Zehrs salad bar took extended breaks and lunches, contrary to the Zehrs Employer Policy.[v] The employer spent months monitoring the employee’s behaviour, and then terminated the employee. The Arbitrator determined that, while time theft was committed by the employee, the employment relationship was not “irretrievably broken” and rehabilitative potential was still possible given the employee’s 22-year tenure with no disciplinary history, and the store having a “relaxed approach” to the Employer Policy on breaks and lunches.[vi] The Arbitrator came to this conclusion even though the employee was not willing to admit or recognize any wrongdoing when confronted with evidence until later on in the hearing. In the end, the grievance was allowed, but the Arbitrator reduced the penalty to be a suspension without pay.

The above noted arbitral decisions suggest that while time theft is a significant form of misconduct in the absence of any mitigating factor, arbitrators are seemingly hesitant to side with employers in terminating unionized employees for time theft when lessor penalties are more fitting. In deciding cases surrounding time theft, arbitrators assess the employee’s conduct while also considering aggravating and mitigating factors such as the employee’s past disciplinary record, the employee’s duration of employment, whether the employee expressed remorse for their actions, if the employee committed any illegal acts during their alleged time theft, the employer’s enforcement of time theft, and the potential for rehabilitating the relationship of trust with the employer.[vii]

Non-Unionized Employees: Employers Have More Leeway in Termination

Under Ontario law, a provincially regulated employee’s job is normally not protected, unless the reason for termination falls under one of a few narrow exceptions, such as if the termination is on the basis of discrimination pursuant to the Ontario Human Rights Code, or arising out of reprisal under certain pieces of legislation.

If an employer finds that a non-unionized provincially regulated employee has committed time theft and wishes to terminate the employee, the employer has several options. An employer can terminate the employee for committing time theft on a without cause basis if the employer is not confident that the time theft under the particular circumstances amounts to cause for termination. However, employers typically prefer to terminate with cause as that often reduces the payment owed to the employee at termination.  Common law notice (or pay in lieu of notice), Employment Standards Act, 2000 (ESA) minimums (such as termination pay and severance pay, if applicable), and/or other entitlements arising from the employment agreement may be owed at termination. If an employer alleges cause when there was none, the employer may open themselves up to further damages. An employer should contact an employment lawyer prior to termination in order to ensure that the employee is properly terminated and any legal risks to the employer are minimized to the extent possible.

If the employee is federally regulated then the employer should consider whether the termination for time theft will run contrary to a claim for unjust dismissal under the Canada Labour Code.

If you believe that any of these circumstances might apply to you, whether you are an employee or employer, an OA lawyer would be pleased to assist you with your situation.

O’Neill Associates is proud to support students from the Bora Laskin Faculty of Law (Lakehead University, Thunder Bay) through the school’s unique Integrated Practice Curriculum (IPC) Program. The IPC, a Bora Laskin variation of the “articling” program students complete at most other law schools, matches students with law firms to work side-by-side with experienced lawyers for one full semester during the third and final year. This article was written by Nic Leblanc who will be completing his third year IPC with OA in the winter of 2024.

[i] Retail, Wholesale Department Store Union v Yorkton Cooperative Association2017 SKCA 107 at paragraph 27.

[ii] CCL Custom Manufacturing v Barrett, 2000 CanLII 13149 (ON LRB) at paragraph 28.

[iii] Royal Canadian Legion Branch 158 operating as Royal Canadian Legion Hugh Allen Branch # 158 v Timothy Saunders, 2020 CanLII 35216 (ON LRB) at paragraph 20.

[iv] U.N.I.T.E.-H.E.R.E, Local 75 v. Fairmont Royal York Hotel, 2012 CarswellOnt 2511 [Unite].

[v] Zehrs Markets Inc. v. U.F.C.W, Local 175 & 633, 2006 CarswellOnt 9907.

[vi] Ibid at paragraph 94.

[vii] Unite, supra note 4 at paragraphs 14-18. See also International Union of Elevator Constructors, Local 50 v Otis Canada, 2017 CanLII 53048 (ON LRB) at paragraphs 89-91.