Employment & Labour Law
Establishing “Just Cause” for Dismissal in Time Theft Cases
March 21, 2023
With many roles incorporating work-from-home or hybrid models, the relationship between employees and employers is changing. Arguably, time theft is easier to commit than ever. It is not only a violation of workplace ethics but also a significant legal issue. This blog aims to provide an overview of the law on time theft in Alberta, including a discussion of a recent decision in British Columbia that considered time theft in light of the test for “just cause” for dismissal.
What is Time Theft?
Time theft refers to the practice of employees being paid for time they did not actually work. It can take many forms, such as employees taking longer breaks than allowed, arriving late or leaving early, or falsifying time records. Time theft can have significant financial consequences for employers, as they are paying employees for time they did not work, resulting in lost productivity and increased labour costs.
Time Theft and Dismissal
In Alberta, employees who commit time theft are often terminated with “just cause”, which exempts them from providing notice or severance pay. Just cause is a legal standard intended to protect employees from arbitrary or unjust terminations. The legislation that outlines the requirements for employers when terminating an employee is the Employment Standards Code. Under the Code, there is no specific definition of just cause. However, the courts have outlined a variety of factors to consider.
The Bar for Establishing “Just Cause”
The test for “just cause” dismissal in Alberta has been established through a series of cases heard by the courts and arbitrators. While the exact test may vary slightly depending on the circumstances of each case, some key factors are typically considered when determining whether a dismissal for just cause is justified.
One of the earliest cases that established the test for just cause dismissal in Alberta is McKinley v. BC Tel. Generally, the Supreme Court of Canada defined the test as an “assessment of the context of the alleged misconduct” and an examination of “whether the employee’s dishonesty gave rise to a breakdown in the employment relationship.” The employer must establish “deceitful conduct” on a balance of probabilities. In this context, the Court identified the following factors to be considered:
- Did the employer provide the employee with sufficient notice of the misconduct and an opportunity to improve?
- Was the employee’s misconduct serious enough to undermine the employment relationship?
- Did the employer conduct a fair and impartial investigation into the employee’s misconduct?
- Did the employer apply progressive discipline where appropriate?
An Alberta case that adopted and applied the contextual approach developed above was Poliquin v. Devon Canada Corporation in 2009. In this case, the Alberta Court of Appeal considered the types of employee misconduct that can give rise to a just cause for dismissal, specifically dishonesty. The Court noted that:
…dishonesty in and of itself does not automatically give rise to just cause for dismissal and therefore summary dismissal. Instead, whether an employer has just cause to dismiss an employee for dishonesty generally requires a broad contextual analysis.
Therefore, in order to dismiss an employee with just cause as a result of dishonesty, the employer must establish that the conduct was serious enough to cause a breakdown within the contextual circumstances of the employment relationship. The courts have recently considered whether time theft can meet this standard.
British Columbia Tribunal Allows Dismissal of Employee for Time Theft
In the recent case of Besse v. Reach, the British Columbia Resolution Tribunal (the “Tribunal”) concluded that an employee’s time theft constituted just cause to terminate their employment.
The case involved an accountant employee that worked for a CPA firm. On September 20, 2021, the employee signed an employment agreement that allowed her to work remotely. Over the next year, the employee met with the firm to discuss performance as there were file management issues, and she felt unproductive. A performance improvement plan was implemented.
In March 2022, it was discovered there were timesheet entries that did not appear to be related to work. The employer and employee met to discuss the entries, and the employee provided no explanation. The parties met again, and the employee was terminated.
The Tribunal Member considered the evidence regarding how work was tracked in TimeCamp (an electronic monitoring software). She concluded that “TimeCamp likely accurately recorded Miss Besse’s work activity and that there were 50.76 unaccounted hours recorded on Miss Besse’s timesheets.”
She then turned to whether the alleged time theft could constitute a “serious breakdown of the relationship” based on the above test. She found that it did “[g]iven that that trust and honesty are essential to an employment relationship, particularly in a remote-work environment where direct supervision is absent.” As a result, she found that the employee was not entitled to her notice of dismissal or her severance pay.
Although this case was not heard in Alberta, it could signal how the courts could treat time theft in a remote work environment. It may be that the lack of direct supervision gives rise to a unique relationship where time theft can more easily constitute just cause.
For Trusted Advice Regarding Just Cause Dismissal, Contact DBB Law
Dunphy Best Blocksom LLP is one of Calgary’s leading labour & employment law firms. The skilled employment lawyers at DBB Law provide constructive advice on all aspects of the employer-employee relationship. Our firm regularly advises employers on employee terminations and whether an employee can be dismissed for just cause and time theft.
DBB Law also provides top-tier legal services in a full range of practice areas, including family law, business and commercial law, civil litigation, construction law, real estate and property, tax law, and wills, estates, and trusts. To schedule a confidential consultation with a lawyer, call 403-265-7777 or reach out online.