“Time theft” describes situations where an employee is paid for time they knowingly misrepresent as having been worked. Time theft may take many different forms. It could include longer-than-scheduled breaks, misrepresenting or altering records (such as timecards), or completing personal matters on paid company time. It received renewed attention during the pandemic as more employees worked remotely.

Where an employer becomes aware that an employee is engaging in time theft, there are several options that may be available:

1. Terminate the relationship for cause

Time theft may, in the right circumstances, allow an employer to terminate the relationship for cause. To establish cause, employers are required to prove an irreparable breach of trust which renders ongoing employment untenable. Theft – combined with the intentional dishonesty that is likely to underpin acts of time theft – may well meet this threshold. Where an employer is able to show an employee has been dishonest (to improperly further their own financial interest) the court is likely to have little sympathy.

That said, context will always be important. Any decision to terminate for cause must be assessed carefully. Among other things, the employer should be sure that it can prove time theft. Evidence will need to be marshalled and it may make sense to meet with the offending employee to provide an opportunity to address the situation (perhaps as part of an investigation into the matter prior to dismissal). In addition, the employer should consider whether other staff have likewise engaged in similar behaviour and, if so, how this was addressed. Consistency in approach is important and any divergence in this regard may undermine a successful assertion of cause for dismissal.

2. Seek repayment

Depending on the extent and duration of the time theft at issue, in more severe cases, it may make sense (in addition to ending the relationship) to consider seeking damages from the offending employee for breach of contract or intentional misrepresentation.

Prior to taking this step, however, an employer will want to consider the time and effort that may be involved in pursuing the matter versus its odds of recovery. That said, even where odds of recovery appear poor, there may nonetheless be a business rationale to pursue the matter – sending a clear message that such behaviour will not be tolerated.

A cautionary tale

In March 2024, the BC Civil Resolution Tribunal (the “Tribunal”) dismissed three individual claims brought by a trucking company against former employees seeking damages for time theft. In total, the applicant employer sought approximately $14,000.

The employer alleged that it incurred losses as a result of the employees overstating working hours on daily time sheets that were submitted to the company and subsequently paid. This alleged misconduct took place over a prolonged period.

Each of the respondents asserted that the company’s claim was retaliation for bringing an overtime wage complaint to the provincial Employment Standards Branch.

In dismissing the company’s three claims, the Tribunal noted that to be successful in seeking damages for time theft, an employer must:

1. establish that its employee breached the term of their employment contract to report hours honestly and with reasonable accuracy; and
2. prove its claimed damages (i.e., establish the amount is asserts was overpaid on a balance of probabilities with evidence that is ‘clear, convincing and cogent’).

The Tribunal accepted that the company had informed its staff that they must accurately note their start and end times on their daily time sheets to receive payment (and as such it was a term of the parties’ employment relationship to be accurate and honest when completing time sheets). It concluded, however, that the company had neither proved a breach of this requirement nor, even if there had been, what damages had been incurred.

The Tribunal noted, among other things, that: there was an accepted practice of rounding calculations on time sheets to the nearest quarter-hour; the company sought improperly to rely on a tracking system within its trucks as representing the entire working day (thus ignoring work performed within the yard either side of operating trucks); and the company’s representatives reviewed and issued payment on the submitted timesheets without issue over many months.

Conclusion

Time theft can be a significant concern and may allow an employer to summarily terminate the relationship and/or consider recouping improperly issued amounts. The key in all circumstances, however, will be to clearly communicate expectations to staff at the outset of the relationship, manage the situation proactively and consistently, and marshal ‘clear, convincing and cogent’ evidence to prove both time theft and the associated quantum of loss.