'The employer wasn't monitoring what this employee was doing or not doing': lawyer
“Anytime you are operating a business, part of your duty as an employer is to actively monitor your employees and what they're doing.”
So says Trevor Thomas, co-founder and partner at Ascent Employment Law in Vancouver, after a BC court overturned a decision that a worker should pay back wages she was paid for work not performed based on data compiled after the fact.
“Situations like that come up a lot because the employers aren't actively monitoring what employees are doing and setting the expectation of what is supposed to be done on a daily, weekly, or monthly basis,” says Thomas.
No written employment contract
Pro-Align Heavy Suspensions was a small business performing tire alignments for commercial vehicles. In August 2017, the company’s operating manager hired his common-law partner to be Pro-Align’s office administrator, bookkeeper, and controller.
The worker did not have a written employment contract, but two months later she wrote one up setting out the terms of her employment. She and the operating manager signed it on Oct. 15, 2017.
The worker’s common-law partner was her direct supervisor. She had a flexible work schedule and often worked remotely, performing some of her work on computer programs such as Quickbooks.
In September 2018, the worker and the operating manager separated. The worker continued to work at Pro-Align for another month and then took a medical leave of absence.
Ontario employers failed to pay back $9 million in workers’ wages in the 2021-22 fiscal year, according to data from the Ontario Ministry of Finance.
Reconstruction of employment history
In early 2019, the worker’s former common-law partner stepped down as operating manager and an individual who had been a director and passive investor took a more active role in the company. This investor tried to reconstruct the worker’s work history with Pro-Align in a spreadsheet that mostly used login and logout information in Quickbooks along with a review of the dates and times of emails sent on the worker’s company email account.
The investor determined that the worker had been paid for about 800 hours of work that she had not performed. Pro-Align filed a small-claims action seeking damages for the unwarranted payment.
The worker filed a counterclaim, arguing that she had started working for Pro-Align in August 2017 but she didn’t start getting paid until the employment contract was signed on Oct. 15. She sought damages for two months of unpaid salary, relying on a budget document that she had created at the time that showed entries on certain dates that proved she was working.
Pro-Align countered that the worker was not an employee during that period.
The trial judge found that investor to be generally credible, although he had no personal knowledge of the worker’s employment because he had not been actively involved with Pro-Align at the time. The judge also found that the worker was not credible and she exaggerated her role with the company.
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Burden of proof on employer
The trial judge also found that the burden was on Pro-Align to prove that the worker was paid for more hours than she actually worked.
The trial judge found that the Quickbooks spreadsheet was the main source of evidence, although the judge recognized that the spreadsheet had been compiled about 18 months later. The judge determined that the worker didn’t work any hours on the days with no hours recorded and no emails – 29 days for a total of 232 hours – and was overpaid for six hours on each day when less than the statutory minimum of two hours were recorded on the spreadsheet, which amounted to 31 days or 198 hours. Based on the spreadsheet, the worker was paid for 430 hours for which she didn’t work – about half of the 800 hours claimed by Pro-Align, said the trial judge. This amounted to $8,600.
“In court, evidence is key to proving or disproving a case, and here the employer was at a bit of a disadvantage because the evidence that they relied upon was created after the fact,” says Thomas. “The employer wasn't monitoring what this employee was doing or not doing on a daily basis, so the employer at the start was at a disadvantage.”
The trial judge also found that “on a balance of probabilities” the worker worked for Pro-Align from August to October 2017 and there was an oral employment contract in place. In addition, the budget document showed entries by the worker at the time that showed she performed work for Pro-Align during that period, said the trial judge.
The unpaid wages totalled more than $6,000, but the judge likewise applied the 50 per cent proportion due to concerns over accuracy of the records. This meant entitlement to $3,200 for unpaid wages.
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Employer dropped the ball on compliance
“I think what happened here is because the company was a startup, they were probably juggling a lot at once and the worker's employment didn't come up as an issue,” says Thomas. “It sounds like somebody dropped the ball on her employment, because of what they should have done is obviously been aware of and complied with the employment laws in [BC]”
“It all comes down to minimum entitlements; if somebody's performing work, then they’re entitled to a certain amount of pay,” he adds.
The trial judge subtracted the unpaid wages award from the overpayment damages and found that the worker owed Pro-Align $5,400 for work not performed but paid for.
The worker appealed on the grounds that the trial judge erred in finding that her employment contract was for an hourly wage, preferring the investor’s spreadsheet as evidence of her hours worked, and reducing her counterclaim amount by half based on an arbitrary assessment of the hours she had worked.
The BC Supreme Court (BCSC) found that the trial judge was free to accept any part of the worker’s testimony and evidence and, given that the judge found issues with the worker’s credibility, there was no overriding or palpable error.
A worker was entitled to wages for training that involved controlled hours and duties instead of just observation, the Alberta Labour Relations Board ruled.
Spreadsheet not accurate enough to completely rely on
As for the spreadsheet created by the investor, the trial judge considered it reliable because the information it contained “was derived from records created in the ordinary course of business” and the BCSC agreed that it was reasonable to consider it as evidence. However, the trial judge committed an overriding and palpable error in finding that the spreadsheet proved that the worker didn’t work on all the days with no entries on QuickBooks, as the budget document showed that she did work some of those days and the worker wasn’t required to login or logout of QuickBooks, said the BCSC, adding that the trial judge couldn’t accept the budget document as evidence that the worker worked before the employment agreement was signed and then not accept it to show hours she worked. In addition, the worker used other software in addition to QuickBooks, but these weren’t used in compiling the spreadsheet, the BCSC said.
The trial judge erred in finding that the worker did not perform the hours worked based entirely on the spreadsheet without comparing it to the budget document, so the award to Pro-Align could not stand, said the BCSC.
As for the amount of the worker’s counterclaim, the BCSC agreed that it could be called into question because of the problems with the reliability of the evidence. The burden to prove the counterclaim was on the worker and, while the budget document showed that she performed some work from August to October 2017, it wasn’t sufficient to prove how much, the court said. As a result, the $3,200 award to the worker for unpaid wages was sufficient, said the BCSC.
The award to Pro-Align for wages paid for hours the worker worked was overturned while the unpaid wages award to the worker was confirmed.
Pro-Align should have done more to establish and record expectations and performance that were connected to the worker’s pay to set up their claim better, says Thomas.
“As an employer you need to manage your people, and part of managing your people is being on top of what they're doing on a day-to-day basis,” he says. “That's great for the employer, because you can take that to the judge and say you set the expectation and she agreed to it, and here's how she failed to meet expectations.”
“And then that creates the situation for the employer to say, ‘We've paid her all this money to perform this work and she wasn't doing it.”
