Loss prevention versus employee rights: 'Context is very important, and you need to look at aggravating factors and mitigating factors as well'
Amazon has decided to reinstate metal-detector screening and personal phone registration at its U.S. warehouses, reigniting a longstanding debate about workplace theft prevention.
The measures were suspended during the pandemic, and are necessary to secure inventory and maintain safety, Amazon has said. However, the measures are also controversial, as employees have raised concerns and even sued for issues such as standing in line after shifts to pass through security, unpaid.
As Patrick Benaroche, senior partner at Stikeman Elliott in Montreal, explains, dealing with employee theft in Canada isn’t straightforward, and employers should strive to strike a balance between security, fairness and legal procedure.
Balancing data collection and employee morale
Amazon's case reflects a common employer challenge: how to balance loss prevention with respect for employee rights.
Amazon's phone registration effort is one example of employers collecting personal data for theft control; as reported by Bloomberg, the measures will involve employees sharing six digits of their serial numbers and placing a sticker on their devices.
In Canada, such actions are governed by privacy and human rights laws.
“The employer is allowed to maintain safety and security in the workplace. In fact, it's an obligation,” Benaroche states. “Where we get into a gray zone is when employees are sharing personal information, and what the employer is doing with that information.”
Informed consent by employees
The large-scale screening methods employed by Amazon in the U.S. may not fly under Canadian employment law scrutiny, so employers should be cautious when considering these measures, according to Zoya Alam, employment lawyer at Pallett Valo in Mississauga, Ont.
“Some of those seem very extreme under Canadian employment law. They may not be able to apply such screening methods in their workplaces in Canada,” she says, explaining that screening procedures involving employee devices will need to comply with provincial privacy legislation – therefore, informed employee consent and clarity on how data is used are paramount.
“They were screening employees’ devices, for example, reviewing employees' devices. You might run into privacy law issues in Canada. For example, some provinces have stricter privacy legislation than other provinces,” says Alam.
“There has to be informed employee consent. You have to be clear about how data is being used, collected and retained, all of that, before you start retaining any of that kind of data.”
Even if a device is used for work, that doesn't automatically give the employer access, Alam warns.
“There’s sometimes an argument that if the employee is using the device for work-related purposes, then maybe the employer has a right to information on that device,” she says.
“But all of this sort of has to be taken into consideration before screening processes ... can be implemented."
Employee theft, surveillance and privacy law in Canada
As seen in Amazon's policy rollout, companies may feel pressured to monitor employee behaviour more closely.
Yet privacy laws in Canada set clear boundaries. Employers must be cautious when deploying tactics such as hidden cameras and other types of surveillance, and should consider them only as last-ditch options if other efforts at gathering evidence have failed, Benaroche says.
“It is permitted if no other means of securing that evidence is available. Otherwise, to use hidden cameras unbeknownst to employees could be seen as a violation of their Charter rights and an unjustified intrusion on their privacy," he warns.
“It's not routinely allowed, and you can't just go around and have hidden cameras when employees are not aware of it. But if there is absolutely no other way to do it and there is a serious problem to correct … then the courts allow that type of evidence, even though one could argue there was a kind of invasion of privacy component. So it's very exceptional, and it's very rigorously monitored by the courts.”
Don’t sacrifice employee trust for employee control
Amazon faced criticism from employees who waited up to 25 minutes after clocking out to clear security, which some courts ruled was legally permissible without pay. But legality doesn’t always align with good practice, Benaroche points out.
“The legality of it doesn't address necessarily the HR component and the morale issue that is created when employees feel they are being cheated,” he says. Rather, employers should aim for a balance between morale and legal procedure.
“If they look at it with the objective of trying to strike a balance, as opposed to, ‘Well, we have legal rights, we're protecting against theft, and so therefore we're within our rights to do it’ – yes, that may be the case, but you may be having to absorb a cost indirectly, through employee frustration.”
Investigations into workplace theft
When suspicion arises, the investigation process must be thorough, lawful, and transparent, Benaroche emphasizes. He also reminds employers that employees still have a duty to cooperate.
“All employees have an obligation to cooperate as part of their duty of loyalty,” he says.
“If their employer is conducting an investigation on a theft problem, then they are normally required to participate in that investigation, of course, assuming it's done during working hours.”
However, Benaroche stresses that cooperation in an investigation does not imply guilt, which means gathering sufficient evidence is critical.
“An employer can confront an employee whom they suspect of stealing and get the employee's version,” he says.
“Now, if they don't have more than that, it's risky, because the employee can simply deny it, and then the employer doesn't have much more to go on other than their suspicion.”
Alam adds that due process must also be built into any investigation into employee theft.
“If you have surveillance, or you've got a complaint, you have to review all of that,” Alam says.
“Put the allegations to the employee, give the employee a chance to respond, get all of the facts before you make any decision.”
Termination not always the outcome for employee theft
The assumption that employee theft leads to automatic dismissal is outdated, notes Benaroche.
Amazon's return to screening may suggest a zero-tolerance stance, but Canadian courts consider broader context.
“We don't move to automatic termination anymore. The context is very important, and you need to look at aggravating factors and mitigating factors as well,” Benaroche says.
“For example, how long has the employee been working there. What are the circumstances that led the person to theft? Is it because of duress? Is it because of dire need? Dire circumstances?”
Even with proof of misconduct, he says, dismissal must be justified in terms of broken trust – “It has to be looked at and analyzed and seen as, is the conduct one that immediately severs the trust relationship that must exist between an employer and an employee.”
Alam emphasizes proportionality as a key metric when considering discipline: “Whatever disciplinary measure you take, it has to be proportionate to what the act was like. Any act of misconduct or disobedience, you have to first do an investigation.”
Developing fair and effective employee theft policies
For Canadian HR professionals, prevention is as critical as reaction – comprehensive workplace policies reduce ambiguity and ensure consistency, and as Benaroche states, that starts with employer accountability.
“Firstly, employers should be fully aware of the laws that are out there protecting employees and protecting personal information and privacy and human rights,” he says.
Second, he stresses communication: “A well drafted, comprehensive policy on what is expected from employees and what they can expect in return from their employer, both as to content and process when these types of delicate situations come up, is helpful, because everybody can follow the same rule book.”
Preventing discrimination in screening and discipline
Screening measures and disciplinary decisions must also be free from bias – Alam stresses the importance of consistency in policies and procedures so no employee feels they are being singled out.
“You want to make sure that you're not being discriminatory in terms of who's being screened, how they're being selected, those kinds of things,” she says, “whatever disciplinary action you take, again, is proportionate and not discriminatory in any kind of manner.”
This consistency should be carried through to all instances of theft or suspected misconduct – as Alam explains, even minor incidents should be addressed through policies and not assumptions; employers should be guided by policy, not instinct.
“So having a clear policy in place would be helpful as well in dealing with those kinds of cases," she says.
“Ensure that you have policies in place that would that either outline a code of conduct or provide grounds for discipline.”
