‘Providing the employee with an opportunity to give an explanation is key,’ says lawyer
An Ontario court has upheld the dismissal of a long-term employee for time theft and dishonesty during the subsequent investigation.
The worker was employed at a facility in Toronto that manufactured frozen dough and baked products for three affiliated companies owned by Fiera Foods Company, since 2005.
All employees at the facility were required to punch timecards when they entered the facility at the start of their shifts and when they left at the end. There were several stations where timecards could be punched, and there were video cameras above the stations. The cameras operated on a different system than the punch clock software and their time stamps varied by a few minutes.
Employees were warned not to punch anyone else’s timecard or have anyone else punch their own. Fiera also had a business values and ethics policy that required employees to ensure their timecards were accurate, complete, and truthful. The policy wasn’t distributed to employees, but it was posted throughout the facility.
When the worker became a lead hand in 2010, he studied all the company policies. He also didn’t want to package products that were made in violation of health protocols, so he told a supervisor about his concerns. According to the worker, he was told to mind his own business. He didn’t report any violations to health inspectors or tell the company’s owners, and he stopped reporting his concerns by 2015 or 2016.
Time theft allegations
In March 2018, Fiera received an anonymous tip that the worker and a co-worker who worked the same shift were engaging in time theft by punching each other’s timecards so it would appear they were present for their entire shift. Management investigated by reviewing the punch times recorded in the software and comparing them with footage from the time clock cameras.
The video footage showed that, on Feb. 20 and 22, the worker was alone at a punch clock station at the times that both his and the co-worker’s timecards were punched in. The co-worker was at the punch clock both times when the worker’s and his timecards were punched out for the day. On Feb. 21, both employees punched in at the start of their shifts, but the co-worker was alone when both of their cards were punched out at the end of their shifts.
Management interviewed the worker and the co-worker, together as well as separately. Both denied that they had done anything wrong, claiming that it would have been impossible for them not to have been at work at the same time because they worked in different places. However, management knew that the layout of the facility could allow one employee to cover two production lines at the same time.
Management met again with the worker and showed him the video footage. The worker became angry and said the evidence was fake. He later said he meant that the footage was unclear that he was punching someone else’s card, as it didn’t show the cards he was swiping and the different time codes between the video cameras and the punch clocks made them unreliable. He also suggested that he was punching his timecard twice at the relevant times.
On March 21, management met again with the worker and asked for an explanation. The worker again denied doing anything wrong and suggested that he was being framed because he had been discussing with other employees the possibility of starting a union. Management was unaware of the discussions.
Employee termination
Fiera management determined that the worker’s time theft and dishonesty during the investigation damaged the employment relationship beyond repair, so it terminated his employment on March 23.
The worker sued for wrongful dismissal, claiming that his termination was retaliatory for the earlier complaints he had made about health violations and the discussions related to union organizing.
The court rejected the worker’s argument that the video evidence was unreliable due to discrepancies between video timestamps and punch clock data, noting that “an investigation can, and in this case did, collate information from more than one source.” There was no reason Fiera’s management couldn’t compare the punch clock data with the video footage when the discrepancy in time stamps was known and could be accounted for, the court said in finding that the timecard records were accurate.
The court also found that the worker wasn’t straightforward with his explanation, particularly when confronted with evidence that contradicted what he was saying, and his potential explanations didn’t make sense – the time clock didn’t record his own card being punched twice and there was no doubt as to the accuracy of the data. There was no plausible explanation, but the worker continued to deny wrongdoing in the face of the evidence, said the court.
Dishonesty during investigation
The fact that the worker wasn’t forthcoming about his misconduct during the investigation, even in the face of the video footage, was a key factor, according to Jeremy Herman, an employment lawyer at Samfiru Tumarkin in Ottawa.
“There's an emphasis throughout the decision that the fact that the worker wasn’t forthcoming was an issue, and I think it just compounded the lack of trust that already existed as a result of the alleged time theft,” says Herman. “There's obviously a trust issue there, and then when the worker isn’t forthcoming about it, that’s generally going to seal the deal, so to speak, on the employer's ability to rely on that to justify a termination for cause.”
As for the worker’s assertions of reprisal related to raising health concerns and union organizing, the court found no evidence supporting them – particularly since they occurred years before his termination and he didn’t report them to anyone else. The worker also didn’t provide details of his union discussions and there was no evidence that the company was aware of them, the court said.
Despite the worker’s 13 years of service, age of 55 at the time of dismissal, and clean disciplinary record, the court found that the worker’s actions undermined the essential trust required in the employment relationship – Fiera had to rely on its employees to comply with their basic obligation to work during the hours for which they were being paid and to use the punch system honestly. As a result, the worker’s misconduct “meets both the common law and the Employment Standards Act (ESA) definitions of misconduct” justifying dismissal, the court said in dismissing the worker’s claims for damages in lieu of notice.
Just cause under common law, employment standards
Despite the fact that there weren’t any previous issues or discipline with the worker, the court was clear that severity of the misconduct was sufficient to cause a breakdown in the employment relationship giving rise to just cause under the common law as well as the higher threshold of willful misconduct under the ESA, says Herman.
“It was a pretty simple issue, using someone else's timecard and engaging in time theft - it's pretty clear just by virtue of the action itself that there was a willful aspect and it wasn't just an error,” he says. “That's why it met that standard of the ESA, which we know from a history of other cases that it's a very high standard employers are often unable to meet.”
“I really think the fact that the worker doubled down and lied about it during the investigation assisted the decision-making for [Fiera] and also for the court to say that there was a willfulness here,” he adds.
The court also found that there was no evidence of bad faith or any actions by Fiera that were “malicious, oppressive, high-handed, or that offends the court’s sense of decency.” The worker’s claim for moral and punitive damages was also dismissed.
Fiera’s success in the case was due largely to the worker’s clear misconduct and the company’s ability to meet its obligation to conduct a thorough investigation, says Herman.
“Providing the employee with an opportunity to give an explanation is key - if the worker provided an explanation that was satisfactory, then that's one thing, but he didn’t, so that's something to which the employer will be able to point to justify cause,” he says. “And that goes beyond the actual incident of time theft - how the investigation plays out and how forthcoming the employee is during the investigation, is also going to be material.”
