If a remote employee quits, can the employer do anything (such as withhold the final pay cheque) to make sure all of its equipment is returned?
Question: If a remote employee quits, can the employer do anything (such as withhold the final paycheque) to make sure all of its equipment is returned?
Answer: Withholding pay without the employee’s authorization is generally prohibited under provincial employment standards legislation and will only be permissible in very narrow and rare circumstances. However, some jurisdictions, including Ontario, allow an employer to withhold or make a deduction from an employee’s wages where the employee has provided written authorization. In most cases, that authorization must be very specific. For example, in Ontario, the employee’s authorization must refer to a specific amount or provide a formula from which a specific amount may be calculated.
Employers in most provinces can also withhold or deduct pay where it is granted by a court order or statute. For example, where employees refuse or fail to comply with the employer’s request, the employer may be able to obtain an Anton Piller Order through the court system: See Peters & Co Limited v Ward. An Anton Piller Order is a type of civil search warrant granted by the court that enables the applicant employer to attend at the employee’s premises without notice and take possession of records or items to which the employer asserts a claim. However, this is considered an extraordinary and costly remedy. As such, employers should not look to this as a first solution.
Instead, employers should act proactively and clearly outline their expectations in both the offer of employment and the termination of employment with respect to the return of company property. In the final communication with the employee, employers should provide clear instructions requiring the employee to return any company property, to whom the property should be returned and the method of delivery. Often, where employers offer a without-prejudice offer of severance in addition to any statutory entitlements, an employer can make payment of those additional funds conditional on the return of property.
Additionally, employers should be mindful of the date by which they must issue the employee’s final pay. In Alberta, employers can elect to pay the employee’s earnings either 10 consecutive days after the end of the pay period in which the termination of employment occurs or 31 consecutive days after the last day of employment, whichever the employer prefers. These requirements vary by province and should be front of mind when an employee resigns or is terminated, because they apply regardless of when an employee returns their final property.
Employers should consider consulting with their legal counsel if they would like to obtain an employee’s written authorization to withhold pay until the employer’s property is returned or if they wish to pursue the matter through the courts.
For more information, see:
- Peters & Co. Limited v. Ward, 2015 ABCA 6 (Alta. C.A.).
Tim Mitchell practises management-side labour and employment law at McLennan Ross in Calgary. He can be reached at (403) 303-1791 or [email protected]