Is it wise to use time-tracking software?

On the one hand, a recent B.C. decision involving time theft is good news for employers — especially with the huge rise in remote work — in confirming they can use time-tracking software to ensure that work is actually being done.

“They also might take comfort in the fact that they can potentially calculate, to the minute, the amount of time that employees are spending on a work task or what is deemed to be a non-work task,” says Navpreet Chhina, associate at Inlet Employment Law in Port Moody, B.C.

On the other hand, “there's a lot of other considerations about privacy and how it affects employee morale [they are] not taking into account,” she says.

New employee

The case involved Karlee Besse, who started working as an accountant at accounting firm Reach CPA in October 2021. By February 2022, she was having weekly meetings with her manager to help her better manage her files, and the company installed a time-tracking program called TimeCamp on her work laptop — which she knew about.

In March, the company talked to Besse about some of her files which were over-budget and behind schedule, and put her on a performance improvement plan. After the meeting, Reach analyzed TimeCamp data between Feb. 22 and March 25 and found 50 unaccounted hours that she had reported on her timesheets that did not appear to have been spent on work-related tasks.

On March 22, the principal of Reach met with Besse to discuss the analysis and unaccounted hours, but also gave her time to consider the information and respond. She declined that opportunity and, later that day, her employment was terminated for cause for time theft.

But Besse claimed there was no cause and she was entitled to $1,371 for unpaid wages and $4,166 for one month’s severance pay in lieu of notice, for a total of $5,538. However, she limited her claim to $5,000 to meet the monetary limit for small claims in the Civil Resolution Tribunal.

In response, the firm counterclaimed for $1,506 for paid wages that it said amounted to time theft, along with $1,096 it said Besse owed as part of an advance Reach made when she began working there.

Software considerations

At the tribunal, Besse said she had found the software difficult to use and she could not get the program to differentiate between time spent working and time spent for personal use. But she “did not have to take steps” to get TimeCamp to make that differentiation as the software did that automatically, said tribunal member Megan Stewart.

Besse also said she did some doing work using paper copies, but the software data on printing activity showed she could not have printed the large volume of documents she would have needed to do that work.

The tribunal also factored in Besse’s responses when first confronted by Reach, such as: “Clearly, I’ve plugged time to files that I didn’t touch and that wasn’t right or appropriate in any way or fashion, and I recognize that and so for that, I’m really sorry.”

As a result, the tribunal found Besse engaged in time theft, which “in the employment context, is viewed as a very serious form of misconduct,” said Stewart in the Jan. 11 decision Besse v. Reach CPA Inc., BCCRT.

“Given that trust and honesty are essential to an employment relationship, particularly in a remote work environment where direct supervision is absent, I find Miss Besse’s misconduct led to an irreparable breakdown in her employment relationship with Reach and that dismissal was proportionate in the circumstances. So, I find Reach had just cause to terminate Ms. Besse’s employment.”

Reach was allowed the claim of $1,500 for the unaccounted hours, based on Besse’s annual salary of $55,000, along with $1,096 for the advance agreement.

Previously, an Ontario manager resigned to avoid investigation into time theft.

'Honest is of the utmost importance'

Essentially, it comes down to the fact that dishonesty is involved,’ says Michelle McKinnon, partner at McMillan in Vancouver.

“Genuinely speaking, in an employment relationship, honesty is of the utmost importance. Case law always talks about [how] it’s the cornerstone of the employment relationship.”

Time theft is a serious matter, according to Chhina.

“When it’s proven, time theft can speak to an employee's propensity for dishonesty,” she says. “All employment relationships need to be grounded in trust, and trust that the other party will uphold their duties and responsibilities to the other party. So when one party in an employment relationship is dishonest, then that can erode the trust that the other party has in the dishonest party. And that can break down the relationship.”

However, time theft doesn’t always warrant a just cause dismissal, she says: “Each case is considered on its own merits.”

“In this case, the employee made some admissions [and] there were data to back up the time theft allegation, so that helped the [tribunal] comes to their conclusion.”

In order for a culpable action to be accurately characterized as time theft, that action must include “an overtly fraudulent act,” said another legal expert.

Privacy considerations

In this case, the employee knew she was being monitored, but had she not known, the result may have been different, says McKinnon.

And many employers have been asking about how to manage employees working from home, to make sure they are productive, while staying compliant with privacy legislation, she says.

“The issue is if you're tracking the time, what exactly are you tracking? Are you looking at what they're doing on their personal time? Are you over-monitoring? Are you capturing information and activities that go beyond what is considered reasonable?”

Employers should really consider whether it’s in their best interest to install this kind of tech without employees’ knowledge, says McKinnon, citing privacy legislation “that prohibits the use or disclosure of information that a reasonable person would not consider appropriate in the circumstances.”

In some instances, there are requirements around consent and giving notice to avoid being offside of the legislation, she says.

“My recommendation certainly would be if you are going to install this type of software with the purpose of tracking what the employee is doing, to notify them that ‘This is the software and this is the purpose for which we are installing it, and this is what we are going to be doing with it.’”

Also of note: Often this kind of software is installed on devices that are used for both personal and professional use, which could cause privacy violations, says Chhina.

“The time-tracking software might not stop right at 4:30 or 5:00, it might continue all day, and then the employer ends up getting information that they are not entitled to or that the employee would feel uncomfortable about their employer receiving,” she says, such as virtual calls with a doctor or lawyer.

“It's another reason to really consider the full scope of the impacts prior to any software. And it's important to have a discussion with the employees about any issues that can arise that are unforeseen.”

There may also be issues around how the software company is using the data, says Chhina.

“Are they storing it for their own use? Is it being sold to third parties? Is that truly looked into before installing it? Because I’m not sure it is every time.”

Employee morale

In this case, the employer did the right thing in informing employees that it was installing this software on their devices, says Chhina.

But companies should still consider whether there are “reasonable limits on the scope of what is being tracked, whether the employees consent [to this] and… how time-tracking software can impact workplace culture,” she says.

For example, being monitored this way can cause anxiety in staff.

“I think it's fair to say that micromanaging employees with surveillance can have negative impacts. And I think employees want to feel like their employers trust them. And they want to feel like they can be independent and they don't need their employer to constantly check up on them, check in on them, monitoring every minute. It can cause stress and exhaustion and burnout of employees,” says Chhina.

It’s about looking at what kind of culture you want as a business, says McKinnon.

“Do you want employees to feel like you've been watching them all the time?”

Instead, employers might want to consider alternatives, such as deliverables-based performance metrics, says Chhina.

“If the employee is not meeting the goals or not meeting the deadlines, then maybe discuss that with them and their team, see what isn’t working. There are always alternatives that foster a workplace that has trust and that has good faith, so surveillance is not necessarily the best way or the easiest way forward.”