Tracking of company vehicles ‘reasonable,’ says Ontario board (Legal View)

Unions complained about employee privacy but company had right to monitor use of its assets

An Ontario company’s electronic tracking of company vehicle use was reasonable and did not violate employee privacy, the Ontario Labour Relations Board has ruled.

In early 2008, Otis Canada, an elevator construction and maintenance company based in Toronto, found the costs related to its fleet of company vehicles were increasing, particularly due to fuel consumption, maintenance, rentals and accidents. An analysis determined the most savings could be achieved through a reduction in fuel consumption.

So a leasing company used by Otis recommended the elevator company use a technology called Telematics, which involved the installation of devices on company vehicles to monitor when they were turned on and off. By measuring each vehicle’s operation, Otis could record its use and ensure employees who drove company vehicles home weren’t using them for personal reasons.

The devices had GPS capability but Otis didn’t enable this feature.

Before the implementation of Telematics, many employees took company vehicles home because they could keep tools in them and go directly to job sites. Otis claimed it had a rule that didn’t allow for the personal use of the vehicles, but employees often used them to do errands on the way home or attend union meetings, usually with the consent of supervisors.

There was no way for Otis to truly know if employees were using company vehicles for personal errands unless there was damage to a vehicle or an employee was actually seen on a personal errand, so discipline for unauthorized use was rare.

After a test run of Telematics in June 2009 in Hamilton, Otis rolled it out to the rest of the company in December. Employees were informed of how the devices worked and the fact that they recorded the date and time an engine started and turned off, the distance driven, stationary and moving time, stop time between trips and fuel consumption.

They were also warned of the company’s policy against the personal use of vehicles and any unauthorized use would result in discipline and termination, with the exception of short stops or trips home.

New system not appreciated

Once Telematics was implemented, the number of employees who took company vehicles home decreased as many people had privacy concerns over the use of the devices, particularly after hours. Otis didn’t require any employees to take vehicles home so it made arrangements, where possible, to set up parking spots where employees could pick up vehicles. In some cases, employees used their own vehicles and Otis paid the mileage from the first stop to the last of the workday.

Employees who were on call were allowed reasonable personal use since they had to be available.

Two unions representing Otis employees filed grievances over Telematics, arguing the monitoring of the vehicles outside of working hours was a violation of employee privacy.

They also said that prior to the implementation, there was no enforced policy against the personal use of vehicles and enforcing one now was a unilateral change in the terms of employment, without consultation. The unions also pointed to the collective agreement, which stipulated there would be “no geographical restrictions on the use of personal or company vehicles.”

Another grievance stemmed from a long-time employee with no disciplinary record who claimed he was previously allowed to do small personal errands using a company vehicle. After the company warned employees regarding discipline for violations of the policy, the employee said his managers knew he was still running small errands in the company vehicle and nobody told him not to.

However, after using a company vehicle a few times to pick up groceries, the employee was suspended for two days.

Technology allowed

The board noted the collective agreement allowed Otis to use new technology to improve its service to customers, with no restrictions, and it found Telematics could be included in this. Otis also had legitimate business reasons for installing Telematics in its vehicles and it only monitored whether a vehicle was in use, not its location, found the board.

In addition, shutting off the devices after hours wasn’t a solution because the purpose of the monitoring was to ensure no off-hours use, said the board, which agreed the company was simply monitoring its assets.

And the enforcement of the personal-use policy brought about by Telematics wasn’t a significant change to the terms and conditions of employment, said the board.

“The employer is responsible and indeed liable for (its) vehicles at all times,” it said. “The Telematics device is a legitimate way to protect the employer’s asset, an asset for which it has full responsibility. Given the options that the employer has provided to employees, the restriction on the use of the vehicle during off-duty hours is justified.”

Though the no-personal-use policy was limited and rarely enforced due to difficulties in monitoring, once Telematics was implemented, Otis clearly communicated the policy and the risk of discipline to employees, said the board. Any threats to employee privacy were the employee’s choice.

“An employee can either obtain permission for the use of the company vehicle — which... requires a disclosure of where the vehicle will be and when and for how long — or she can leave the vehicle and provide no explanation to the employer at all. The employee’s privacy rights are in that way fully protected,” said the board.

However, although the rule was reasonable and enforceable, the two-day suspension of the employee was too much, found the board. The employee had many years of service with a spotless employment record and was used to being able to use a company vehicle for small errands. The employee’s misconduct was “inadvertent and his discipline excessive,” said the board, in reducing the suspension to a written warning and ordering Otis to pay the employee for lost compensation.

Jeffrey R. Smith is the editor of Canadian Employment Law Today, a publication that looks at workplace law from a business perspective. For more information, visit

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