Time Theft in Ontario: What Employers and Employees Need to Know

TL;DR: “Time theft” usually means getting paid for time not actually worked—think padded timesheets, extended breaks, “buddy-punching,” or billing hours while doing non-work tasks. In Ontario, it can be just cause to fire someone at common law, but that doesn’t automatically cancel Employment Standards Act (ESA) minimums unless the higher “wilful misconduct” test is also met. Get your monitoring, record-keeping, and discipline process right—or risk losing the case (and paying anyway).

What counts as “time theft”?

Examples include falsifying timesheets, logging hours while off-task, “buddy punching” for a co-worker, or double-counting billable time. Whether a single incident justifies dismissal depends on context—role, seniority, trust, track record, and proportionality—all factors emphasized by the Supreme Court of Canada.

The two legal tests Ontario employers must navigate

1. Common law “just cause”: Serious misconduct (including dishonesty) can justify termination without common-law notice if, in context, trust is irreparably broken.

2. ESA “wilful misconduct”: To deny ESA termination pay entirely, employers must prove the employee intentionally engaged in misconduct that is not trivial and not condoned (a higher bar than ordinary “just cause”). This is set out in O. Reg. 288/01 under the ESA and was underscored by Ontario’s Court of Appeal in Render v. ThyssenKrupp. Translation: you might win “just cause” but still owe ESA minimums if “wilful” isn’t proven.

Why this matters: A time-theft case can succeed on just cause, yet ESA minimums may still be payable unless the conduct is truly wilful. Plan your investigation and documentation accordingly.

Record-keeping and monitoring: the compliance backbone

• Keep accurate hours records. Ontario employers must record and retain hours worked. These records often make or break time-theft investigations.

• Electronic monitoring policy (25+ employees). Since Ontario’s Working for Workers Act, 2022, employers with 25+ employees on January 1 each year must have a written Electronic Monitoring Policy (typically by March 1). This does not create new privacy rights but requires transparency about monitoring.

Can you dock wages for time theft?

Be very careful. Ontario’s ESA strictly limits wage deductions. As a rule, you cannot unilaterally deduct from wages for losses, cash shortages, or property damage—even if you suspect misconduct—unless a statutory exception or a compliant, specific written authorization applies. Self-help deductions often backfire.

Remote work & software logs: helpful, not a silver bullet

Tribunals and arbitrators have credited time-tracking data in recent Canadian decisions. In Besse v. Reach CPA (BC, 2023), software logs supported a just cause finding and repayment of wages for 50.76 unworked hours. That’s a B.C. tribunal decision—persuasive, not binding in Ontario—but it shows how detailed activity logs can carry the day when combined with a fair process.

Privacy guardrails (Ontario)

Ontario doesn’t have a general private-sector employee-privacy statute like B.C./Alberta/Quebec. PIPEDA applies to employee information only in federally regulated workplaces (banks, telecom, airlines), not most Ontario employers. Still, Ontario recognizes the tort of intrusion upon seclusion (Jones v. Tsige), so over-intrusive monitoring can trigger liability. Build necessity, proportionality, transparency, and safeguards into any monitoring plan.

A practical, defensible “Time Theft Protocol” (for employers)

1. Preserve data: Pull timesheets, access logs, software reports, and relevant emails.

2. Check the policy stack: Electronic Monitoring Policy (if 25+), confidentiality, acceptable use, and time-keeping policies.

3. Investigate fairly: Interview the employee, consider explanations (e.g., paper work not captured by software), and look for corroboration (print logs, client files).

4. Apply the right test: Ask: (a) Is just cause justified in context? (b) Is the higher ESA wilful misconduct threshold met if you plan to deny ESA minimums?

5. Avoid self-help deductions: Pay what the ESA requires unless a narrow exception clearly applies.

6. Document everything: Findings, rationale, and communications.

7. Get legal advice early: The cost of a misstep often exceeds the disputed hours.

For employees accused of time theft

Get advice fast. The difference between just cause and ESA wilful misconduct can determine whether you still receive statutory termination pay even if your employer ends the relationship for cause.

How Vanguard Law can help

Whether you’re drafting compliant monitoring policies, investigating a concern, or responding to an accusation, Vanguard Law advises Ontario employers and employees on time theft, discipline, and termination—with an eye to both the common law and the ESA.

This blog is general information, not legal advice. Contact counsel about your specific facts.