Time Theft Allegations are Risky Arbitration Decision Highlights
A recent Ontario arbitration award serves as a reminder to employers that allegations of “time theft” or fraud require strong evidence, careful investigation, and fair process.
An Ontario arbitration decision reminds employers that terminations for alleged misconduct must be supported by clear evidence and a fair process. In Cavendish Manor Retirement Home v. CLAC Local 302, an arbitrator overturned the discharge of a Dietary Aide accused of “time theft,” ordering the employer to pay termination entitlements under the Employment Standards Act, 2000.
What Happened
- The employee, a Dietary Aide with five years of service, was dismissed after allegedly falsifying her sign-in sheet for three January 2025 shifts.
- The employer claimed she was attempting to commit “time theft” by recording hours she had not worked.
- The employee argued she had approved lieu days and a statutory holiday for those dates and filled out the sheet incorrectly only to ensure she would be paid, given past payroll issues.
- The arbitrator found:
- The grievor had indeed been granted lieu days and a statutory holiday.
- The posted schedule confirmed she was not expected to work.
- She had not been told how to properly record such days on the form.
- No investigation or meeting was held with her before termination.
The Decision
The arbitrator concluded there was no evidence of fraud. Instead, the employee’s conduct was an “innocent, maybe naïve” attempt to make sure she was properly paid.
Because the union opposed reinstatement, the arbitrator awarded ESA termination pay equal to five weeks’ wages ($3,497). The grievance was upheld.
As Christopher Achkar, employment lawyer and founder of Achkar Law, explains:
“Allegations of time theft can be costly and complex, and mishandling them may expose employers to legal risk. Speaking with a labour lawyer before taking action ensures your decisions are fair, defensible, and legally sound.”
Key Lessons for Employers
1. Investigate before disciplining
a. The employer terminated without interviewing the employee or clarifying the disputed sign-in sheet.
b. Arbitrators expect a fair investigation before dismissal, even for serious allegations like dishonesty.
2. Communicate expectations clearly
a. Employees must know how to complete forms for statutory holidays and lieu days.
b. Ambiguities in record-keeping procedures increase employer risk.
3. Be cautious with “time theft” allegations
a. Fraud and dishonesty are considered “capital offences” in labour relations.
b. Arbitrators require clear and convincing evidence of intent to defraud. Innocent mistakes do not meet that standard.
4. Consider remedy implications
a. Even where reinstatement is not sought, arbitrators can order ESA entitlements or other compensation.
b. Failing to follow proper process can still cost employers money and credibility in future disputes.
Employer Takeaway
This case is a strong reminder that discipline for dishonesty must be based on a solid investigation, clear evidence, and transparent policies. Employers should:
- Review workplace policies on timekeeping, lieu days, and statutory holidays.
- Train managers on investigation procedures and documentation.
- Seek legal advice before terminating for “time theft” or other forms of dishonesty.
Conclusion
For Ontario employers, the Cavendish Manor award highlights the importance of process and clarity in handling potential misconduct. A rushed or poorly investigated termination risks being overturned, even when the employer believes misconduct occurred.
Achkar Law advises employers across Ontario on discipline, discharge, and grievance arbitration. We help unionized employers build defensible policies, conduct investigations, and manage disputes effectively.
Contact Achkar Law
Terminating an employee for “time theft” or other misconduct without solid evidence or a fair process can quickly lead to costly legal outcomes. Even well-intentioned actions may be overturned if investigations or documentation fall short.
If you’re dealing with employee misconduct concerns, disciplinary issues, or potential arbitration, our labour lawyers can help you manage the process and protect your organization’s interests.
Speak with a labour lawyer today to ensure your decisions are fair, defensible, and compliant with Ontario law.
Call toll-free: 1-800-771-7882 | Email: [email protected]
The article in this client update provides general information and should not be relied on as legal advice or opinion. This publication is copyrighted by Achkar Law Professional Corporation and may not be photocopied or reproduced in any form, in whole or in part, without the express permission of Achkar Law Professional Corporation. ©
Workplace Law Topics: Labour Law