Time Theft, Just Cause, and Bad Faith in an Employment Termination
Did an employer have “just cause” to terminate an employee for “topping up” employee timesheets? Did this constitute “time theft” and “fraud”? What constitutes “bad faith” in the actions of an employer when firing an employee? The Superior Court addresses these questions in Wilsher v. Olympic Wholesale, a case where an employee sued his former employer of 17 years for wrongful termination and was awarded 33 months’ notice.[i]
Facts
The plaintiff in this case, Terry Willsher (“Willsher”), brought a claim against the defendant, Olympic Wholesale Company Limited (“Olympic”), for the wrongful termination of his employment as a Night Shift Supervisor at the food distribution company’s warehouse in Ajax.[ii]
Willsher was hired on July 24, 2006 as a warehouse labourer, and was promoted to Night Shift Manager in 2015.[iii] Upon his promotion, Willsher was given a company laptop, passcode, and access to the time management system that enabled him to make adjustments to employees’ timesheets, which his former supervisor, whom he shadowed for training, showed him how to do.[iv] According to Willsher, it was a regular practice for warehouse labourers to “clock out” and leave early if all the work had been completed before the end of their shift.[v] Relatedly, it was a regular but unwritten practice for supervisors to conduct “clock out/top up” adjustments on employees’ timesheets.[vi] The practice was instituted to guarantee employees 40 hours of work per week in accordance with their union contract.[vii] This evidence corroborated with the testimony of three other long-time, current warehouse labourers.[viii]
The testimony and actions of two representatives of Olympic are particularly relevant. Eric Sousa (“Sousa”) was the Operations Manager at Olympic and direct supervisor of Willsher.[ix] Sousa testified that his work hours were weekdays from 8:00 a.m. to 7:00 p.m., that he had no knowledge of the usual practices of the night shift between the hours of 10:00 p.m. and 2:30 a.m., including the practice of “topping up” timesheets.[x] Additionally, Sousa stated that he and Willsher had a “negative” relationship.[xi] Dan Peroff (“Peroff”) was the President of Olympic. Peroff testified that he was not involved in any discussions with Willsher regarding his duties.[xii]
Sousa received a complaint from the Day Shift Supervisor alleging that Willsher was “manipulating the payroll” by engaging in time theft to benefit certain employees in exchange for favours.[xiii] On October 5, 2023, Willsher was called into a room and was questioned by Peroff and Sousa about the “topping up” practices.[xiv] Peroff and Sousa then interviewed five night shift labourers who advised that they did not track their weekly hours or overtime and trusted payroll to pay them for the time they worked.[xv] These employee responses were relayed to Willsher when he was asked to return to the room, where he then suggested that he be removed from inputting hours for staff and stated that he topped up hours because it was allowed.[xvi] Peroff told Willsher that this was an admittance of fraud and that he was being fired.[xvii] Willsher was then provided with a letter of termination and escorted from the building.[xviii]
Willsher’s overall position was that he admitted to “topping up” employees’ hours, a practice used by all Night Shift Supervisors for at least 19 years, for the purpose of having their hours reflect the terms of their union contract which guaranteed 40 hours of work per week.[xix] Olympic’s position was that management was unaware of the “topping up practice”, that it was unauthorized by Olympic, that it was against company policy, and it therefore constituted “time theft” and “fraud”.[xx] Additionally, Olympic claimed that Willsher engaged in fraud by manipulating the payroll, lying about it when he was confronted, and that these actions constituted “just cause” to terminate his employment.[xxi]
Court’s Analysis
The first issue before the Court was whether Olympic had “just cause”, a legally valid reason to fire an employee without notice or severance, to terminate Willsher’s employment. Under the Employment Standards Act, 2000, termination for “just cause” requires “wilful misconduct, disobedience or wilful neglect of duty that is not trivial and has not been condoned by the employer” (ESA, s. 71.10.1(4)(a)).[xxii] The Court further cited the test for “just cause” from McKinley v. BC Tel, [2001] 2 S.C.R. 161, 2001 SCC 38: “(1) whether the evidence established the employee’s deceitful conduct on a balance of probabilities and (2) if so, whether the nature and degree of the dishonestly warranted dismissal. It is a factual inquiry”.[xxiii] Upon reviewing the particular facts of the case, the Court determined that practice of “topping up” employees’ hours was not a “dishonest act” or “misconduct”, but rather an “ingrained institutional practice that existed at Olympic for a lengthy period and was applied consistently and uniformly by all Night Shift Supervisors”.[xxiv] “Just cause” was therefore not established.[xxv]
The second issue for the Court to address was the period of notice to which Willsher was entitled given that “just cause” was not present. The Court therefore looked to relevant jurisprudence and the Bardal factors established in Bardal v. Globe & Mail Ltd. (1960), 24 D.L.R. (2d) 140, to determine what a reasonable notice period would be on the facts of the case: character of the employment; the length of service; the age of the employee; availability of similar employment; and the experience, training and qualifications of the employee.[xxvi] In this case, Willsher was 55 years old and had been employed at Olympic for 17 years, 8 of which he was a Night Shift Supervisor. The allegations of “theft” and “fraudulent activity” caused Willsher to be unable to secure alternate employment after he was terminated, despite his attempts to mitigate his losses.[xxvii] Under these facts, the Court determined that the appropriate notice period for Willsher was 19 months’ payment in lieu of notice.[xxviii]
The final issue before the Court was to determine whether additional damages were owed to Willsher. Citing McKinley to determine an extension to the notice period, the Court explained that such an extension can be given where a termination is conducted in bad faith or with unfair dealing on the part of the employer, and that this remedy is not triggered by the termination itself but rather by exacerbating factors that harm the employee.[xxix] The Court identified the exacerbating factors in this case to include: the targeted “investigation” that did not attempt to determine the nature and extent of the “topping up” practice; the fact that no other supervisors were interviewed or had their edits of employees’ timesheets audited; that Willsher’s replacement Night Shift Supervisor was terminated in December 2025, immediately prior to trial, for the same practice, which supports the finding that Willsher’s termination was personal and intended to remove him from the company and not to correct the “topping up” practice; and that Willsher’s termination letter, record of employment, and lack of references for his 17 years of employment inhibited his ability to find a new job.[xxx] Based on these factors, the Court determined Willsher was entitled to damages in the form of an extended notice period of an additional 14 months, for a total of 33 months’ notice.[xxxi]
Key Takeaways
The Court’s decision in Wilsher v. Olympic Wholesale demonstrates the importance of assessing employee misconduct in its full workplace context and ensuring that termination decisions are fair, proportionate, and conducted in good faith. Key takeaways from this case for employees and employers include:
- Long-standing workplace practices matter. Specifically, an employer may not succeed in establishing “just cause” where the alleged misconduct reflects a longstanding, tolerated, or institutional workplace practice rather than intentional dishonesty.
- Termination investigations must be fair and impartial. This case demonstrated how selective or inadequate investigation, particularly where similar conduct by others is ignored, may support a finding of bad faith on the part of the employer.
- A finding of bad faith conduct can increase the notice period that is awarded to the employee alleging wrongful termination.
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[i] Wilsher v. Olympic Wholesale, 2026 ONSC 3620 [hereinafter Wilsher]. Note: in alignment with the body of the court’s judgement, Willsher’s surname in the text of this article accords with the spelling recorded on his record of employment and income tax returns.
[ii] Wilsher at paras 1-5.
[iii] Wilsher at paras 9 and 18.
[iv] Wilsher at paras 21-22.
[v] Wilsher at para 12.
[vi] Wilsher at para 14.
[vii] Wilsher at para 15.
[viii] Wilsher at paras 16 and 29-33.
[ix] Wilsher at para 34.
[x] Wilsher at paras 35 and 37.
[xi] Wilsher at para 36.
[xii] Wilsher at para 45
[xiii] Wilsher at para 47.
[xiv] Wilsher at para 49.
[xv] Wilsher at paras 50-51.
[xvi] Wilsher at paras 52-53.
[xvii] Wilsher at para 54.
[xviii] Wilsher at paras 55-56.
[xix] Wilsher at paras 71-73.
[xx] Wilsher at para 74.
[xxi] Wilsher at para 75.
[xxii] Wilsher at para 94.
[xxiii] Wilsher at para 96.
[xxiv] Wilsher at para 108.
[xxv] Wilsher at para 117.
[xxvi] Wilsher at para 119.
[xxvii] Wilsher at para 123.
[xxviii] Wilsher at para 125.
[xxix] Wilsher at paras 126-127.
[xxx] Wilsher at para 129.
[xxxi] Wilsher at para 130.
Tags: Employment Litigation Law, Civil Litigation Law, Commercial Litigation Law, and Contract Disputes.