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Workplace Theft Information

When an employer suspects that one of their employees has committed fraud against the company, a standard course of action involves initiating an internal investigation. Instances of employee fraud may manifest in scenarios such as the manipulation of work hours to receive undeserved wages or fraudulent activities related to the company’s group benefit plan, which might be brought to the employer’s attention by the insurance company.

Irrespective of the nature of the fraud, an employee under suspicion typically faces a meeting with management, during which they are questioned about the alleged misconduct. If the management gathers sufficient evidence to substantiate the accusations of fraud, the implicated employee is likely to face termination. In addition to termination, the employer may choose to escalate the matter by reporting it to the police. Subsequently, the police launch an independent investigation to ascertain the presence of enough evidence for potential arrest. In case of an arrest, charges may range from fraud under $5,000, fraud over $5,000, to falsifying employment records.

A person convicted of any of these offences is left with a permanent criminal record, which, among other consequences, can significantly impact their ability to secure and maintain employment. Furthermore, an employer may decide to pursue a civil lawsuit against the employee to recover misappropriated funds. If the accused individual loses the lawsuit, they may be required to repay the judgment amount along with costs and legal fees incurred by the employer.

Penalties for Stealing from Work

An individual apprehended for stealing from their job is almost invariably subject to termination. In certain instances, the employer may opt to involve law enforcement, increasing the likelihood of the employee facing arrest and subsequent charges.

Offences related to stealing from an employer may encompass charges such as theft under $5,000, theft over $5,000, or possession of property obtained by crime. The potential penalties for these offences vary; for theft under $5,000, the maximum sentence is two years in prison, while theft over $5,000 carries a maximum penalty of five years. In cases of possession of property obtained by crime, the maximum sentence ranges from two to ten years, depending on the value of the property.

Beyond the criminal repercussions associated with theft or possession of property obtained by crime convictions, individuals with a criminal record may encounter adverse consequences in various aspects of their lives. Employment prospects are notably affected, as a clean background check is often a prerequisite for most employers. Additionally, those with a criminal record may encounter challenges when traveling outside of Canada, particularly to the United States.

Punishments for Theft Depend on the Value of Property

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Penalties for Defrauding Work

An individual caught engaging in fraud against their employer is typically met with termination. Moreover, those who defraud their employee insurance may face additional consequences, such as loss of coverage. In certain circumstances, either the employer or the insurance company may escalate the issue by reporting it to law enforcement, potentially leading to the employee’s arrest and subsequent charges.

Individuals implicated in defrauding their employer may be charged with offences such as fraud under $5,000, fraud over $5,000, or falsifying employment records. Penalties for these offences vary, with a maximum of two years in prison for fraud under $5,000, up to fourteen years for fraud over $5,000, and a maximum of two years less a day in prison and/or a fine of up to $5,000 for falsifying employment records.

For those accused of stealing from or defrauding their employer, seeking legal counsel is crucial to safeguard their rights. Donich Law, for example, can provide guidance throughout the process, negotiate with the employer or insurance company, and manage the risk to prevent criminal charges from being filed.

How to Defend Theft Under $5000

Consequences for Stealing at Work

Engaging in theft from your employer is grounds for almost certain termination. When suspicions arise regarding an employee’s involvement in theft, the employer initiates an investigation. Typically, the employee will be summoned to a meeting with the Human Resources department or a managerial representative. Beyond terminating the employee, the employer may opt to escalate the situation by reporting it to law enforcement. Following the report, the police conduct their own inquiry to determine the viability of making an arrest. In the event of an arrest, charges could range from theft under $5,000, theft over $5,000, to possession of property obtained by crime.

A conviction would result in the accused having a criminal record, significantly affecting their prospects of securing and retaining future employment. Many employers mandate a clean background check as a prerequisite for hiring new personnel.

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Frequently Asked Questions

Why is Theft or Fraud in the Workplace More Serious Than Regular Theft or Fraud Offences?

Offences committed against a person’s employer in the context of their job are always more serious than offences committed against a stranger. The offences of fraud and theft involve an offender taking someone else’s property for their own benefit. Fraud also specifically requires an offender to knowingly deceive or lie to their employer while taking their property. An example of workplace theft may be where an employee who is responsible for stocking the shelves at a store, takes some of that stock home with them without permission and without paying for it. An example of fraud may be where a person is employed as a bookkeeper for a small business. The employer trusts their bookkeeper to manage all the business’s expenses. Meanwhile, the bookkeeper knowingly creates false expense reports, and then takes money from the business and pays themselves the amount of the fraudulent expenses.

Workplace theft and fraud are often an abuse of the trust that an employer has in their employee. This relationship of trust is one of many types of relationships of trust or authority that are found in our society. When an offender violates a relationship of this kind, it is relevant to the sentence they will receive. Under the sections of the Criminal Code that deal with theft and fraud, the abuse of such a relationship is known as an aggravating factor. Aggravating factors are circumstances that increase the severity of an offence and result in longer terms of imprisonment or other consequences.

What is a Position of Trust and/or Authority?

A position of trust or authority is a relationship between people where one person trusts another with sensitive information or gives the other some kind of control or authority over an aspect of their life. These relationships are key to the functioning of our society. As mentioned above, the employer-employee relationship is one such kind of relationship, and the relationship between a parent and child would be another example. Within the context of the employment relationship, the employer trusts their employees to carry out duties and responsibilities towards their business. The more important an employee’s duties are, the more trust an employer has placed in them. If an employee abuses this trust, perhaps by committing theft or fraud in the workplace, the damage these crimes may do is significant. That is why the law imposes greater punishments on those offenders who would violate these types of relationships.

An example of how courts view the abuse of relationships of trust and authority can be seen in the Supreme Court of British Columbia case of R. v. Bornais, 2023 BCSC 1945 (CanLII). In this case the offender was sentenced to 20 months’ imprisonment for several offences relating to workplace fraud and theft. She was also ordered to pay restitution in the amount of money she stole from her employer – over $144,000 stolen over a six-year period in the offender’s position as a dental receptionist. While discussing the appropriate sentence and the scope of the offence, the court stated, “… Ms. Bornais engaged in a deliberate pattern of deception over a period of almost six (6) years, all while abusing her position of trust. Ms. Bornais caused substantial losses to her victims. She did so in a situation involving the provision of dental services, which I find are integral to an individual’s general health… her actions will likely have long-lasting and far-reaching impacts on Dr. Murray, Dr. Murray’s patients and the insurance companies. Her actions, given their severity,  must be strongly denounced. The sentence imposed on Ms. Bornais must serve to deter those who would betray the trust of their employers and steal from them.” [at para 98] This quote reflects the value that Canadian law places in the value of the employment relationship and the respect it should be given.

What if Someone is a Regulated Professional?

Certain professions are regulated by specific laws in Canada. These include careers such as doctors, teachers, nurses, or lawyers. Under the respective laws that apply to each profession, each professional must follow certain rules to continue their practice. These laws are required because of the high degree of trust that people place in these professionals, whether they be clients or patients.

If a lawyer, doctor, or other regulated professional were to commit workplace theft or fraud, it may severely victimize several vulnerable people. As a result, a regulated professional who commits such an offence will be considered to have committed an especially severe offence. Aside from stricter criminal punishments, the professional may be fired from their job and subject to an independent investigation and prosecution conducted by the regulatory body that oversees their profession. Such a prosecution may result in the offender having their license to practice law, medicine, etc. either suspended for a period of time or revoked entirely. Regulatory bodies will also place a notation on the professional’s regulatory profile online, so others will be able to see that the individual was investigated and/or disciplined by their regulatory body.

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Penalties for Breach of Trust

R. v. Caravan, 2023 CanLII 98783

This Provincial Court of Newfoundland and Labrador case is an example of workplace fraud. As the bookkeeper for a small business, the offender altered several cheques that were intended for other recipients and directed them to her bank account. She managed to defraud her employer of over $19,000 until she was discovered after an audit was conducted by an accountant. She was given a four-month conditional sentence for this offence and was issued a restitution order.

When deciding on the appropriate sentence in each case, a court must look at more than the aggravating factor of an abuse of a relationship of trust. There are always other factors that increase or decrease the severity of an offence. Factors that decrease this severity are known as mitigating factors. The mitigating factors at play in this case included that it was the offender’s first criminal offence, and the fact that severe mental health issues – a gambling addiction – motivated this offence. In these circumstances, a lengthy prison sentence was inappropriate. Instead, given the offender posed little risk to others, she was permitted to serve her sentence within the community. This alternative form of punishment was thought to best serve the principles of sentencing.

R. v. Durant, 2021 ABPC 79

The Provincial Court of Alberta case of R. v. Durant concerned an employee who committed fraud using a debit card given to him for business purposes by his employer. The offender was a chef, and the card was meant to purchase supplies for his place of work. The fraud involved 112 transactions worth a total of just over $7,000. The offender was given a nine-month conditional sentence along with 12 months of probation.

The court considered several factors before arriving at a final sentencing decision. Among the most relevant was the abuse of a position of trust. But the court also had to consider that the offender’s misdeeds were motivated by a drug addiction. Furthermore, after being confronted by the victim, the offender paid back the money and voluntarily entered a rehabilitation program. This showed that the offender had already begun the self-reflection and improvement that his sentence would have been designed to achieve. As such, he earned a more lenient sentence. “Since then he has done everything necessary to contribute to his own recovery, and more importantly, to the recovery of others that he has sponsored.  He has become a good person and a good employee.  He has confronted his problem and conquered it.  He has, in short, done all that society could ask of him.” [at para 31]

R. v. McCarthy, 2015 CanLII 7719 (NL SC)

This Supreme Court of Newfoundland and Labrador case is very similar to the one discussed above. Here, the offender was a town clerk, who eventually pled guilty to theft and fraud after it had been discovered that she had been altering receipts for amounts of money paid to the town and pocketing the difference, as well as issuing herself extra pay. The amount of money she took was totaled at over $21,500. The offender was given a 12-month conditional sentence, two years of probation, a restitution order for value of the offences, and a victim fine surcharge.

Despite the severity that is involved in defrauding municipal government, the offender was given a conditional sentence because she posed little risk to the community.  The court noted that theft and fraud, especially in this context, require the offender to be in a position of trust. As a result of this case, it would therefore be highly unlikely that anyone would employ the offender in a similar position again. This means that she posed little risk of reoffence because she would likely not be able to regain anyone’s trust.

About the Author

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Jordan Donich

Jordan Donich has been a Lawyer for over 10 years and is a trusted legal analyst by Canadian Media. He is as a leader in Canada’s tech sector for lawyers and developer of Law Newbie. Jordan is a Black Belt with the Japan Karate Association and trained in Krav Maga. He won a Gold Medal at 2004 Canadian National Championships and was published in the National Newspaper Awards.

Jordan has been featured in Forbes and is a member of DMZ Angels in Toronto.