Can my company charge a fee if someone doesn’t show up for their shift?

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THE QUESTION

I work at a large restaurant and bar that has been having issues with people calling in sick last-minute. They just introduced a new policy that if you don’t give 24 hours’ notice that you can’t come in for your shift, they’ll deduct $50 from your next paycheque. They said that if you find someone else to cover your shift, then you won’t have to pay the fee. I know they’re just trying to deter people from calling in sick so often but this seems unfair and possibly illegal. Is a company allowed to charge a fee when someone doesn’t show up for their scheduled shift?

THE FIRST ANSWER

Thuraya S. A. Lutfi, Lawyer, Lutfi Law, Mississauga

Rules vary between jurisdictions and provinces but in Ontario the Employment Standards Act (ESA) strictly limits deductions from pay. It prevents an employer from deducting, withholding or causing an employee to return wages unless the deduction is required by law, authorized by a court order or covered by a valid written authorization.

The written authorization must state that a deduction can be made and must refer to a specific amount or a formula for calculating it; oral agreements and blanket authorizations in an employment agreement are not enforceable. A policy announcement alone is unlikely to meet these requirements, and refusing to sign an authorization allowing a deduction from your wages is protected activity under Ontario’s ESA.

A signed authorization may still be vulnerable. In the context of a resignation notice, the Ministry’s guidance states that a written authorization would be invalid if the amount to be deducted constituted a penalty rather than a genuine attempt to pre-estimate damages. Whether that reasoning extends to missed shifts has not been confirmed here.

Statutory sick leave adds further protection. Once an employee has completed two consecutive weeks with the employer, they are entitled to three unpaid sick days per calendar year and an employer can’t fire, discipline or penalize an employee because they properly exercised their ESA sick-leave rights. An employee must generally tell the employer before starting the leave, or as soon as possible afterward if that isn’t feasible, and will not lose the right to the leave by failing to do so. Absences beyond those three days are not protected by this provision. However, disability-related absences may engage the Human Rights Code.

THE SECOND ANSWER

Daniel Wong, partner and chair, employment law group, WeirFoulds LLP, Toronto

Employers have a legitimate interest in ensuring that scheduled shifts are covered. Last-minute absences can create operational challenges, increase labour costs and negatively affect customer service, particularly in industries such as hospitality where staffing levels can directly impact the business. It is understandable why an employer would want to minimize the impact to its business by employees who fail to report for their scheduled shifts with little to no notice.

That said, employers generally cannot impose financial penalties on employees simply because they miss a shift. In many Canadian jurisdictions, including Ontario, deductions from wages are heavily regulated. While employers may be permitted to make deductions that are required by law or authorized in certain circumstances, a policy that effectively imposes a $50 fine for a missed shift may be vulnerable to challenge. Calling the deduction a “fee” rather than a “penalty” does not necessarily change its legal character.

The analysis can become more complicated depending on the reason the employee is unable to report for their scheduled shift, such as an illness or a family emergency. Human rights and employment standards legislation each provide various protections for employees who are unable to work because of illness or reasons that constitute a protected ground. A policy that discourages employees from reporting legitimate absences could expose an employer to additional legal risk.

As with many workplace issues, practical considerations are important. Employers may be better served by addressing attendance issues through scheduling practices, attendance management programs and progressive discipline where appropriate, rather than attempting to recover money directly from employee wages. A policy that is intended to solve one workplace problem can sometimes create a different one altogether.

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