Finger-scanning time-clock system approved by BC arbitrator

‘The threshold that they had to meet was low because the system was so minimally invasive’

By Jeffrey R. Smith

Mar 06, 2023

A British Columbia arbitrator has upheld an employer’s implementation of a biometric attendance system as a reasonable use of employee personal information.

“The employer had a legitimate business interest in modernizing their work monitoring system and curtailing people clocking in for work and not showing up or leaving early,” says Michael Penner, a labour and employment lawyer at Kent Employment Law in Victoria. “So they were able to establish, ‘Yes, we are implementing this technology to address a legitimate business concern.’”

“Ultimately, all of the analysis came down to, was this the least intrusive method to accomplish what the employer was intended to accomplish?” adds Penner.

Canadian Forest Products (Canfor) is a forest product company that operates across North America, producing lumber, finishing products, pulp, and paper. It operates a facility in Vanderhoof, BC, that includes a sawmill, planer mill, and a log yard.

System needed modernization

Traditionally, supervisors were responsible for entering the time worked by employees. This was done manually and there was no process for verifying whether employees worked their scheduled hours or arrived and left on time – the company relied on observations of the supervisors and an honour system.

The system placed a large burden on supervisors and there was a significant risk of error, which could lead to employees not getting paid properly. There was also a concern with time theft, as the only way to catch an employee arriving late or leaving early would be if a supervisor happened to catch them.

In 2016, Canfor decided to modernize its human resources information systems across its operations. The company informed the union and employees in 2018 that the unified time, attendance management, and payroll system was being developed. Canfor elected to use a biometric time clock system – called Touch ID – over a manual time entry system and a system with swipe cards or fobs.

Touch ID’s advantage over the others was that there was less risk of employees punching in for others – called “buddy punching” – with swipe cards or errors with more manual tracking.

Employee privacy concerns were small compared to an employer’s need for accurate records from finger-scanning technology, an arbitrator ruled.

Finger scanning

Touch ID involved the use of finger scanning technology to identify and validate an employee’s attendance at work, including entry and exit times. To enroll, employees had to scan one of their fingers on a sensor, which would create a digital image of the fingertip. The system then created a biometric template of key points of the fingertip unique to the employee and then discarded the digital image.

The system generated data when employees entered and exited that was stored in the biometric information for that employee, including the employee’s identity along with start and stop times. There was still the possibility of time theft if an employee scanned in, left work, and then returned and scanned out, but Canfor felt that there was a low risk of that happening.

The union filed a grievance, alleging that the introduction of Touch ID at the Vanderhoof facility and the collection and use of biometric data of employees was a breach of employee privacy and the BC Personal Information Protection Act (PIPA). The union argued that the use of biometric information was not necessary to meet Canfor’s objectives and the company didn’t properly consider less intrusive alternatives.

The union was also concerned with the security of the biometric information, as it was uncertain whether the data was encrypted, although the evidence was that the possibility of a hacker obtaining it and reverse engineering it was low.

The Alberta Information and Privacy Commissioner found biometric scanners to track hours of work were acceptable with certain conditions.

Company was transparent

Canfor took the right approach to implementing Touch ID as they were transparent about what they were doing from the start, says Penner.

“They were quite deliberate in announcing it prior to implementing the system – they had several meetings with various employee committees, they formally announced to the union what their intention was, when their implementation date would be, and what their expectations were going to be,” he says. “So when it came to the application of the KVP test [on whether an employer can rely on a unilaterally-imposed policy], the employer basically had done everything correctly because the only issue in the KVP analysis that was considered was, was this reasonable?”

The arbitrator noted that PIPA requires an organization to “consider what a reasonable person would consider appropriate in the circumstances” when it came to collecting and using personal information. Canfor’s purpose for implementing the Touch ID system was to integrate and modernize its timekeeping, attendance management, and payroll systems, as well as to verify employee time and attendance and increase operational efficiency.

There was no doubt that the biometric information collected was sensitive personal information under PIPA, the arbitrator said. However, the evidence was that the system only stored the original digital image of the fingertip temporarily and the biometric information that was kept was “a mathematical representation based on minutia data points” that could likely not be reverse engineered to re-establish the image. As a result, the intrusion on employee privacy was minimal, said the arbitrator.

The arbitrator also found that the other employee information connected to the biometric information, such as an employee’s name, address, and payroll information, was already in the employer’s possession. Ultimately, the intrusion on employee privacy was relatively limited, the arbitrator said.

Employee consent and human rights are some of the considerations when looking to implement biometric employee tracking, says an employment lawyer.

Information collection minimal: arbitrator

In addition, the manner of collection of the information – during an employee’s entry and exit from the workplace – was quick and only needed to record and verify time worked. This was reasonable and appropriate in the circumstances, the arbitrator said.

Penner notes that Canfor did not have to prove that there was a serious problem with buddy punching in its workplace to justify implementing Touch ID, given the relatively low intrusion on employee privacy.

“It’s a bit of a sliding scale, so the more draconian or the more invasive the employer’s policy, the more imperative it would be for them to demonstrate there is a real problem here to address,” says Penner. “By virtue of this biometric system being minimally invasive, their evidentiary threshold to suggest that it is designed to counteract this vulnerability didn’t need to go very far.”

“I think there was an assumption that buddy punching is a problem in every workplace that doesn’t have this kind of system, so the threshold that they had to meet was low because the system was so minimally invasive.”

An Ontario company breached its duty to accommodate three former employees when biometric scanning conflicted with their religious beliefs, an arbitrator ruled.

Alternatives less effective

The arbitrator noted that Canfor considered the use of swipe cards or fobs as alternatives, but it reasonably determined that the risk of false clocking in and out was still significant and close to the level of the old system.

“The biometric system could address vulnerabilities that the fob system and the key card system could not, which is basically buddy punching,” says Penner. “So, in that sense, that predicated some of the reasonableness analysis that the arbitrator needed to make.”

The arbitrator also found that other alternatives, such as using radios to determine if employees were present or having crew meetings at the start of each shift would be less effective at meeting Canfor’s purposes, due to the size of the worksite and the nature of the operations.

Given the relatively limited intrusion on employee privacy, the reasonableness of the purposes of implementing the Touch ID system, and the lack of effectiveness of other alternatives, the arbitrator determined that Canfor’s use of Touch ID was objectively reasonable in a proportionality analysis. The grievance was dismissed.

Changing workplaces

This is an interesting case because it involves 21st-century monitoring technology applied to a workplace organized in a 20th-century style, says Penner.

“It’s unclear what direction we’re going in, because we’re in this transition from what I would consider traditional work and non-traditional work – we are, as a society, moving away from that traditional model,” he says. “So it will be interesting to see how employers will leverage this type of jurisprudence – which is reflective of a traditional workplace environment – to a non-traditional hybrid work environment or working-from-home environments.”

“I think what we’ll see the next five years is increasing complexity in taking the existing jurisprudence in cases like this and trying to apply them to the hybrid work model,” he adds.

See Canadian Forest Products Ltd. (Plateau Sawmill Division) v. United Steelworkers Local 1-2017, 2023 CanLII 5478.

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