Class Action for Overtime Pay Given Green Light

Written by on April 15, 2013 in Employment Law Blog

On March 21, 2013 the Supreme Court of Canada ruled for the first time that employee class actions for pay for “off the clock” overtime work can proceed under the Class Proceedings Act of Ontario.

In Fulawka v. Bank of Nova Scotia the employee alleged that Scotiabank’s policies and practices for compensating overtime work performed by members of the putative class constitutes both a breach of class members’ contracts of employment and a breach of Scotiabank’s obligation to act in good faith, and on behalf of class members, seeks general and special damages totaling $350 million, as well as declaratory and injunctive relief. The Ontario Court of Appeal (Fulawka v. Bank of Nova Scotia) (Fresco v. Canadian Imperial Bank of Commerce) agreed with certifying the class action.

In Fresco v. Canadian Imperial Bank of Commerce the action was started by the putative representative plaintiff “on behalf of some 31,000 customer service employees” of CIBC, alleging that “CIBC breached its contractual and statutory duties to pay class members for overtime work that they are routinely required or permitted to perform in order to complete the common duties of their positions.”

In both cases the employees “allege that the overtime policies of the banks conflict with private law duties owed by the banks to the employees. The overtime policies required members to obtain prior approval from a manager in order to be compensated for overtime work that they were required or permitted to perform. Such a pre-approval requirement is contrary to the dictates of the Code, the plaintiffs submit. The employees allege that the banks used the “pre-approval requirement in their overtime polices to avoid their obligation under the Code to pay for overtime work that was “required or permitted” by the employer.” The employees say that “Scotiabank and CIBC failed to implement proper record-keeping systems to record the overtime hours worked by employees.”

Impact of Decision on Employers

  • Employers must have policies in place indicating in what circumstances, if any, overtime will be paid.
  • Extreme care should be exercised in drafting overtime policies so that they strictly comply with the appropriate legislation.
  • Strict adherence to these policies is required.
  • Employers should seek guidance from experienced Employment Law Counsel to ensure that any deficiencies or weaknesses in policies or in adherence to these policies are tightened up.

Impact of Decision on Employees

  • Certification of the class actions does not mean that the employees will be successful in their claim.
  • Warning – the limitation period to commence legal proceedings is two years.
  • As Courts in Canada are generally more favourable to employees, employees should consult with experienced Employment Law counsel to determine whether there is merit to a claim.

Minken Employment Lawyers is your Canadian source for expert Employment Law advice and advocacy on today’s employment law issues. Whether you are an employer or employee, we can help. Contact us to see how.

See also, “Overtime class actions given green light” and “Class Action Denied in CIBC Overtime Suit”, published in Canadian Employment Law Today.

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