On June 26, 2012, the Ontario Court of Appeal released its
anticipated decisions in three overtime class actions –
Fulawka v. Bank of Nova Scotia (Fulawka), Fresco v. Canadian
Imperial Bank of Commerce (Fresco) and McCracken v. Canadian
National Railway Company (McCracken).
The Court permitted the "off-the-clock" overtime class
actions to continue against the defendant banks in Fresco and
Fulawka. However, it refused to grant certification in McCracken,
which involved a claim regarding the misclassification of employees
as exempt from overtime requirements.
In Fresco and Fulawka, the Court was tasked with reconciling the
divergent decisions of lower courts in seemingly similar cases
involving claims for unpaid overtime by front-line bank employees.
In deciding that both claims should be certified as class actions,
the Court substantially adopted the certification analysis of the
motion court in Fulawka, which had granted certification, and
rejected the lower court decisions in Fresco, which had come to the
opposite conclusion. Specifically, the Court held that in both
cases there were common issues relating to whether the
defendants' policies and practices could prevent class members
from receiving overtime pay, the determination of which would
advance the claims of all class members.
According to the Court, the differences in individual class
member's positions and experiences relied on by the lower
courts in Fresco to deny certification, as well as its focus on
whether the overtime policy in question was consistent with
statutory requirements, were not barriers to defining common issues
relating to the application and impact of the policies and
practices on class members. The Court ultimately held that these
alleged "systemic defects" could and should be considered
on a class-wide basis in both cases, even though both liability and
damage assessments would largely remain to be determined on an
In contrast, in McCracken, the Court found that there was no
basis to support a finding that the determination of whether or not
an individual was a manager and therefore exempt from overtime
requirements could be determined on a common basis. Given that the
proposed class members had different job responsibilities and
functions, worked in different areas and had different reporting
structures, any determination with respect to eligibility for
overtime would have to be made on an individual basis. The Court
also held that the common issue formulated by the lower court with
respect to the determination of the minimum requirements of being a
managerial employee would not advance the claims of the proposed
class members in any significant way. As the plaintiff could not
demonstrate that any significant part of the proposed class'
claims could be determined on a common basis, certification was
While these cases may be subject to leave to appeal applications
to the Supreme Court of Canada, employers should be aware that the
Ontario Court of Appeal has now given the green light to
off-the-clock overtime class actions, even where significant
individual issues regarding liability and damages will need to be
determined after the common issues trial. In contrast, and contrary
to first impressions, misclassification overtime claims may be more
difficult for employees to pursue by way of class action.
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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