The defendants in two recently certified overtime class actions,
Fulawka v. Bank of Nova Scotia (Fulawka) and
Fresco v. Canadian Imperial Bank of Commerce
(Fresco), have commenced leave applications before the Supreme
Court of Canada. Fulawka and Fresco were two of three unanimous
decisions relating to class actions claims for unpaid overtime
released by the Ontario Court of Appeal on June 26, 2012, which we
A British Columbia Labour Arbitrator who was faced with a
grievance raising substantially similar claims to those at hand in
Fulawka and Fresco has found in favour of the employees.
Specifically, in the Insurance Corporation of British Columbia
and COPE Local 378 case, the union claimed that: (i) the employer
breached the collective agreement by imposing an unwritten overtime
policy with more restrictive conditions for overtime payment than
those provided for in the collective agreement; (ii) the employer
failed to put in place a system to prevent employees from regularly
working unauthorized overtime; (iii) the employer did not
compensate these employees for overtime worked, despite its
obligation to do so under the collective agreement and employment
standards legislation; and (iv) the employer had not kept accurate
records of overtime worked as required by the Canada Revenue
The employer took the position that it had consistently and
clearly communicated to the union and its employees that employees
were not permitted to work overtime without first obtaining
authorization, and that if they chose to work beyond their
scheduled hours, they did so unilaterally and would not be
compensated. Similar to the Fulawka and Fresco cases, the crux of
the claims advanced by the union was that the overtime policy of
the employer imposed more restrictive conditions for overtime
compensation than those set forth in applicable law (in this case,
the collective agreement).
The Arbitrator's Decision
The Arbitrator found that the employer's unwritten policy
was inconsistent with the collective agreement. This is similar to
Fulawka and Fresco, in which the plaintiffs alleged that the
employers had used pre-approval requirements in their overtime
policies to avoid their obligation to pay for overtime worked.
Whereas in the Fulawka and Fresco class actions the court did not
decide the cases on their merits, in this case the Arbitrator ruled
in favour of the union and declared that the employer was in breach
of the collective agreement by permitting or condoning employees to
perform unpaid overtime work. The Arbitrator ordered the employer
to: (i) cease permitting or condoning employees to perform such
unpaid work; (ii) implement measures to prevent employees from
working beyond their regularly scheduled hours; and (iii)
compensate employees who had worked, but were not paid, overtime in
2010. The Arbitrator further ordered that the employer pay the
union for the additional dues based on the additional
This case is a clear indication that the reasoning in the
Fulawka and Fresco cases will be applied. Accordingly, we encourage
employers to ensure that: (i) their overtime policies are compliant
with statutory requirements and with their employment contracts;
(ii) they take active measures to unsure employees do not work
unauthorized overtime; and (iii) they implement measures to ensure
that employees' hours are being accurately tracked, whether or
not those hours are being worked with the employer's prior
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