An innovative settlement agreement between the Bank of Nova
Scotia ("Scotiabank") and a class of bank branch
employees seeking compensation for unpaid overtime in Fulawka
v. The Bank of Nova Scotia has recently been approved by the
Ontario Superior Court of Justice ("ONSC").
In 2010, the ONSC certified a class consisting of more than
5,000 full-time retail branch employees of Scotiabank. The class
members alleged that their employer's overtime policies and
practices violated the provisions of the Canada Labour
Code regarding overtime pay. All told, the class members
claimed that they were allegedly entitled to $250 million in
general damages and $100 million in punitive damages.
The decision to certify the class was subsequently upheld by the
Divisional Court and the Ontario Court of Appeal, with leave to the
Supreme Court of Canada being denied in 2013.
According to terms of settlement approved in August 2014,
individual class members have until October 15, 2014 to submit a
claim for unpaid overtime to Scotiabank. Class members may submit
claims whether or not they have documentation to support their
claim. Scotiabank will then review each claim and pay class members
for each hour of required or permitted overtime worked, subject to
applicable provincial limitation periods.
If Scotiabank rejects or reduces a claim, it is required to
disclose the evidence relied upon to do so. Any dissatisfied class
member may then appeal to an independent arbitrator who has the
power to make a final ruling.
While it is not possible to determine the exact settlement value
at this time, counsel has predicted that class members will receive
up to $95 million in total compensation. The settlement also
requires Scotiabank to pay for the class members' legal fees,
which have been assessed at $10.45 million.
Lessons for employers
As is clear from the Scotiabank case, even if the underlying
merits of a claim are not clearly established, class action
lawsuits can be remarkably lengthy and expensive. In light of the
recent proliferation of class actions for unpaid overtime,
employers are advised to consider the following in order to avoid
common pitfalls associated with overtime claims:
Salaried employees Employees are not precluded from overtime pay
by mere virtue of the fact that they are on a fixed-salary. A
salary only compensates employees for non-overtime hours, up to and
including the prescribed overtime threshold (for example, 44 hours
per week in Ontario).
Exempt employees Avoid misclassification at all costs. If the
employer is going to rely on a prescribed exemption to the hours of
work and/or overtime provisions of applicable employment standards
legislation, such as the "manager and supervisor"
exemption, it is important to make sure that the employees in
question meet the legal tests established in the legislation and
Policies and procedures
Prudent employers establish written policies and procedures
governing overtime, including rules requiring approval for overtime
hours. It is also crucial that such policies are consistently
applied, and regularly renewed and updated.
The foregoing provides only an overview and does not
constitute legal advice. Readers are cautioned against making any
decisions based on this material alone. Rather, specific legal
advice should be obtained.
Unfortunately, reasonable accommodation for employees in the workplace continues to be the source of significant litigation and even today we continue to see outrageous examples of employers behaving badly.
We are now beginning to see reported cases involving charges and subsequent fines laid against employers for failing to provide information, instruction and supervision to protect a worker from workplace violence.
On October 13, 2016, the Supreme Court of Canada denied leave to appeal an Ontario Court of Appeal decision which ordered an employer to pay a former employee 37 months of salary and benefits following termination.
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