Last week the Ontario Superior Court dismissed the
plaintiffs' certification motion in the much publicized
"tellers" proposed overtime class action against CIBC,
effectively bringing the class action lawsuit to a grinding
The claim, which was commenced in June 2007, was brought on
behalf of tens of thousands of current and former CIBC employees
who worked at the bank's Canadian retail branches as front-line
customer service employees. The lead plaintiff, Dara Fresco,
claimed that CIBC failed to comply with the minimum requirements of
the Canada Labour Code by failing to pay statutory
overtime pay to her and other proposed class members and by failing
to keep proper records of its employees' hours of work. $500
million in damages were sought on behalf of the class.
In this case, there was no dispute as to the CIBC front-line
staff's eligibility to receive overtime pay. At issue was the
legality of CIBC's overtime policy and practice, and whether or
not it had required or permitted overtime work to be performed for
which overtime compensation had not been provided. One of the key
allegations was that CIBC's policy, and in particular, the
requirement that employees seek pre-approval prior to working
overtime hours, contravened the Canada Labour Code.
CIBC's policy provided that "[o]vertime, for which
prior management approval was not obtained, will not be compensated
unless there are extenuating circumstances and approval is obtained
as soon as possible afterwards..." Significantly, the
court found that the very language of the Canada Labour
Code contemplates the right of an employer to pre-approve
overtime. In order to "require or permit" the work to be
performed, the court noted that management must be directly
involved in deciding whether the employee works overtime. The court
noted that a policy requiring pre-approval is one legitimate way of
managing employees' working hours. Therefore, the court found
that CIBC's policy was not unlawful on its face.
While employers may take some comfort from the court's
recent pronouncement that an overtime policy requiring pre-approval
is not illegal per se, it remains the case for banks and
other employers subject to federal jurisdiction (and for employers
subject to similar provincial legislation as well), that once the
work is required or permitted to be performed, an employer cannot
escape its liability to pay overtime wages to eligible employees,
regardless of what the company's policy says.
That latter point was another of the crucial allegations
advanced by the plaintiff – namely, that CIBC routinely
required or permitted its front-line staff to work overtime hours
without recording their time or paying them for the overtime hours
worked. The court found that there was no evidence of systemic
wrongdoing. The court found that the evidence showed a variety of
individual circumstances that might give rise to unrelated bases
for unpaid overtime claims that could only be resolved individually
by considering the evidence of the person advancing the claim, the
evidence of various other current and former CIBC employees who
managed and/or worked with those persons, and various records
maintained at various locations by CIBC. The action could not be
allowed to proceed as a class action because there was not enough
commonality in the actual wrong that was alleged against CIBC, nor
was there sufficient evidence to support it. In other words, the
issue of an employee's entitlement to unpaid overtime under the
policy could only be determined on an individual basis.
While this decision might dampen the enthusiasm of other
potential class action claimants who may have been waiting in the
wings and hoping for a different result, employers should not take
the threat of an overtime class action lightly, merely as a result
of the employer's success in this case. Much of the court's
reasoning in the CIBC decision is specific to the particular facts
of this case. Moreover, the CIBC decision deals only with one type
of overtime pay claim - the "off-the-clock" variety, in
which the claimants' overtime pay eligibility under the statute
was not disputed. Other class action claims may arise on different
facts, or where the claim is a so-called
"misclassification" action in which the employer is
alleged to have erroneously treated all members of the proposed
class as ineligible for overtime.
Thus, employers are still cautioned to conduct a thorough review
of their overtime pay policies and practices and to carefully
assess which employees are exempt and which are eligible for
overtime pay in accordance with applicable legislation.
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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