"Off-the-clock" overtime class actions turned on as Supreme Court of Canada denies leave to appeal

March 28, 2013

On Thursday, March 21, 2013, the Supreme Court of Canada dismissed the applications for leave to appeal two decisions of the Court of Appeal for Ontario with costs: Fulawka v. Bank of Nova Scotia and Fresco v. Canadian Imperial Bank of Commerce. Both cases are “off the clock” overtime class actions brought on behalf of certain bank employees in which it is alleged that their employers’ policies and practices for compensation of overtime work wrongfully denied them overtime pay under the Canada Labour Code, breached their employment contracts, and breached a duty of good faith owed to them by their employer. 

Although the actions are based on similar allegations, the lower courts arrived at different conclusions on the certification motions: the claim against the Bank of Nova Scotia was certified and the claim against CIBC was not.  In the former, the claim was certified on the basis that the bank’s failure to pay overtime was alleged to be systemic rather than individual (the certification decision was upheld at the Divisional Court). In the latter, the motion judge refused certification holding that the claims for overtime had to be determined on an individual basis (this decision was also upheld by the Divisional Court). 

In its “overtime trilogy” of decisions released in June, 2012, the Court of Appeal for Ontario stated that both motions should “succeed or fail together” and ultimately determined that both claims should be certified as class actions.[1]

With the Supreme Court’s denial of the banks’ respective applications for leave to appeal certification of the actions, the claims are now slated to proceed to common issues trials on their merits.  While the trial of the common issues, and therefore any decision on the merits of the claims, is likely far in the future, as noted in a previous post on our Employment & Pension Law blog, in light of these decisions, employers may wish to consider their overtime policies to ensure that they comply with any relevant statutory requirements.

 


[1] The third decision in the trilogy was McCracken v. Canadian National Railway Company a “misclassification” case in which the main issue was whether the class members whose positions had been designated managerial in nature (resulting in an exemption from overtime pay requirements) were entitled to overtime pay.  The Court of Appeal found that there were too many individual issues and set aside the certification order.

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