Overtime class actions denied leave to appeal

March 28, 2013

As previously discussed here and here, in 2012 the Ontario Court of Appeal certified two class actions concerning overtime against Canadian banks: Cindy Fulawka v. Bank of Nova Scotia and Dara Fresco v. Canadian Imperial Bank of Commerce.  Both cases involved allegations that the respective employer’s overtime policy was in violation of the Canada Labour Code. The Ontario Court of Appeal reviewed the lower court’s contrasting decisions, and determined that the cases should be certified as class actions, as both presented common issues regarding whether the overtime policies and practices prevented certain employees from receiving overtime pay.

Each of CIBC and Bank of Nova Scotia sought leave to appeal the decision of the Court of Appeal granting certification to the Supreme Court of Canada.  However, the Supreme Court denied leave to appeal in both cases on March 21, 2013.  Accordingly, the lawsuits will now proceed as class actions on the common issues.

However, and as noted in our prior blog post, the Ontario Court of Appeal determined that should the class members succeed at trial, damages would be determined on an individual, and not aggregate, basis.  This means that in order to prove damages, each individual in the class, whether a current or former employee, will be required to individually establish any overtime owing to him or her.  This finding is significant, as the two cases involve approximately 30,000 employees, with damages claimed against BNS and CIBC amounting to $350 million and $500 million, respectively. 

Our views:

The Supreme Court’s denial of leave is a strong indication that an employer’s alleged failure to properly frame and implement overtime policies may result in class action proceedings.  Further, and as we previously discussed, recent arbitral jurisprudence indicates that the Court of Appeal’s reasoning regarding the policies is being applied to individual claims regarding overtime policies and entitlements.  Accordingly, we strongly encourage employers to revisit their overtime policies to ensure that they: (i) meet the statutory requirements; and (ii) are administered so as to not create a situation whereby employees are “permitted or suffered” to perform unauthorized work in excess of applicable overtime thresholds.

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