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There was much publicity a few years ago when claims began surfacing of unpaid overtime at Canada’s chartered banks. The spectre of a limitless number of claims made for interesting reading. On June 18, 2009, Justice Joan Lax of the Ontario Superior Court of Justice had occasion to consider the desirability of a class action in these circumstances. The stakes were high for everyone involved. The certification motion in the case of Fresco v. Canadian Imperial Bank of Commerce, 2009 CanLII 31177 (S.C.J.) was argued over the course of five days and involved no less than ten lawyers. Unfortunately for the affected employees, Justice Lax decided that a class action was not an appropriate procedure for this type of claim. Barring a successful appeal, the decision may for practical purposes grind these cases to a halt, as it would likely not be economically feasible to pursue the claims individually.

In order to certify a claim as a class action, it is necessary to show that there are common issues involved in the proposed proceeding which are more suitable to be adjudicated on a class wide as opposed to an individual basis. The central allegation in the action was that CIBC had a systemic policy of failing to pay overtime to its employees. However, the evidence put forward by some twelve employees showed differing circumstances: one said that time spent using a breast pump should be counted towards her overtime entitlement; another said that smoking breaks should be counted; another arrived a half-hour early as she was driven to work by her husband and said that time should be counted; on cross-examination before the hearing, two part-time employees admitted they were paid for the hours worked and received the pay to which they were entitled.

Faced with these circumstances, Justice Lax said “In my view, that evidence does not provide a sufficient basis in fact to show the existence of systemic wrongdoing. What it shows is a number of individual circumstances that arise for disparate reasons and require individual resolution.” She added “The individual issues in this case are front and centre and it would be virtually impossible to embark on a trial of the common issues without engaging in an individual examination of the specific circumstances that underlie each class member’s claim. The court would be asked to determine systemic wrongdoing either in a factual vacuum or on the basis of an individual examination of each claim, which defeats the very purpose of a class action.”

Given the stakes involved, there will undoubtedly be an appeal of the decision. In the meantime, make no mistake: this is a big win for the banks.