Skip to content

On June 25, 2009, I reported on the decision in Fresco v. Canadian Imperial Bank of Commerce, in which a Superior Court judge refused to certify a class action for employees of CIBC claiming overtime pay. The issue has now been revisited in a proposed class action brought by employees of Scotiabank. In his decision in Fulawka v. Bank of Nova Scotia, 2010 ONSC 1148, Mr. Justice George Strathy of the Superior Court of Justice came to the opposite conclusion from that of his counterpart in the CIBC case, holding that systemic issues relating to the bank’s conduct made the class action a preferable procedure to that of individual claims by affected employees. The crux of Justice Strathy’s decision on the point is set out below:

The obligation of the employer to take active measures to prevent uncompensated overtime being worked has been recognized in labour arbitrations applying the Code: see Referee Emrich in T-Line Services Ltd. v. Morin, [1977] C.L.A.D. No. 422 at para. 33-34:

It is within the control and discretion of management to establish the hours of work and to supervise the work force effectively to avoid the triggering of overtime liability. Thus it is reasonable to cast the onus upon management to take active measures to regulate the hours that employees may work. In the absence of such measures, the employer runs the risk that through oversight or omission, workers are permitted to work overtime and thereby liability to pay overtime is triggered …

Viewed from this perspective, it is arguable that Scotiabank’s policy put too much emphasis on the employer’s interests and insufficient emphasis on the interests of Class Members. It is also arguable that it failed to protect Class Members against the risk that they would be required to work uncompensated overtime because of the demands of the jobs or their superiors. There is a basis in fact in this case for common issues based on the duty of Scotiabank to establish and implement a fair process to fulfill the duties it owed to the Class in relation to their overtime work.

The resolution of the issue of whether Scotiabank had a duty to put a fair and reasonable overtime system in place, and whether its system (including the pre-approval requirement) fulfilled this duty, is one that will advance the claim of every Class Member. If a common issues judge were to find that there was such a duty and that Scotiabank’s system was unfair and unreasonable, the absence of pre-approval would not be a defence to an individual overtime claim. While Scotiabank now acknowledges, and its new policy appears to reflect, that it has an obligation to pay overtime that has been “permitted,” its pre-2008 policies and practices did not reflect this acknowledgement.

There is also a factual basis for a common issue concerning Scotiabank’s record-keeping system. Scotiabank’s position is that the Plaintiff has failed to advance any evidence of a systemic flaw in its recordkeeping practices, and because the implementation of those practices was at the branch level, any inquiry into how records were kept must be conducted branch-by-branch and cannot be resolved on a Class-wide basis. I do not accept this. It amounts to Scotiabank saying that its record keeping system was so decentralized, varied and idiosyncratic that every claim for overtime must be examined on a case-by-case basis. Scotiabank cannot point to its own record keeping failures to defeat certification. This would not be an acceptable way for a bank to manage its customers’ money and it is not an acceptable way to manage the compensation to which its employees are entitled. There is evidence that, for most of the Class Period, Scotiabank did not have an adequate system in place for the recording of regular time and overtime worked by Class Members. The staff plan was nothing more than a record, prepared in advance, of the hours that employees were scheduled to work. It was not a record of hours actually worked. While employees were supposed to check and correct their hours after the fact, Scotiabank’s policy prevented them from recording and claiming for hours that had not been pre-approved. The “Catch 22” gave them no reason to record the hours they actually worked because they would not be paid unless the overtime had been pre-approved. The bank had no consistent corporate policy or system applicable to all branches, for the tracking of overtime. It had no system of tracking time in lieu” or of ensuring it was “cashed out”. It is appropriate to ask whether this was a breach of a duty owed to the Class.

The evidence before me, therefore, provides a basis in fact to ask whether Scotiabank owed duties to the Class to put policies and procedures in place to prevent overtime from being worked without compensation and to properly record all hours of overtime worked, whether pre-approved or not. There is also a basis to ask whether those duties were breached. The answers to these common issues do not depend on individual findings that have to be made with respect to each individual claimant. The answers will significantly advance the action because if they are answered in the affirmative the absence of pre-approval in any particular case may be irrelevant and the inability of an employee to prove the quantum of overtime hours worked may not be fatal to the claim. A conclusion by the common issues judge that the bank had a duty to pay overtime that was permitted or required, and that it breached a duty to establish a system to properly record such overtime, could result in a conclusion that the failure to prove overtime hours worked is not a bar to recovery, or that the absence of records is not an impediment to proof of damages.”