In the last few years, a number of proposed class actions have been commenced in Ontario seeking compensation for unpaid “overtime” wages. They raise allegations regarding “off the clock” unpaid time and “misclassification.” The cases arose in various sectors, including banking, accounting firms and a railway.
To date, the decisions on whether these claims ought to be certified have mixed results. Some have been certified and some have not. Cases are currently making their way up the appellate ladder. Three cases currently under reserve by the Ontario Court of Appeal are: Fulawka v. Bank of Nova Scotia, Fresco v. Canadian Imperial Bank of Commerce and McCracken v. Canadian National Railway.
In the midst of this uneven landscape, a judge with particular expertise in class actions, Justice G.R. Strathy, released his decision in Brown v. Canadian Imperial Bank of Commerce on April 27, 2012. In a forceful decision, Justice Strathy refused to certify this overtime claim. It is of note that, two years earlier, Justice Strathy had certified the “off the clock” claim in Fulawka v. BNS.
In Brown v. CIBC, the proposed class included “Analysts” and “Investment Advisors.” The plaintiff claimed these employees had been “misclassified” as “managers” and wrongfully excluded from overtime eligibility. Under the legislation, a “manager” is generally not entitled to overtime payments.
Justice Strathy noted that the duties and responsibilities of “analysts” varied widely. He stated, “Some analysts unquestionably have managerial responsibilities. Others unquestionably do not. Others fall in a gray area.” There were also individual variations in the responsibilities of investment advisors.
Justice Strathy concluded that:
- Class members had little in common except their job names. The key issue of fact – namely whether or not a person has managerial responsibilities - could not be determined on a class-wide basis. There was no common issue.
- There was no workable methodology to resolve the key factual issue. Statistical sampling could not determine liability, and the job duties of proposed class members were too dissimilar for statistics to be useful.
- The common issue found by Perell J. in a misclassification claim in McCracken v. CN, asking “What are the minimum requirements to be a managerial employee at CN?” would not work in this case. It could not avoid the individual determinations of eligibility for overtime. (Justice Strathy also noted that the correctness of the decision had been questioned when leave to appeal had been granted by the Divisional Court.)
In essence, Justice Strathy found that for a misclassification overtime claim to have any hope of being certified, it must at a minimum have a class with “identical or similar” job duties.
The book on overtime class actions in Ontario has yet to be written, but in the meantime Brown v. CIBC is a significant chapter.