This decision involves an intended class action instituted against the Canadian Imperial Bank of Commerce (“CIBC”), a federally-regulated bank, by one of its employees, Dara Fresco, claiming compensation for unpaid overtime wages. Ms Fresco’s action claimed unpaid overtime wages on behalf of all nonmanagement, non-unionized front-line-service employees of the bank going back to February 1, 1993. She alleged that the bank had breached its contractual obligation by systematically failing to pay for overtime work. In particular, she attacked the legality of the bank’s Overtime Policy (the “Policy”).
The basis of Ms Fresco’s claim was CIBC’s Policy which she purported to be illegal both as a breach of contract on the part of CIBC and because it permitted the bank to unjustly enrich itself . The Policy requires that employees seek approval in advance of any overtime work in order to receive compensation. In extenuating circumstances the approval may be sought after the completion of the overtime work. If the required approval is not obtained, the employees are not compensated for their overtime work.
Ms Fresco’s claim was that the Policy violated the Canadian Labour Code, R.S.C. 1985, c. L-2 (the “Code”), which requires that employees be paid one and one half times their regular wage when they work overtime.
The certification of the proceeding was rejected on the basis that “the action lacks the essential element of commonality” necessary for certification under Ontario’s Class Proceedings Act, 1992, S.O. c.6. Ms Fresco was unable to show that the failure to pay the overtime was systematic and for that reason it was seen by Justice Lax as a case better suited for individual assessment as opposed to a class proceeding.
Justice Lax found that on its face the Policy complied with the Code because it provided for overtime pay at one and one half times the regular wage. Requiring pre-approval of overtime work is not, in and of itself, contrary to the Code. The application of the Policy may have led to individual situations where overtime work was not approved but was permitted to happen with the knowledge of the employer. In this instance the failure to pay the employee for the overtime hours would have constituted a breach of the Code, but did not render the Policy illegal.
Justice Lax found that there was no evidentiary foundation to show any systemic wrongdoing on the part of CIBC. Although the Policy may have been misapplied from time to time, as described above, the misapplication of the Policy, resulting in breaches of the Code, was not carried out on a systematic basis. Instead she found that individual claims would each have to be investigated to find wrongdoing on the part of the Bank. On this basis she felt that there was no common issue among the class members and, as such, that a class action could not be certified.