The Superior Court of Ontario has refused to certify a “class action” brought forward by current and former employees of CIBC in which the employees were seeking compensation for unpaid overtime.

In order to succeed on an application for certification of a class proceeding, the moving party must show that there is a cause of action that is shared by an identifiable class from which common issues arise. It must also be shown that these issues can be resolved through the class action proceeding in a fair, efficient and manageable way that advances the proceedings, achieves access to justice and judicial economy, and modifies the behaviour or wrongdoing.

CIBC’s overtime policy provided that in order to be compensated for hours worked in excess of the bank’s standard hours of 37.5 hours per week or 8 hours in a day, the excess hours had to be authorized in advance by a manager. An employee would not be compensated for unauthorized hours unless there were extenuating circumstances and approval was obtained as soon as possible afterwards. The policy also provided that overtime could be compensated as time off in lieu of pay where the employee requested this and if management authorized the arrangement.

The Court found that CIBC’s overtime policy was not illegal. The Canada Labour Code contemplates the right of an employer to pre-approve overtime, as it provides that employees may exceed maximum hours only where the employer permits or requires it. The judge noted that where an overtime policy contains a provision requiring authorization, the employee is not entitled to work overtime at his or her own initiative and then claim entitlement to overtime pay. Conversely, an employer cannot avoid its statutory obligations by knowingly permitting employees to work overtime and then later taking the position that the work was not authorized.

In the circumstances, the judge found that a class proceeding was not the preferable procedure through which to resolve the claims for unpaid overtime because the claims by the class members did not raise common issues. The claims by various members of the proposed class for unpaid overtime arose not because the policy was illegal on its face but due to an alleged failure by CIBC, independent of the policy, to compensate specific individuals for permitted or authorized hours of overtime that were claimed to have been worked.

Provincial overtime provisions may differ from the Canada Labour Code. In Ontario, for example, employers have been required to pay overtime pay for overtime hours worked above the statutory threshold even where the hours were not authorized. Despite the differences in the legislation, it is nevertheless a prudent practice to have a policy that requires overtime to be authorized in advance and, where appropriate, employers should apply progressive discipline where employees fail to first seek that authorization.