A recent decision from the Ontario Superior Court in favour of the Canadian Imperial Bank of Commerce (“CIBC”) is being proclaimed as a major win for employers in their efforts to contain the flurry of employee class actions for overtime claims which have emerged in recent years.
In Fresco v. Canadian Imperial Bank of Commerce, released in June of this year, the Court refused to certify a class action on behalf of non-managerial and non-union CIBC employees who were claiming an excess of $600 million in damages for allegedly unpaid overtime. The Court found that there was no commonality to the large class of employees seeking redress in the claim, with the group numbering potentially in the range of 30,000 having what are essentially individual claims.
“The central flaw in the plaintiff’s case,” said the Court, “is that instances of unpaid overtime occur on an individual basis.” CIBC successfully asserted that its existing overtime policy, which provided for compensation for overtime in specific circumstances, did not, on its face, create an illegal arrangement. Under the CIBC policy, employees were obliged to obtain managerial approval in advance of working overtime unless an emergency did not warrant obtaining such approval. In all cases, CIBC’s process required that claims be submitted promptly. The judge said there was nothing illegal in having such a policy, and there was certainly no evidence to support the assertion by the representative plaintiff and her counsel that CIBC had a systemic policy or practice to deprive eligible employees of their statutory rights under the Canada Labour Code to be paid overtime.
In rejecting the class action, each potential class member was found by the Court to have an individual claim. Therefore, the judge directed that any such cases required “individual examination of the specific circumstances that underline each class member’s claim.”
The CIBC class action was one of a number of similar claims filed in recent years, and each of these has received significant media attention. The decision in this case is, on a very narrow basis, mere confirmation of how the class action procedure will be applied to unpaid overtime cases. The more broad trend that this case reflects, however, is the continuing swing of the pendulum back towards more pro-employer reasoning.
This case does not in any way amend the requirement that employers compensate employees for overtime which they work. Indeed, one of the reasons why CIBC appears to have been successful in this case was the existence of a clear policy for how individuals could be compensated for working overtime. As a result, this decision reinforces the importance of employers reviewing and being in compliance with applicable employment standards legislation and, if challenged, being able to marshal appropriate evidence to reflect compliance with legal requirements and company policies.