Overtime class actions in Canada are not dead. If you thought that last year’s court decision refusing to certify the class action against one of Canada’s largest banks, CIBC, meant the death of such law suits in Canada, think again. These are law suits where one or several employees act as a “representative plaintiff” to start a large claim against their employer on behalf of other similarly situated employees. They claim that overtime was worked but never paid for. Several recent legal developments in this area, both in Canada and the USA, should give Canadian employers renewed cause for concern.
First, CIBC may not be out of the woods yet. As you may recall, the primary claim against CIBC was for unpaid overtime on behalf of current and former, front-line retail bank branch workers. In the words of the Ontario Superior Court of Justice judge, the proceeding could not be certified as a class action due to “lack of commonality of an issue that would significantly advance the case”. It appears, however, that those who initiated the claim are not taking “no” for an answer. They have launched an appeal. It is scheduled to be heard March 24 and March 25, 2010. Some of the court filings for the appeal can be seen online.
Second, despite the CIBC decision, the Ontario Superior Court recently certified a similar claim. On February 19, 2010, the court unexpectedly certified a class action against the Bank of Nova Scotia (or “Scotiabank”). The case alleging $300- million in unpaid overtime involves approximately 5,300 sales staff across the country, some having worked for the bank since 2000. Third, further class actions of this nature appear to be on their way. Another class action was launched in February against the investment arm of the Bank of Montreal, BMO Nesbitt Burns. Similar to the earlier law suits, this action alleges that BMO did not pay its employees for overtime worked from 2002 to 2010. The suit also claims that the employer fostered a culture where employees were expected to work up to 80 hours a week and not claim overtime.
And it’s not just the big employers at risk.
The experience in the USA, which is ahead on the curve on this, is that small to medium size companies could be the next target for enterprising employee counsel. See the article at http://www.bizjournals.com/sacramento/st ories/2010/02/01/story1.html?b=1265000 400%5E2807911
As discussed in the article, while larger organizations have shown improved compliance with overtime laws, small to medium sized enterprises have become the new targets for enterprising plaintiffs’ counsel.
As one commentator put it, overtime complaints are “moving down the food chain from big corporations to midsize and small employers…”.
What Should Employers Do?
All of this is a reminder that you must keep your overtime practices and procedures up to date. You must ensure they comply with local employment standards laws. Most importantly, you must remember that someone who earns a salary, like those paid an hourly rate, may be entitled to overtime pay. Generally, most non-managerial employees are entitled to premium pay for overtime work, unless a specific legal exception applies.
Failure to keep proper records of overtime work can also be fatal. This will not only mean that you could be found in violation of Canadian employment standards laws. It will also mean that you are not in a position to properly defend yourself against overtime claims.