Ontario Court of Appeal Dismisses Employee Overtime Class Action
In a decision with potentially far-reaching implications for "wage and hour" class actions, the Ontario Superior Court of Justice has dismissed a proposed class action claiming $600 million in lost overtime and punitive damages against the Canadian Imperial Bank of Commerce (CIBC). Brought on behalf of current and former non-managerial branch employees, the suit claimed that the CIBC's overtime policy violated statutory and contractual overtime rules by requiring employees to obtain advance approval in order to be compensated for overtime hours.
The crux of the plaintiff's case was that CIBC systemically assigned more work than could be performed within standard working hours and then required employees to work overtime "off the clock" to complete their work. The plaintiff argued that the bank's policy of routinely requiring unpaid overtime work raised common issues. The Court disagreed, finding that there was no evidence of systematic wrongdoing and, even if there were such evidence, each claim would still have to proceed individually. Justice Joan Lax dismissed the plaintiff's motion to certify the claim as a class action, holding that the action lacked "the essential element of commonality" because there was "no asserted common issue capable of being determined on a class wide basis". Instead, the Court ruled that any overtime claims against CIBC must proceed individually.The Court found that the bank's overtime policy itself was not unlawful. Requiring pre- approval of overtime did not violate the statutory overtime provisions because "an employee cannot foist services on an employer and expect to be paid wages for them". Further, the policy offered a more favourable benefit than the Canada Labour Code because it offered employees a choice between overtime pay and time in lieu. The plaintiff's real complaint, the Court held, was not with the policy but with the bank's alleged practice of requiring overtime work without payment, contrary to the policy. This was an issue to be decided on an individual basis. In any event, the Court held that even in the face of systemic wrongdoing, each claim would have to be resolved through individual fact-finding and legal analysis because despite the "superficial appearance of commonality", instances of unpaid overtime occur on an individual basis.
Plaintiff counsel has already announced it is considering appealing the CIBC decision. Given the amount of damages involved and the national importance of the issues, an appeal seems likely. If upheld on appeal, the ruling could sound the death knell for similar class actions.
We will continue to monitor and provide updates to our readers as the courts define the role of class actions in employment-related claims.
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