Northern Exposure

Overtime Class Action Claims: The Second Wave?

By Sara Parchello

Overtime class actions in Canada aren’t 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 lawsuits in Canada, think again.

These lawsuits — in which one or several employees act as a “representative plaintiff” to start a large claim against their employer on behalf of other similarly situated employees — are still showing up, claiming that overtime was worked but never paid. Several recent legal developments in this area, both in Canada and in the United States, 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 because of “lack of commonality of an issue that would significantly advance the case.” It appears, however, that those who initiated the claim aren’t taking “no” for an answer. They have launched an appeal. It’s scheduled to be heard March 24-25. 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, 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 the way. Another class action was launched in February against the investment arm of the Bank of Montreal, BMO Nesbitt Burns. Similar to the earlier lawsuits, this action alleges that BMO didn’t 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 United States, which is ahead of the curve on this, is that small- to medium-sized companies could be the next target for enterprising employee counsel. (See article).

As discussed in the article, while larger organizations have shown improved compliance with overtime laws, employee attorneys are taking on small- to medium-sized employers.

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 also can be fatal. This will not only mean that you could be found in violation of Canadian employment standards laws, it also will mean that you’re not in a position to properly defend yourself against overtime claims.

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