Court dismisses overtime class action suit against CIBC

Ontario court says bank’s overtime policy was not illegal and employees would have to pursue claims for unpaid overtime on an individual basis
|employmentlawtoday.com|Last Updated: 06/22/2009

A $600 million class action suit against the Canadian Imperial Bank of Commerce (CIBC) for unpaid overtime will not go forward after the Ontario Superior Court of Justice refused to certify it.

CIBC employee Dara Fresco filed the lawsuit in 2007, claiming she was forced to work between two and five hours per week beyond her normal scheduled hours and wasn’t paid for the overtime. She said the extra hours were a regular occurrence and she was expected to work them to do her job properly, which was contrary to the Canada Labour Code. Fresco applied to have the suit certified as a class action on behalf of other CIBC employees who faced similar expectations of working unpaid overtime.

However, the court refused to certify the the lawsuit, finding the real issues to be decided didn’t lend themselves to a wide class action determination. It found CIBC’s overtime policy specified employees could work overtime if pre-approved or requested, and gave employees a choice between receiving payment or lieu time worth one and one-half times their regular hourly pay. This policy provided a greater benefit than the statutory minimum and was not illegal, the court said.

The court found it was CIBC’s application of the overtime policy, as claimed by Fresco, that could be illegal.

“Any losses that Ms. Fresco or class members may have suffered were not caused by an allegedly illegal policy, but rather by a failure independent of the policy to compensate for overtime hours that were required or permitted,” the court said. “Ms. Fresco’s real complaint is not that the policy is illegal, but that the policy was applied in an illegal manner so as to require or permit class members to work unpaid overtime.”

Because the issue was the application of the policy and not the policy itself, the court found a class action approach was not appropriate because the effects would have to be examined on a case-by-case basis for each employee. As a result, there was no common issue that would make a class action approach the best way to hear the case.

The court agreed Fresco had a valid cause of action for her unpaid overtime, but said she, along with other affected employees, would have to pursue the matter through individual claims.

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