Court Certifies Overtime Class Action

The Ontario Superior Court of Justice has ruled that representative plaintiff Cindy Fulakwa can proceed with her class action against Scotiabank on behalf of a class of more than 5,000 sales staff who worked in retail branches of Scotiabank from 2000 to the present.

Before a claim can proceed as a class action (instead of by individual claims by each plaintiff) the court has to “certify” that there is sufficient commonality of material issues to be determined among the members of the class (group of plaintiffs).  If there is insufficient commonality the court will refuse to certify the class, which means that although individual plaintiffs can choose to bring individual actions, the plaintiffs cannot proceed with their claim as a class action.

In this case, the court distinguished the claim against Scotiabank from an earlier, similar class action initiated by CIBC employees.  In the proposed class action against CIBC the court refused to certify the class because it found that there was insufficient commonality of the material issues to be determined among the class members.  By contrast, the court held in the class action against Scotiabank that there was sufficient commonality and so proceeding as a class action was appropriate.

The only real distinction appears to be that in the CIBC case the employees did not allege that the bank’s overtime policy was illegal, only that CIBC applied it in an illegal manner.  By contrast, in the Scotiabank case the employees alleged that the policy/practice was illegal because it was deficient – i.e. the bank failed to establish a system for recording overtime worked and because the policy and practice contained a “catch-22″ because employees were often required to work overtime without the ability to obtain prior approval.

A closer review of the two cases makes this distinction appear somewhat hollow:  in both cases the employees alleged that they worked overtime for which they were not paid; in both cases the banks had overtime policies and practices that applied throughout the organization; in both cases the policies required employees to seek prior approval for overtime; in both cases the Canada Labour Code obliged the banks to pay employees overtime pay for any overtime hours the employer “required or permitted” them to work in excess of standard hours of work; and in both cases the employees argued that the policy and/or its implementation was to blame.

In my respectful view, either the CIBC decision was correct and the Scotiabank decision is wrong, or vice-versa.  This appears to be a fundamental disagreement between the judges who presided over each case.  Given the importance and potential multi-million dollar liability facing Scotiabank, I expect the Scotiabank decision will be appealed to the Court of Appeal and possibly to the Supreme Court of Canada, where hopefully we will receive guidance on the distinctions drawn between the two decisions.

I encourage those interested to read the two decisions and try to spot the differences for themselves.

Jeremy Schwartz: [email protected]


The CIBC case:

The Scotiabank case:

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