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Court ruling on unpaid overtime not expected to spark deluge of cases

Dara Fresco, seen here at a news conference on June 6, 2007, in Toronto

Tibor Kolley/The Globe and Mail

Ontario's highest court has revived a five-year battle waged by teller Dara Fresco against the Canadian Imperial Bank of Commerce over whether her employer illegally denied her and her co-workers across the country $600-million in overtime pay.

In three key rulings issued Tuesday, the Ontario Court of Appeal laid down new ground rules for class-action lawsuits against employers over unpaid overtime. While the U.S. has seen a wave of such claims, legal observers say that despite these latest rulings, they do not expect a deluge of new cases here.

The appeal court overturned lower court rulings that denied Ms. Fresco's case the "certification" required for it to proceed as a class action on behalf of 30,000 CIBC employees. The appeal court rejected a previous decision that there was no evidence of a "systemic policy or practice of unpaid overtime at CIBC."

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Despite being the representative plaintiff at the centre of the high-stakes fight, Ms. Fresco is still employed by the bank.

The court made the move as it upheld the certification of a similar class-action lawsuit filed by Cindy Fulawka, a personal banker who worked for the Bank of Nova Scotia in Saskatchewan for 20 years. Her lawsuit alleges that 10,000 Scotiabank employees were denied overtime and demands $350-million. She filed her case, with the same lawyers, after hearing about Ms. Fresco's case.

But the three-judge panel overturned the certification of a case filed by Canadian National Railway Co. employee Michael McCracken over unpaid overtime. This case differed from the lawsuits against the banks, as it alleged that Mr. McCracken and other CN "front-line supervisors" had been "misclassified" as managers and denied overtime.

The appeal court ruled this could only be determined individually, by assessing each employees' duties, denying the lawsuit class-action status. A CN spokesman declined to comment on the case.

In the cases against the banks, the plaintiffs alleged their employers expected employees to work late but that their overtime policies, such as requirements to secure approval before working extra hours, made it difficult for employees to get paid. They also alleged the banks had poor record-keeping systems for overtime.

None of the allegations have been proven. The rulings Tuesday allow the two cases to go ahead to trial as class actions. The banks in both cases have denied the allegations. It was unclear whether the banks would seek leave to appeal the decisions to the Supreme Court of Canada.

In an e-mail, Scotiabank spokesman Andrew Chornenky said the bank was disappointed with the decision and was considering its next move.

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"We are reviewing this decision and are keeping all options on the table," he said. "Scotiabank is committed to treating its employees fairly, equitably and with respect and all our human resources policies, including overtime policies, reflect these principles."

In all three cases, a team of lawyers led by Louis Sokolov of Sack Goldblatt Mitchell LLP and David O'Connor of Roy Elliott O'Connor LLP, represented the plaintiffs.

"These decisions take into account the practical reality of workplaces and the fact that employees may be quite reluctant to make individual claims against their employers," Mr. O'Connor said, calling Tuesday "a very good day for employees and access to justice."

Mr. Sokolov said the rulings open the door for other groups of employees to seek back pay. But he did not expect a rash of new cases, noting that only a few have been filed since these two.

He said many banks and other large employers, prompted by these class actions, reviewed their policies to ensure employees entitled to overtime are now getting paid.

"Employers took a good hard look in the mirror, and looked at their processes," he said.

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CIBC did not respond to requests for comment on Tuesday.

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About the Author
Toronto City Hall Reporter

Jeff Gray is The Globe and Mail’s Toronto City Hall reporter. He has worked at The Globe since 1998. From 2010 to 2016, he was the law reporter in Report on Business, covering Bay Street law firms and white-collar crime. He won an honourable mention at the National Magazine Awards for investigative journalism in 2010. More

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