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Plaintiff takes another swing in long-running CIBC lawsuit

CIBC is required to submit its response by mid-April.


The largest employment class-action lawsuit ever brought in Canada will be back in the spotlight in the months ahead after a lull in the decade-long legal fight.

Canadian Imperial Bank of Commerce is preparing to renew its defence against the charge that it breached its duties by failing to properly record and compensate staff for overtime hours worked at its branches from 1993 to 2009. Roughly 31,000 tellers and other front-line employees are claiming that they regularly worked overtime for which they did not get paid and are suing the bank for $600-million in damages.

Lawyers for the class are accusing the country's fifth-largest bank by assets of producing evidence in court that "now appears to be false, misleading or contradicted by documents in CIBC's possession," according to a filing last year in the Ontario Superior Court of Justice. The plaintiff is alleging that a witness for CIBC made these assertions in a 2008 affidavit, when the bank fought against court recognition of the group led by then-teller Dara Fresco as a class.

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None of the allegations have been proven in court.

In a bid to finally resolve the long-running dispute in their favour, lawyers for the plaintiff are urging Justice Edward Belobaba to issue a summary judgment. Their motion is scheduled to be heard in late August in Toronto.

"We are glad that Ms. Fresco and the more than 30,000 members of the class will finally have the opportunity this summer to have the merits of their lawsuit heard in court," said Louis Sokolov, a lawyer at Sotos LLP, one of three law firms that represent the plaintiff. "It took years, great expense, and multiple court hearings to correct the initial ruling that would have denied them that right."

CIBC is required to submit its response by mid-April. The bank has vigorously denied any allegations of systemic non-payment of overtime ever since Ms. Fresco initiated the landmark claim over unpaid overtime in June, 2007.

"In their motion, lawyers for the plaintiff have taken some of CIBC's evidence and documents out of context, which will become evident once CIBC files our responding materials," CIBC spokeswoman Caroline Van Hasselt said in an e-mailed statement. "Under our policy, where overtime is required or permitted, it is paid."

The outcome of this case will be closely watched in Canadian legal circles, in addition to the banking industry, as it could set a key precedent for labour law. The legal action first caught the attention of other Canadian employers when it was launched in 2007, prompting many companies to review and revise their overtime practices.

Claims over unpaid overtime were also initiated against the Bank of Nova Scotia in 2007 and BMO Nesbitt Burns Inc. in 2010. Both actions have since been settled. Another overtime claim against CIBC filed on behalf of analysts and investment advisers was dismissed after failing to be certified to proceed as a class.

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In the Fresco case, lower courts at first declined to certify it as a class action, but those decisions were overturned. The Supreme Court of Canada ruled in 2013 that it could proceed as a class action, nearly five years after Ms. Fresco brought the case forward.

In their recent motion, lawyers for the plaintiff argue that evidence in the 2008 affidavit of John Silverthorn, the bank's main corporate witness, "frustrated the progress of this action."

Mr. Silverthorn, then CIBC's senior vice-president of human resources for retail markets, said that the bank regularly evaluated its policies for overtime pay and "none of these reviews and inquiries have revealed any systemic issues with respect to overtime." He added that branches had been staffed so that employees could complete their assigned tasks "during regularly scheduled hours."

But lawyers for the plaintiff say there were "systemic deficiencies" and inconsistencies in how the bank's overtime policies were implemented from 1993 to 2009, referring to material produced by CIBC in 2014 and 2015. They argue that CIBC "discourages" its front-line employees from claiming overtime hours and failed to prevent these employees from working extra hours for which it did not intend to compensate, their filing states.

CIBC declined to comment on these specific allegations because the matter is before the court.

The bank stated in court filings that its record-keeping practices and policies related to overtime were consistent with the Canada Labour Code and, at times, more generous than what had been required by law.

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When certain retail employees worked more than eight hours a day or 37.5 hours a week, they were entitled to receive 1.5 times their regular wage compensated in pay or time off in lieu. Federal law, in contrast, states that overtime should be paid on a weekly basis after 40 hours a week.

CIBC's policy required any overtime to be preapproved by a supervisor. But even if this was not done, the bank says that it didn't use it as a reason to refuse compensation, "as long as the class member was required and permitted to work those hours."

However, CIBC has produced internal documents – including employee surveys, e-mails and presentations – that appear to contradict the bank's defence and Mr. Silverthorn's affidavit, the plaintiff argues.

One CIBC file summarizing a 1999 employee survey said: "Non compliance: It is recognized, both by employees and business units, that overtime is not always being paid for." In 2005, the bank identified 70 gaps in meeting federal and provincial requirements for hours of work, overtime, election provisions and statutory holidays, one file shows.

Another from that year referring to overtime pay says that "even where policies are in place, they are not consistently and universally followed," while one human resources consultant said: "Payment of overtime is avoided like the plague."

CIBC paid about $3.1-million in overtime to class members from 2003 to 2007, Mr. Silverthorn said. A total of 19,440 employees received no overtime pay and the 9,827 who did were paid an average of 3.5 hours a year.

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About the Author
Capital Markets Reporter

Christina Pellegrini is a reporter at The Globe and Mail and a regular contributor to Streetwise, covering capital markets, the exchange business and market structure.She writes about the capital markets divisions of BMO, CIBC and National Bank; independent brokerages such as Canaccord Genuity; and the Canadian operations of foreign dealers including JP Morgan, Goldman Sachs, Credit Suisse and Citigroup. More


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