Takin' Care Of Business And Working Overtime: Ontario Court Of Appeal Releases Key Decisions On Overtime Class Actions

Author:Ms Laura Fric, Mary Paterson, Adam Hirsh and Karin Sachar
Profession:Osler, Hoskin & Harcourt LLP

On June 25, 2012, the Ontario Court of Appeal released decisions in the Scotiabank,1 CIBC,2 and CN3 overtime class actions. The Court held that the employees' claims for overtime pay could be certified as class proceedings against the banks, but not the railroad.

There are two general types of unpaid overtime claims: "misclassification" cases and "off-the-clock" cases. "Misclassification" cases, such as CN, involve allegations that the employer improperly classified employees who are eligible for overtime as being ineligible by designating them as managers. "Off-the-clock" cases, such as CIBC centre on an allegation that there was a practice of systematic unpaid overtime, and eligibility for overtime pay is not at issue. The Scotiabank case is a hybrid.

In this trilogy, the Court refused to certify one misclassification case (CN), but certified the other (Scotiabank), explaining that misclassification cases will only be appropriate for certification in limited circumstances.  The Court also certified both off-the-clock cases.

Misclassification Cases Only Appropriate for Class Actions in Limited Circumstances

In CN, the plaintiff argued that CN employees who were first line supervisors were improperly classified as managers and denied overtime pay, which they would otherwise be entitled to under the Canada Labour Code (the Code). CN argued that there was such a diversity in the roles of first line supervisors that the managerial status of class members could not be determined on a class-wide basis. The certification motion judge agreed that the managerial status of each employee had to be assessed individually, but nonetheless certified the question - "What are the minimum requirements to be a managerial employee at CN?" – as a common issue.

The Court of Appeal rejected this approach, holding that the absence of commonality was fatal to certification. The Court held that misclassification cases should only be certified where the class members perform similar jobs, providing a fundamental element of commonality.4 Furthermore, the job functions and duties of class members must be sufficiently similar that the misclassification element of the claim can be resolved without considering the individual circumstances of class members.5

The Court did certify the misclassification of a subset of employees as a common issue in Scotiabank. The Court found that those class members had sufficiently similar responsibilities that certification was...

To continue reading