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In a much anticipate decision, the Ontario Superior Court of Justice today declined to certify a class under the Class Proceedings Act, 1992 due to lack of commonality of an issue that would significantly advance the case.  A link to the case will follow shortly.

The primary claim advanced was to seek alleged unpaid overtime.  The claim was brought by Dana Fresco on her own behalf and on behalf of current and former front-line service workers in retain branches of the CIBC.  The claim alleged that the CIBC Overtime Policy was illegal in two respects:

1. Except for in extenuating circumstances, employees had to obtain pre-approval for overtime in order to be compensated.  This was alleged to have violated the Canada Labour Code; and
2. The Policy provided for the employee, at his or her option, to receive time off in lieu of overtime pay at a rate of 1.5 times.  This was also alleged to fall offside the CLC.

As Madam Justice Lax observed, this was not a "mis-classification" case where the employer excluded certain classes of employees from overtime.  In U.S. parlance, exempting an employee from overtime when, in fact and in law, the employee was non-exempt and, therefore, eligible.  Rather, this was a so-called "off-the-clock" case where the allegation was that the bank simply failed to pay otherwise eligible overtime in contravention of contract and the CLC. 

Lax, J. stated directly "it is my opinion that the Policy is not illegal and that, at any rate, the determination of its legality will not materially advance any class members claim for unpaid overtime wages.". 

Madam Justice Lax went on to re-frame the issue by noting that 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."

There was an assertion by Ms. Fresco of a "systemic policy, practice or experience" of unpaid overtime at the bank.  The Court did away with that by noting that "there is no evidentiary foundation for this but, even if there were, this is not a case where questions of systemic wrongdoing  can be resolved without examining the individual claims, thereby defeating the purpose of the class action."

There was a detailed discussion of the Policy and an excellent review of some of the overtime principles generally. 

Certification under the Class Proceedings Act requires that a number of requirements described at section 5(1) of the Act be present:

 In Sauer v. Canada (A.G.) leave to appeal denied those requirements were described as:

There must be an element of commonality and "it is not enough for there to be a common defendant" nor is it enough to allege a "common harm".  According to Lax, J. "there must be commonality in the actual wrong that is alleged against the defendant and some evidence to support this."

In terms of the broad discussion of overtime, Justice Lax reviews the implications of allowing an employee to work overtime when discussing the "pre-approval" requirement of CIBC's policy.  The Court noted that overtime is payable where a manager required or permitted overtime to be worked, whether or not it was pre-approved.  This was not disputed by CIBC.  The Court also noted that:

What about time off in lieu of overtime?  The CLC, unlike some other provincial legislation, does not expressly permit time off in lieu of overtime pay.  The Court, in this case, found that time off in lieu as determined by the employee provided a "greater right or benefit" than did the CLC and would prevail over the strict requirements and application of the CLC.  Employees have the choice - they can receive time-off-in lieu of overtime pay or they can be paid for overtime.  This was persuasive to the Court of the fact that this was a more favourable benefit than provided under the CLC.

The Court then considered the requirements for certification under the Act and found that all were met except for the one dealing with "commonality".  The Court noted that the "central flaw in the plaintiff's case is that instances of unpaid overtime occur on an individual basis.  This lack of commonality cannot be overcome by certifying an issue that asks whether the defendant had a duty to prevent a series of individual wrongs, without any basis for the existence of a duty and where the duty does not relate to a pleaded cause of action." 

In other words, the claims and evidence filed showed

To state the obvious, this is an exceedingly important employment law class action case.  It remains to be seen whether Ms. Fresco will try to take the matter further, which may not be a complete surprise.  That being said, Madam Justice Lax has provided a thorough and detailed analysis of the developing body  of case law in support of her conclusion on commonality and otherwise.

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