Legal Eye: Overtime errors could be costly

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Don’t panic, but double check your policies.

That’s the message from one of Canada’s top labour and employment law firms following the Ontario Court of Appeal’s decision to allow two out of three over-time related class-action lawsuits to go ahead.  

Fresco v. Canadian Imperial Bank of Commerce and Fulawka v. Bank of Nova Scotia will proceed, while the class action by employees of Canadian National Railway (CNR) was not certified on technical grounds.

The Court hasn’t yet made its ruling, but by the time the cases finish CIBC and Scotiabank will have been involved in the legal battle for almost a decade.

“Even leaving aside the issue of cost, it’s a considerable amount of time and resources on the part of the employers,” says Filion Wakely Thorup Angeletti associate Paula Petit. “Employers need to be mindful of the progression of this kind of litigation and ensure to the best of their ability that they’re implementing appropriate overtime policies.”

If the companies are found liable each could looking at damages in the hundreds of millions.

These decisions were unlikely to “open the floodgates”, Petit says. The cases probably wouldn’t prompt more class action suits; however, it was a good reminder to employers to get their ducks in a row.

“Employers should consider looking at their overtime policies and considering whether there is any inconsistency with the [Canada Labour] Code,” Petit says. “They should implement system-wide procedures for monitoring overtime and ensuring that their obligations are being met.”
 

Overtime considerations:
 

1. Having an overtime policy that places the emphasis on employees to obtain approval for overtime, may be inconsistent with the Canada Labour Code, and with similar provincial legislation
 

2. Organizations should have system-wide procedures to monitor overtime and ensure that any contractual or statutory obligations are being met. It’s not enough to have policy in place if it’s not being effectively supervised.
 

3. Employers need to recognize and address the power imbalance with employees, and design policies that reflect a “true equilibrium”.
 

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