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By Henry Dinsdale and Jeff Goodman Plaintiffs may not prevail in overtime cases There is an upside for employers in recent overtime class action decisions. T he Ontario Court of Appeal has finally spoken on the question of whether lawsuits in three prominent overtime cases should be certified as class actions. Many in the press have heralded the decisions in Fresco v. Canadian Imperial Bank of Commerce and Fulawka v. Bank of Nova Scotia as an indication that overtime class actions will become regular fixtures in Canadian litigation. However, this enthusiasm ignores the fact that both CIBC and BNS have sought leave to appeal to the Supreme Court of Canada, and even if these appeals do not succeed there are important parts of the Court of Appeal���s decision which have the potential of making these Pyrrhic victories for the plaintiffs in each of these cases. This arises from the Court of Appeal���s refusal in each of these cases to allow the use of aggregate damages. Further, the decision in McCracken v. Canadian National Railway Company makes it far less likely employers will face misclassification class actions involving large groups of employees. In order to better understand the significance of these decisions we need to understand the nature of the claims in these actions. CNR was a ���misclassification��� case alleging that front line supervisors had been misclassified as ���managers��� in order to deprive the group of overtime and holiday wages payable under the Canada Labour Code. The representative plaintiff alleged that the supervisors performed non-managerial duties and should have been overtime eligible. The plaintiff argued that this was an issue common to all of the supervisors at issue and that this justified certifying the matter as a class action. The lower court agreed. The Court of Appeal reversed the lower court���s decision. The Court of Appeal held that certification of a misclassification class action was appropriate only when the similarity of the job duties performed by class members provided the fundamental element of commonality ��� in other words, only when all the proposed class members were in the same job. The Court of Appeal found the evidence established the general title of front line supervisor was virtually meaningless and applied to persons performing many different roles in many different areas of CNR���s operation. The Court of Appeal refused certification because the plaintiff failed to establish commonality in the job duties performed by class members. This decision will almost certainly have a chilling effect on future misclassification class actions. In addition, it makes it exceedingly difficult in Ontario to certify misclassification class actions involving large and disparate groups of employees operating under loose titles such as supervisor or adviser. Future attempts to certify these types of class actions will be restricted to much smaller groups of employees who are all in identifiable job classifications with the same duties and responsibilities. BNS and CIBC are both ���off the clock��� overtime cases, in which class ca na dia nl awy e rm a g . c o m / i n h o u s E members were overtime eligible, but alleged they worked overtime hours for which they had not been paid. Both defendants argued that the question of whether the proposed class members did or did not work overtime hours was an individual rather than a class issue. This was the basis of the lower court���s decision in CIBC, denying certification. The Court of Appeal in CIBC and BNS held that the common issue in both actions was whether the banks��� overtime policies and practices prevented employees from receiving overtime pay. However, the part of the decision largely ignored by the press is the Court of Appeal���s refusal to allow damages to be determined on an aggregate basis. In BNS, the lower court had allowed damages to be assessed using a statistical sampling of the class members to determine the damages owed to the larger class. The Court of Appeal ruled that doing so would be inappropriate, and ordered that each employee���s entitlement to overtime pay must be assessed individually. This is significant because many of the class members are current employees. This means that each employee will need to become actively involved in litigation to prove their claim for overtime pay, including potentially testifying at trial. Current employees may be very hesitant to become actively involved in litigation against their employer, particularly if their potential overtime entitlement is small. Further, the prospect of holding thousands of mini-trials is unlikely to be attractive to the plaintiffs given the failed history of this procedure in earlier employment class actions. IH Henry Dinsdale and Jeff Goodman are labour and employment law partners with Heenan Blaikie LLP in Toronto. December 2012/January 2013 ��� 11

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