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$250M overtime suit against Scotia can proceed

Posted by on Aug 4, 2011 in HR Issues, Moneyville | 0 comments

By Sheryl Smolkin

Read this article and comments at Moneyville.ca 

The Ontario Divisional Court has confirmed a lower court decision that a $250 million class action for overtime brought against the Bank of Nova Scotia (Scotiabank) by 5,000 retail branch employees between 2000 and 2010 can be certified, but further appeals to the Court of Appeal and even the Supreme Court of Canada are likely.

When a class action is certified, a single lawsuit can be brought on behalf of a group of people who are seeking relief in cases that raise common issues. It is much more cost effective for individuals and the courts if multiple, similar claims can be disposed of in a single trial.

Once the courts permit a class action to proceed, the vast majority are settled before trial and the damages agreed upon are divided up among the members of the class, after legal fees. Therefore, the key battleground is the early application for certification.

In this case, Cindy Fulawka was the named plaintiff representing the class. She alleged that Scotiabank made it difficult for personal banking officers, financial advisors and small business account managers to claim and get paid for overtime, so they regularly worked overtime without compensation.

Mr. Justice Strathy initially concluded that there was evidence of “systemic wrongs giving rise to common wrongs due to a policy that fails to reflect the realities of the workplace.” Because the onus was on the employees to obtain prior approval for overtime, rather than requiring the employer to ensure that employees were paid for overtime that they worked, he certified the class action.

The appeal from Justice Strathy’s decision to certify was heard by the Ontario Divisional Court in December 2010. Less than two months earlier, another panel of the same court upheld a lower court’s decision to deny certification of a very similar class action claiming unpaid overtime on behalf of 31,000 CIBC retail banking employees.

As a result, during the course of the hearing of the present appeal, lawyers for both parties spent considerable time addressing the similarities (which Scotiabank emphasized) and the differences (which Fulawka emphasized) between the facts and evidence of the present appeal and those in the case against CIBC.

Nevertheless, the Divisional Court ruled that the case against Scotiabank should be evaluated on the merits of its own facts, and not those in the case against CIBC where certification of the class action was refused. The decision of Mr. Justice Strathy was confirmed by the Divisional Court based on these facts and Fulawka’s case against Scotiabank was certified.

With the principles and amount of money at stake, it is not surprising that it has been left to the Ontario Court of Appeal to rationalize the seemingly conflicting decisions in the Scotiabank and the CIBC cases. But even if Fulawka is successful on subsequent appeals by Scotiabank, it is likely to be several more years before the question of whether the employees actually did work overtime for which they were not paid is heard by a court.

I don’t know about you, but I’m rooting for the employees.

Even if the Scotibank and CIBC cases are not ultimately certified, any employee could theoretically bring a case for overtime pay at anytime. But the reality is that few individuals have the money or the intestinal fortitude to slay dragons on their own, particularly if being a whistle blower could put desirable employment with current or future employers at risk.


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