Canadian HR Reporter

N E W S 10 www.hrreporter.com Overtime obligations breached by bank Ending a lengthy legal battle, the Ontario Superior Court has ruled that CIBC breached overtime obligations prescribed by federal labour law. There are lessons here for all employers, finds Sarah Dobson managers were to prevent hours that they had not approved." The bank had "both a statutory and contractual duty" to prevent or not permit employees from working overtime for which they were not properly compensated, said Belobaba. "The [bank's] overtime policies fell short of the requirements set out in the code and were, therefore, unlawful." And the imposition of a pre-approval requirement as a precondition for overtime compensation is more restrictive than the "required or permitted" language in the code, said the judge. "There is nothing in the code that predicates an employee's eligibility for overtime compensation on formal pre- approval or extenuating circumstances." Looking at the bank's evidence, there was effectively a duty to not permit or to prevent hours the bank did not intend to pay, says David O'Connor, founding partner at Roy O'Connor in Toronto and co-counsel for Fresco. "CIBC was careless and indifferent, indeed negligent, about its obligation to comply with the requirements of the code… The bank dropped the ball, to be sure." But the bank is reviewing the decision and assessing next steps — including an appeal, says Tom Wallis, senior director of CIBC communications and public affairs in Toronto. " We belie ve we have effec tive overtime policies and practices in place, including a clear overtime policy that is easily accessible." 'Required' or 'permitted' In his decision, Belobaba cited the bank's two relevant overtime policies. A 1993 version stated employees must obtain prior authorization from management before incurring any overtime. A 2006 version then said that overtime, "for which prior management approval was not obtained, will not be compensated unless there are extenuating circum- stances and approval is obtained as soon as possible afterwards." The Canada Labour Code states that if an employee is "required or permitted" to work more than standard hours, they must be paid time-and-a-half. And every employer is required to record the hours worked and keep this information on file for at least three years. But does "permitted" favour the employer, meaning it's "impliedly required," or does it favour the employee, as in "allowed" or "not prevented"? For the most part, case law has interpreted "permitted" to mean allowed or failed to prevent, said Belobaba, citing the testimony of John Silverthorn, senior vice president of HR and advisory services at CIBC, who said that "a key aspect of the overtime policy [was] that "The bank's own overtime policy from 2006 onward indicated that managers were to not permit hours that had not been approved," he says. "The code speaks of required or permitted; it doesn't speak of just required, it doesn't speak of directed and it certainly doesn' t speak of only paying for approved hours." The bank had survey results and reports that employees were working extra time and not being paid and did nothing about it, says Steven Barrett, a partner at Goldblatt Partners in Toronto, also co-counsel for Fresco. "An employer can have a policy saying, 'Look, before you work overtime, check in and have it preapproved,' but where an employer is found to know that such a policy is preventing employees from being paid when they work overtime — that the bank is permitting to be worked — the requirement for preapproval can' t subvert the employee's entitlement to be paid." There's a big misconception that if a policy says overtime must be approved, you don't have to pay someone if they work overtime without approval, says Stuart Rudner, founder of Rudner Law in Toronto. OVERTIME HOURS MINIMAL IN CANADA "The bank's overtime policy indicated that managers were to not permit hours that had not been approved." David O'Connor, Roy O'Connor 1.6 average number of overall overtime hours per week in Canada in 2019 3.9 average number of weekly overtime hours for forestry, fishing, mining, quarrying, oil and gas sectors 2.8 average number of weekly overtime hours for utilities sector 1.6 average number of weekly overtime hours for finance, insurance, real estate, rental and leasing sectors EMPLOYERS take note: Overtime is overtime, whether pre- approved or not, whether required or permitted, so be sure to track employee hours and pay accordingly. That was a lesson delivered by the Ontario Superior Court recently in finding CIBC breached overtime obligations prescribed by federal labour law. The decision stretches back to 2007 when CIBC employee Dara Fresca started a class action on behalf of some 31,000 customer service employees who worked for the bank between 1993 and 2009, alleging the bank's overtime policies and record-keeping systems contravened the Canada Labour Code and, as a result, thousands of workers were not properly paid. In his March 30, 2020 decision, Justice Edward Belobaba agreed. Rather than implementing a system to pay for all hours required or permitted, the bank failed to record actual hours worked and made overtime compensation contingent primarily on pre-approval, he said. Source: Statistics Canada

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