As in the United States, some Canadian employers have attempted to eliminate or reduce post-retirement benefits in order to address escalating costs. In two recent cases, Canadian employers were found to be not entitled to reduce post-retirement health and life insurance benefits. Courts in both Ontario and British Columbia have recently ruled that, under the respective plans before them, the employer’s “reservation of rights” (ROR) to make such changes was not sufficiently clear and unambiguous. read more…
Class actions in Canada for unpaid overtime or other employment claims have met with mixed results in the past. Now the rules of the class action game – at least in the employment context – may be a little clearer.
On June 26 the Ontario Court of Appeal issued its decisions in three closely watched cases: Fulawka v. The Bank of Nova Scotia , Fresco v. Canadian Imperial Bank of Commerce, and McCracken v. Canadian National Railway Company.
What the Three Cases Are About
All three of these class actions were against large, federally regulated employers. Canadian National Railway (CNR) is one of North America’s largest. The two banks are among Canada’s five largest banks. read more…
When the Ninth Circuit Court of Appeals (San Francisco) affirmed an order certifying the largest employment discrimination class action ever in the United States, Wal-Mart was left facing a class of up to 1.5 million members. Employers were left wondering just how big and powerful these opponents might get.
On December 6, 2010, the U.S. Supreme Court agreed to a review. U.S. employers are hoping the Supreme Court’s decision will put more restrictions on employment class actions. Canadian employers will want to stay tuned. Class actions south of the border can inspire similar litigation in Canada.
The much-awaited appeal decision in Fresco v. CIBC was released in September. The appeal court declined to interfere with the original decision of Justice Lax. She had denied Dara Fresco’s bid to bring a class action against CIBC for unpaid overtime.
This is one of three high-profile cases we have been following, in which employees are seeking to bring class actions for millions of dollars in unpaid overtime. In any class action the one bringing the suit must show that there are common issues, the resolution of which will advance the litigation for everyone. It has become clear that the “common issues challenge” is very much alive when it comes to overtime claims.
Michael McCracken’s claim against Canadian National Railway (CN) recently got the go-ahead to proceed as a class action. The third in a trilogy of high profile overtime cases in Canada, McCracken v. Canadian National Railway Company brings the score to 2 to 1 for certification of the class action — at least in the first round. Appeals are in progress. So stay tuned.
All three cases involve federally regulated employers. The basic issue is entitlement to overtime pay under the Canada Labour Code (the Code). Fresco v. Canadian Imperial Bank of Commerce and Fulawka v. The Bank of Nova Scotia are “off the clock” cases — claims by non-managerial employees for unpaid overtime work. These were discussed in an earlier article in this newsletter.
As was noted in an earlier article here, the Ontario Superior Court of Justice recently certified a class action against the Bank of Nova Scotia (BNS). That lawsuit claims $300 million in unpaid overtime involving approximately 5,300 BNS sales staff: Fulawka v. Bank of Nova Scotia (Fulawka). Certification means the claims meet the requirements to use the class-action process. What does this decision mean for other similar claims?
A similar previous case, brought against another large bank, CIBC, had not met the certification requirements. It was ruled that that claim lacked the essential element of “commonality” in the situations of the employees in the proposed class: Fresco v. CIBC (CIBC). The breaches alleged in CIBC lacked the “systemic” nature required to justify certification.
One of the hottest issues in Canadian employment law in the past two years has been overtime class-action claims. As we outlined in our October 7, 2008, entry, 2007 saw three overtime class-action lawsuits
- a $651 million class-action lawsuit filed against the Canadian Imperial Bank of Commerce (CIBC), followed quickly by a $20 million class action against KPMG,
- and then a $350 million class action against a second major Canadian Bank, Scotiabank. Further class actions were filed in 2008 â€“ against CN Railway in March 2008 for $250 million,
- and another against CIBC (this time by the investment bankers and analysts) in October 2008 for $360 million.
The British Columbia Court of Appeal just issued an important decision about an employee’s right to make a statute-based overtime claim in a civil action. The decision, Macaraeg v. E Care Contact Centers Ltd., should make BC employers very happy. And it may provide a new defense to overtime pay class actions in other Canadian jurisdictions as well.
Avoiding a dangerous trap
The BC Employment Standards Act applies to most employees in British Columbia with some limited exceptions. It requires employers to pay overtime pay to employees if they are required or “directly or indirectly” allowed to work more than eight hours a day or 40 hours a week.
Although large employment-related class-action lawsuits have become commonplace in the United States, until recently they were virtually unknown in Canada.
The relative peace enjoyed by Canadian employers on this front was shattered with a $651 million class-action lawsuit filed in June 2007 against the Canadian Imperial Bank of Commerce (CIBC), followed quickly by a $20 million class-action against international finance and accounting giant KPMG LLP. And in early December, a $350 million-dollar suit was filed against a second major Canadian bank, Scotiabank.
These lawsuits seek damages for unpaid overtime in relation to thousands of current and former employees. If successful, theyâ€˜re expected to serve as a springboard for similar class-action lawsuits targeting large employers in Canada. read more…