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CIBC investment advisors unpaid overtime class action not appropriate for certification


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Another group of CIBC employees wanted to certify a proposed class action involving unpaid overtime, where the employees alleged that CIBC classified them wrongly as ineligible for overtime pay. The Ontario Superior Court of Justice decided that this action was not suitable for certification as a class action because there was no commonality between class members (it could not be decided on a common basis).

Before we go any further, it is important to note that CIBC is a Canadian chartered bank. It is federally regulated and thus governed by the Canada Labour Code. CIBC World Markets (CIBCWM) is the wholesale banking arm of CIBC and provides, among other things, investment advice and services to individual clients through investment advisors in its retail division, CIBC Wood Gundy. However, CIBCWM is provincially regulated and, in Ontario, subject to the Employment Standards Act. Thus, the law central to this case is the overtime exemption found in Regulation 258/01 under the Employment Standards Act.

Moving on…

A group of analysts, investment advisors and associate investment advisors employed at CIBC and CIBC World Markets moved to certify a class action for unpaid overtime. The action followed another high profile CIBC overtime class action case Fresco, discussed here (login required). Whereas Fresco was an “off-the-clock case” (the employees alleged that while they were eligible for overtime, their overtime hours worked had not been recognized and paid by their employer), this case involved employees alleging that they were wrongly classified by CIBC as ineligible for overtime.

Employees of Canadian Imperial Bank of Commerce and CIBC World Markets are assigned specific job classifications. The CIBC overtime policy in question states:

Under Canadian law, some employees based on job function/role are designated as exempt from eligibility for overtime. At CIBC, as a general rule, all roles evaluated at a Level 6 and above, all people-management roles and specific roles deemed to be management functions are designated as exempt. This exemption is based on an analysis of a number of factors and criteria such as level of responsibility, impact, overall compensation, autonomy, authority, complexity and span of control related to the job.

Hence, following the Manager’s Guidelines, associate investment advisors were Level 6 employees and were ineligible for overtime. Investment advisors were Level 8 employees and also ineligible under the policy.

The class of persons this class proceeding sought to represent is comprised of all current and former investment advisors “Level 6 or higher” who held that position in Ontario since 2002.

The main issue was whether or not a person had managerial responsibilities to make the person ineligible for overtime pay pursuant to Regulation 258/01 under the Employment Standards Act.

In this case, the Court decided this action was not suitable for certification as a class action because there was no commonality between the members of the class. What’s more, there was no workable methodology to resolve that issue.

The judge found that CIBC’s classifications were largely generic, and that the actual duties performed by each employee vary so much that each case would have to be assessed individually, thus defeating the rationale for a class action.

Class members have little in common but their names. The key issue of fact—namely, whether or not a person has managerial responsibilities—which is critical to the determination of overtime eligibility, cannot be determined on a common basis. There is no workable methodology to resolve that issue. The action simply will not work as a class action.

When the Court found that this question could not be answered in a class action, it meant that this careful analysis could not be done within a group claim.

The test for certification under the Class Proceedings Act requires the following:

  • A cause of action: this was met
  • Identifiable class: this was problematic and lacked commonality. A class action requires that each member of the proposed class offer the court common issues
  • Common issues: none of the questions, including that of eligibility for overtime pay, could be answered on a common basis, and the employees failed to offer any explanation or offer any workable methodology on how this could work. The additional legal questions posed were there because the class action was incapable of determining which class members were eligible for overtime and which were not. The judge stated, “A class action is not meant to be a commission of inquiry into how the defendant conducts its business. It is meant to resolve legal claims.”
  • Preferable procedure: a class proceeding was not a “fair, efficient and manageable method of advancing the claim” as a whole
  • Representative plaintiffs: there was no such representative plaintiff who fairly and adequately represented the interests of the class, who produced a workable litigation plan and who did not have a conflict of interest with other class members. The Court noted that it was disappointing that the representative plaintiff was not present at the hearing. Though there was diligent counsel present, there was still no excuse for the shortcomings in the litigation plan.

Laura Fric of Osler, Hoskin & Harcourt LLP states: “In essence, Justice Strathy found that for a misclassification overtime claim to have any hope of being certified, it must at a minimum have a class with ‘identical or similar’ job duties.”

Christina Catenacci with the collaboration of Yosie Saint-Cyr
First Reference Human Resources and Compliance Editors

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Christina Catenacci

Christina Catenacci, BA, LLB, LLM, was called to the Ontario Bar in 2002 and has since been a member of the Ontario Bar Association. Christina worked as an editor with First Reference between February 2005 and August 2015, working on publications including The Human Resources Advisor (Ontario, Western and Atlantic editions), HRinfodesk discussing topics in Labour and Employment Law. Christina has decided to pursue a PhD at the University of Western Ontario beginning in the fall of 2015. Read more
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