Bank Employees Win Class Action Suit About Overtime Pay
Legal Affairs - Workplace Today®
A group of
bank employees across Canada have won their 12-year battle to get overtime pay. The Ontario Superior Court of Justice ruled in favour of a class-action lawsuit launched on behalf of 31,000 customer service employees.
The suit alleged the bank did not always pay them overtime for working beyond the standard workweek in the Canada Labour Code, which is a maximum of 8 hours a day and 40 hours a week. The Code requires that employees working beyond that must be paid time and a half.
The suit argued that over 16 years, the bank’s overtime policies restricted payments for overtime. Its earlier policy required employees to get permission to be paid for overtime before actually working it. Later, a new policy came into force that would allow employees to be paid for overtime if they got approval after the fact under “extenuating circumstances.”
The employees’ standard hours of work were 7.5 hours per day and 37.5 hours per week, which complied with the Code. The bank’s own policy stated that if employees worked more than 8 hours a day or 37.5 hours a week, they would be paid overtime.
The plaintiff also claimed that the bank had a duty to accurately record the hours worked by employees. The Canada Labour Code requires employers to record the hours worked by employees each day and keep it on file for at least three years.
The suit alleged that some employees were not paid for all their hours worked. It stated that it was difficult to get preapproval for overtime, workers were discouraged from filling in time sheets to record overtime, and in performance reviews, employees were discouraged from working overtime and seeking pay.
At trial, the court referred to a precedent that stated that in order for the suit to be successful, it would have to prove that the bank’s overtime policy and compensation practices were “institutional impediments” to overtime claims.
The court ruled that both policies contravened the Code. The court stated that overtime policies may prefer employees to get preapproval to work overtime but that it should not be a condition to be paid if they actually worked the time.
The bank’s policies were more restrictive than what the Code prescribes. “There is nothing in the Code that predicates an employee’s eligibility for overtime compensation on formal pre-approval or extenuating circumstances,” the court wrote. “Section 174 of the Code clearly provides that overtime hours must be compensated whenever they were required or permitted.”
Overtime policies must make clear “that overtime must and will be paid whenever overtime hours were required or permitted, full stop,” the court said.
The court also ruled that the bank had a duty, both in statute and under contract law, to record and maintain accurate records of time worked, so that it could accurately pay employees. The court found that the bank did not have a system to do this, which also contravened the Code.
Under the bank’s previous overtime policy, it expected employees to write down their actual hours only when they wanted to be paid overtime. Later, the bank implemented a human resources software package that could track compensable hours. “Notwithstanding this capability, the bank failed to systematically record the actual hours worked by class members or lieu time they may have taken,” the court found.
The court noted an internal bank document that stated, “Currently, we are not able to determine if an employee worked overtime because we do not track hours worked on a daily basis…If there is not a report that can accurately determine the number of hours worked per day and per week, it would be impossible to know from a reporting perspective, if the correct overtime amount was paid.”
The court said, “While actual hours may have been recorded for some employees at some branches on some occasions, there was no system to ensure this was done consistently across all branches.”
“I can find on the evidence that [the bank] was careless and indifferent, indeed negligent, about its obligation to comply with the requirements of the Code. I can also find that the bank should have known better. It is a multi-billion-dollar financial institution with an able legal staff that can easily advise on the requirements of federal labour law. For some reason this didn’t happen. The bank dropped the ball, to be sure,” the court wrote.
The issue of damages was left to a future hearing.