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Employees on salary are entitled to overtime compensation

The Ontario Court of Appeal ordered in Fresco v. Canadian Imperial Bank of Commerce and Fulawka v. Bank of Nova Scotia that the class actions by staff at CIBC and Scotiabank for unpaid overtime can proceed. Due to the certification, the very threat of a lawsuit prompted other large companies to take notice of their overtime policies and practices.

The class members allege the banks' overtime policies required staff to obtain prior approval to be paid for overtime work despite the fact that the overtime work was required or permitted to be performed. They assert they were not paid overtime because they did not receive prior approval.

After years of litigation, Fulawka and Scotiabank settled the lawsuit, resulting in one of the country's largest class action bank pay out: $39.3 million to about 15,000 employees.

Class actions can be important in the employment context because employees seeking compensation for overtime don't need to be singled out. Being part of a class means employees can still be compensated for unpaid overtime without having to take an active and individual role against their employer.

These two cases serve as an intervention to a culture where we are all too familiar with - feeling compelled to work longer without additional compensation to get ahead, to not be perceived as problematic or lazy, or putting in extra hours to meet company targets. The two class actions demonstrate to employees on salary that they have the right to be paid for overtime work.

The Canada Labour Code is the governing authority that regulates federal business and industries. According to the Code, an employee working for a federally regulated business or industry is entitled to one and one-half times their regular rate of wages if the employee exceeds eight hours in a day and forty hours in a week, unless the averaging of hours of work is agreed to in writing.

The Employment Standards Act, 2000, governs every other business in the province. According to the Act, an employee is entitled to one and one-half times their regular rate for each hour of work in excess of 44 hours in each week, unless it is agreed upon that the hours is to be averaged or unless the employer and employee agreed on another benchmark to constitute as overtime, as long as it is not in excess of 44 hours.

What does this mean for employers?

If you are an employer, it is important that you review your overtime policies and procedures to ensure that you are not at risk of a lawsuit for unpaid overtime.

What does this mean for employees?

If you worked overtime but have not been paid for your hours, it is your right to be adequately compensated.

To reach the author of this blog, Jean-Francois Lalonde, email jflalonde@viceandhunter.ca or call 613.232.5773 x 246.

Jean-Francois Lalonde is an Ottawa, Ontario employment lawyer and wrongful dismissal lawyer practicing with Vice & Hunter LLP. He has extensive experience practicing in the areas of employment law and is a part-time professor at La Cité Collégiale teaching Employment Law for Paralegals.

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