HR Professional - December 2007/January 2008 - (Page 19)

L E GA L B Y M A R Y G L E A S O N , S Y LV I E R O D R I G U E A N D A N T H O N Y M O F FAT T PREVENT CLASS ACTION LAWSUITS FOR UNPAID OVERTIME O n June 4, 2007, Dara Fresco launched a $600 million class action lawsuit against her employer, the Canadian Imperial Bank of Commerce (CIBC), for unpaid overtime. Fresco alleged that CIBC breached the Canada Labour Code by not paying her time-anda-half for hours worked in excess of eight hours a day or 40 hours a week. Catherine Connely, professor of human resources and management at McMaster University’s DeGroote School of Business in Hamilton, called the action a “huge wake-up call” for managers in both federal and provincial jurisdictions. Many Canadian companies are now concerned that their own employees will band together to launch similar actions. Although there have been very few actions of this kind in Canada, there are already signs that the CIBC case has opened the floodgates. In August, staff from KPMG LLP in Canada filed a $20 million class action claim for unpaid overtime. and federal legislation differ slightly. The Canada Labour Code states (Ss 169a and 169b) that an employee shall not exceed eight hours a day and 40 hours of work per week, and provides that any employee who is required or permitted to work in excess of these hours is to be paid not less than one and one-half times the regular wage (Ss 174). Section 22(1) of Ontario’s Employment Standards Act, on the other hand, has no daily limit and states that an employee is entitled to one-and-a-half times their “regular rate” of pay for work in excess of 44 hours (although both statutes contain exceptions). Since the legal onus is on the employer to prove that the employee has received all overtime remuneration that is due, the employer should ensure that all overtime work is first approved by a manager; accurate records of overtime work are maintained; and pay stubs clearly indicate the amounts of overtime paid to each employee. 2. 3. CLASS ACTIONS ARE CLAIMS IN WHICH A LARGE NUMBER OF PLAINTIFFS POOL THEIR RESOURCES TO SUE A COMMON DEFENDANT ON COMMON GROUNDS. THE CLAIM IS INSTITUTED BY A SMALL NUMBER OF EMPLOYEES (OR AN INDIVIDUAL) ON BEHALF OF ALL CURRENT AND FORMER EMPLOYEES OF AN EMPLOYER. ALTHOUGH THE AMOUNTS AWARDED TO EACH DEFENDANT ARE OFTEN SMALL, THIS UNIQUE MODEL OF THE CLASS ACTION EXPOSES COMPANIES TO MUCH GREATER LIABILITY, HIGHER COURT COSTS AND ADDED MEDIA SCRUTINY. CLASS ACTIONS FOR UNPAID OVERTIME IN THE UNITED STATES INCLUDE LARGE CORPORATE DEFENDANTS SUCH AS WENDY’S, TACO BELL, PIZZA HUT, STARBUCKS AND THE GAP. Minimizing your exposure Employers should determine whether provincial or federal regulation applies to them, and have an employment lawyer ensure that their policies—both in print and on the ground—abide by the legislation. Provincial Until recently, judges have been loath to recognize disputes as actionable in the courts if there is legislation in place which provides alternate remedies. Defence counsel can argue that the overtime actions are not justifiable because the Canada Labour Code and the Employment Standards Act provide alternative enforcement remedies to the plaintiffs. Running limitation periods mean that on the very day an employer adapts to current standards to avoid liability, they will eliminate a day’s worth of liability that had been incurred. If we are witnessing only the beginning of costly class action overtime suits—as many experts are suggesting—then taking immediate remedial action can greatly reduce potential damages from future class action claims. 4. 1. Mary Gleason (mgleason@ogilvyrenault.com) is a partner at Ogilvy Renault LLP, where she chairs the firm’s Employment and Labour Group in Ottawa; Sylvie Rodrigue is a partner at Ogilvy Renault LLP in Montreal and Toronto; Anthony Moffatt is an associate in the Ogilvy Renault LLP Employment and Labour Group in Ottawa. D e ce mb e r 2 007/J a n u a ry 2 008 19 w w w . H RT houghtLeader. c om http://www.HRThoughtLeader.com

Table of Contents Feed for the Digital Edition of HR Professional - December 2007/January 2008

HR Professional - December 2007/January 2008 Contents Editor's Letter Contributors Leadership Matters Website Did You Know By the Numbers Technology Study News: Ontario Regulatory Enforcement Compensation News: Postponing Retirement Legal Compensation On Message Public Image Ltd. Building Brand Equity Research Strategy HR 101 Interview with Marshall Goldsmith Off the Shelf The Last Word

HR Professional - December 2007/January 2008

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