Case Alert: Court Sets High Bar for Employers Who Require Authorization to Work Overtime

A recent decision by the Ontario Superior Court in CIBC v. Fresco, 2020 ONSC 75 has sent employers a warning on overtime rules.  In this case, the Court held that requiring employees to obtain authorization for overtime pay cannot be used to deny paying overtime unless the employer takes active steps to enforce it.

This case arose from a class action brought by customer service employees from CIBC bank branches across Canada. They argued that CIBC overtime policies and record-keeping systems violated the Canadian Labour Code (the “Code”) and denied them statutory overtime.

In considering this claim, the Court analyzed the Code obligation on employers to pay overtime premiums where the employer “requires or permits” an employee to work overtime. Similar language is used in the Ontario Employment Standards Act, 2000 and its regulations. The Court found that the general consensus in employment and labour law was that the word “permits” must be interpreted broadly to cover employees who are not stopped from working overtime. The employer cannot simply look the other way when unauthorized overtime occurs, but must take active steps to intervene and prevent employees from working overtime. Under the Code, every deferral employer is required to record the hours worked each day by every employee and keep this information on file for at least three years (there are similar record keeping requirements in the Ontario Employment Standards Act, 2000). CIBC’s system did not do so, and it was not sufficient defense for CIBC to point to its policy requiring pre-approval of overtime hours while knowingly allowing employees to work unapproved overtime.

The take away of this case is that employers have a positive obligation to intervene and prevent overtime work if they want to avoid paying overtime premiums. If the employer knows or ought to have known about employees working overtime (even if the employee did not request authorization) and does not take reasonable steps to prevent employees from working, that overtime work must be appropriately compensated. This case illustrates the importance of staying up to date on records of hours actually worked and staff schedules, of providing adequate manager training to ensure that employees are not working excess hours, and of having clear, detailed protocols on when and if overtime hours should be worked.

PooranLaw will continue to monitor legal developments related to employment standards legislation. In the meantime, if you require legal assistance, we encourage you to reach out to your regular PooranLaw lawyer, or any member of our team.

Note: This article provides general information only and does not constitute, and should not be relied upon as, legal advice or opinion. PooranLaw Professional Corporation holds the copyright to this article and the article and its contents may not be copied or reproduced in any form, in whole or in part, without the express permission of PooranLaw Professional Corporation.