On June 25, 2009, I reported on the decision in Fresco v. Canadian Imperial Bank of Commerce, in which a Superior Court judge refused to certify a class action for employees of CIBC claiming overtime pay. The issue has now been revisited in a proposed class action brought by employees of Scotiabank. In his decision in Fulawka v. Bank of Nova Scotia, 2010 ONSC 1148, Mr. Justice George Strathy of the Superior Court of Justice came to the opposite conclusion from that of his counterpart in the CIBC case, holding that systemic issues relating to the bank’s conduct made the class action a preferable procedure to that of individual claims by affected employees. The crux of Justice Strathy’s decision on the point is set out below:

“The obligation of the employer to take active measures to prevent uncompensated overtime being worked has been recognized in labour arbitrations applying the Code: see Referee Emrich in T-Line Services Ltd. v. Morin, [1977] C.L.A.D. No. 422 at para. 33-34:

It is within the control and discretion of management to establish the hours of work and to supervise the work force effectively to avoid the triggering of overtime liability. Thus it is reasonable to cast the onus upon management to take active measures to regulate the hours that employees may work. In the absence of such measures, the employer runs the risk that through oversight or omission, workers are permitted to work overtime and thereby liability to pay overtime is triggered …

Viewed from this perspective, it is arguable that Scotiabank’s policy put too much emphasis on the employer’s interests and insufficient emphasis on the interests of Class Members. It is also arguable that it failed to protect Class Members against the risk that they would be required to work uncompensated overtime because of the demands of the jobs or their superiors. There is a basis in fact in this case for common issues based on the duty of Scotiabank to establish and implement a fair process to fulfill the duties it owed to the Class in relation to their overtime work.

The resolution of the issue of whether Scotiabank had a duty to put a fair and reasonable overtime system in place, and whether its system (including the pre-approval requirement) fulfilled this duty, is one that will advance the claim of every Class Member. If a common issues judge were to find that there was such a duty and that Scotiabank’s system was unfair and unreasonable, the absence of pre-approval would not be a defence to an individual overtime claim. While Scotiabank now acknowledges, and its new policy appears to reflect, that it has an obligation to pay overtime that has been “permitted,” its pre-2008 policies and practices did not reflect this acknowledgement.

There is also a factual basis for a common issue concerning Scotiabank’s record-keeping system. Scotiabank’s position is that the Plaintiff has failed to advance any evidence of a systemic flaw in its recordkeeping practices, and because the implementation of those practices was at the branch level, any inquiry into how records were kept must be conducted branch-by-branch and cannot be resolved on a Class-wide basis. I do not accept this. It amounts to Scotiabank saying that its record keeping system was so decentralized, varied and idiosyncratic that every claim for overtime must be examined on a case-by-case basis. Scotiabank cannot point to its own record keeping failures to defeat certification. This would not be an acceptable way for a bank to manage its customers’ money and it is not an acceptable way to manage the compensation to which its employees are entitled. There is evidence that, for most of the Class Period, Scotiabank did not have an adequate system in place for the recording of regular time and overtime worked by Class Members. The staff plan was nothing more than a record, prepared in advance, of the hours that employees were scheduled to work. It was not a record of hours actually worked. While employees were supposed to check and correct their hours after the fact, Scotiabank’s policy prevented them from recording and claiming for hours that had not been pre-approved. The “Catch 22” gave them no reason to record the hours they actually worked because they would not be paid unless the overtime had been pre-approved. The bank had no consistent corporate policy or system applicable to all branches, for the tracking of overtime. It had no system of tracking time in lieu” or of ensuring it was “cashed out”. It is appropriate to ask whether this was a breach of a duty owed to the Class.

The evidence before me, therefore, provides a basis in fact to ask whether Scotiabank owed duties to the Class to put policies and procedures in place to prevent overtime from being worked without compensation and to properly record all hours of overtime worked, whether pre-approved or not. There is also a basis to ask whether those duties were breached. The answers to these common issues do not depend on individual findings that have to be made with respect to each individual claimant. The answers will significantly advance the action because if they are answered in the affirmative the absence of pre-approval in any particular case may be irrelevant and the inability of an employee to prove the quantum of overtime hours worked may not be fatal to the claim. A conclusion by the common issues judge that the bank had a duty to pay overtime that was permitted or required, and that it breached a duty to establish a system to properly record such overtime, could result in a conclusion that the failure to prove overtime hours worked is not a bar to recovery, or that the absence of records is not an impediment to proof of damages.”

For some three weeks, public sector employees of the City of Toronto have been engaged in a lawful strike. The absence of garbage removal has understandably received the most attention. City workers have picketed at the entrance of transfer stations, at times interfering with access to those dump sites. This raises the question as to the rights of the parties in these circumstances.

There is no doubt that picketing is an important right, consistent with the fundamental freedoms of peaceful assembly and association set out in section 2 of the Charter of Rights and Freedoms. Where private parties are involved, section 102 of the Courts of Justice Act requires that reasonable efforts to obtain police assistance to prevent damage to property, personal injury or interference with lawful entry or exit from premises have been unsuccessful before an injunction to prevent the picketing can be obtained. These provisions represent a careful balancing of the rights of the parties in these highly charged and emotional situations: a recognition of the importance of picketing and an acknowledgment that, where the activity transcends lawful bounds, police action and if necessary Court intervention can be called upon. In a leading decision in this area, the Court of Appeal for Ontario made the following important statements:

“Strikes and the picket lines that go with them are evolving human dramas where risks of property damage, personal injury or obstruction of lawful entry are best controlled by flexible and even handed policing. Only where this fails should the court, with its blunt instrument of the injunction, be resorted to.”

“The number of picketers is an important expression of solidarity in the taking of collective job action. Pending police assistance, there may well be some inconveniencing or impeding of those seeking to pass trough the picket line. The police response to requests for assistance will not always be immediate given their other policing responsibilities. The first failure of the police to respond instantaneously to a request for help does not necessitate the conclusion that police assistance has failed and that therefore the court can be resorted to. Absent questions of property damage or personal injury, a robust society can accommodate some inconvenience as a corollary of the right to picket in a labour dispute before the court will conclude that police assistance has failed, and that it has jurisdiction to intervene with injunctive relief.”

It is not uncommon for Union members to feel aggrieved with the conduct of their Union. This can be especially true when a grievance stemming from a termination of employment is settled or withdrawn by the Union over the objection of the employee. Collective agreements almost invariably provide that the Union has the exclusive right to deal with the employer in employment related matters. In some cases, the Union might consider that a grievance has insufficient merit or is contrary to the interests of the membership, and the grievance would therefore be withdrawn or settled. The question becomes: what recourse does a Union member have in such cases?

Section 74 of the Ontario Labour Relations Act provides that a Union “shall not act in a manner that is arbitrary, discriminatory or in bad faith in the representation of any of the employees in the unit.” The wording of the section is significant. Unlike professionals such as doctors, lawyers, accountants, engineers and others, who are held to a standard of care not to act in a manner that is professionally negligent, Unions are protected from liability so long as they act in good faith. Decisions of the Labour Relations Board have commented on this duty in the context of termination grievances. In a case that I was involved in, Lenahan v. Canadian Auto Workers Local 222, [2004] O.L.R.B. Rep. 591, the Vice-Chair of the Board stated:

“The Board’s test for determining whether a trade union has violated its duty of fair representation is well established. The trade union can make mistakes. It is not the role of the Board to second guess the trade union. However, as was stated in Sharon Parker, [2003] O.L.R.B. Rep. July/August 653, the trade union must provide a persuasive account for its decision not to process the grievance further. In doing so, the trade union must prove that it put sufficient consideration into its decision in accordance with the seriousness and complexity of the matter. A termination grievance is among the most serious of grievances. In providing the Board with a persuasive account of why a grievance relating to termination is not pursued, the trade union must demonstrate that it has carefully considered the matter.”

Claims against Unions can be difficult to win. However, as set out in decisions of the Labour Relations Board, the Union must carefully review a termination grievance before deciding that it is not worthy to proceed through a hearing before an Arbitrator. Given the importance of such matters to the affected employee, that is how it should be.

Stress at work is a serious problem. Google bad bosses and see what comes up. It is not well known however that undue stress caused by inappropriate conduct of the employer can lead to a constructive termination of employment. In other words, the employee may be forced to leave work for the sake of their health but can still bring action against the employer for wrongful termination.

What are the types of abusive conduct which can lead to a constructive dismissal? It has been well stated by a judge in Alberta that it is a “fundamental term of any employment relationship that the employer will treat the employee with civility, decency, respect and dignity.” Clearly, these are matters of degree and each case must be looked at its own facts. It can fairly be said however that conduct such as harassment, repeated yelling and the excessive use of foul language can pass the test.

Employers have a duty not to create a hostile work environment. For many employees faced with this conduct, the stress reaches the point that continued employment becomes intolerable. In such cases, the Courts are there to grant the appropriate relief.

On June 27, 2008, the Supreme Court of Canada released its long awaited decision in Keays v. Honda Canada Inc. Mr. Keays had been a long-term employee at Honda who was off sick as a result of chronic fatigue syndrome. Honda was not satisfied with the quality of his doctor’s notes and requested that Mr. Keays be seen by their own physician. When he refused, Mr. Keays was terminated by Honda. The resulting legal claim concluded with a trial in which Honda was ordered to pay the equivalent of 24 months salary and punitive damages of $500,000.00. By the time the case reached our highest Court, the punitive damages had been reduced to $100,000.00.

Mr. Keays did not have a good day at the Supreme Court. Concluding that the trial judge had made serious errors in his assessment of Honda’s conduct, the Court reduced Mr. Keays’s damages to the equivalent of 15 months salary and the punitive damage award was set aside.

Much of the commentary hailed the decision as a major victory for employers in Canada. I would beg to differ. The Court has long recognized that employers owe a duty of good faith to employees to be candid, truthful and sensitive to employees at the time of termination. The failure to do so was to be compensated by an increase in the notice period to which the employee would otherwise be entitled. It is true that the Court in Keays eliminated that arbitrary increase. In its place however, employees who suffer mental distress as a result of improper conduct by an employer at the time of termination can now receive an award for such damages. This represents a real breakthrough in the law and overturns at least 100 years of legal authority against such awards. It is now the responsibility of trial and appellate Courts in Canada to flesh out the parameters of the decision. In my view, employers would do well to treat employees with utmost fairness. Anything less raises the possibility that employees will suffer foreseeable damages for mental distress.