Fresco v. Canadian Imperial Bank of Commerce

103 O.R. (3d) 659

2010 ONSC 4724

Ontario Superior Court of Justice,

Divisional Court,

Ferrier, Swinton and Sachs JJ.

September 10, 2010

Headnotes

Civil procedure -- Class proceedings -- Certification -- Commonality -- Plaintiff bringing proposed class action on behalf of 31,000 bank tellers and customer service representatives claiming compensation for unpaid overtime work -- Motion judge finding that plaintiff had failed to show that there was any evidence of systemic practice of unpaid overtime and that any other issues that might be considered common would not significantly advance litigation -- Motion judge not erring in dismissing certification motion on basis that action lacked commonality.

Civil procedure -- Class proceedings -- Certification -- Costs -- Plaintiff bringing proposed class action on behalf of 31,000 bank tellers and customer service representatives claiming compensation for unpaid overtime work -- Plaintiff moving unsuccessfully for certification of action as class proceeding -- Motion judge awarding defendant costs of $525,000 on partial indemnity basis -- Plaintiff's appeal from costs order dismissed.

Civil procedure -- Class proceedings -- Certification -- Evidence -- Plaintiff bringing proposed class action on behalf of 31,000 bank tellers and customer service representatives claiming compensation for unpaid overtime work -- Plaintiff seeking to adduce affidavit of one of her lawyers summarizing responses of potential class members to survey on defendant's overtime practices -- Motion judge refusing to admit affidavit on grounds that it was not properly before court given agreement at case conference and that it was hearsay and did not meet criteria of reliability and necessity -- Motion judge's ruling affirmed on appeal.

Employment -- Overtime -- Employer's policy requiring pre- approval of overtime -- Policy also allowing employees to choose time off in lieu of overtime pay and requiring payment if time in lieu was not taken within 90 calendar days of overtime worked -- Motion judge not erring in finding that it was plain and obvious that overtime policy was lawful under Canada Labour Code -- Canada Labour Code, R.S.C. 1985, c. L.2.

The plaintiff brought a proposed class action on behalf of approximately 31,000 bank tellers and customer service representatives working in over 1,000 of the defendant's retail branches, claiming compensation for unpaid overtime work. She brought a motion to certify the action as a class proceeding. She sought to adduce the affidavit of one of her lawyers summarizing the responses of potential class members to a survey on the defendant's overtime practices. The motion judge refused to admit the affidavit on the grounds that it was not properly before the court given an agreement at an earlier case conference and that it was hearsay and did not meet the criteria of reliability and necessity. The motion judge held that the plaintiff's claims for breach of contract and unjust enrichment disclosed a cause of action. She struck out the claims that the defendant's Overtime Policy conflicted with the Canada Labour Code. The Policy required pre-approval of overtime. It also allowed employees to choose time off in lieu of overtime pay and required payment if the time in lieu was not taken within [page660] 90 calendar days of the overtime worked. The motion judge found that it was plain and obvious that the pre-approval requirement and the pay in lieu provisions were lawful under the Code. The motion judge found that the plaintiff had failed to show that there was any evidence of a systemic practice of unpaid overtime and that any other issues that might be considered common issues would not significantly advance the litigation. As the essential element of commonality was lacking, the motion was dismissed. The defendant sought costs in the amount of $700,000. The motion judge awarded the defendant costs of $525,000 on a partial indemnity basis. The plaintiff appealed.

Held, the appeal should be dismissed.

Per Swinton J. (Ferrier J. concurring): The motion judge was correct in finding that the Overtime Policy was lawful under the Code.

The motion judge did not err in declining to admit the affidavit.

The burden was on the plaintiff to adduce evidence to establish that there was some basis in fact for the assertion that the claims raised common issues. The motion judge was aware that the plaintiff had only a minimum evidentiary burden. However, she found that there was no evidentiary foundation to show a systemic policy, practice or experience of unpaid overtime. Her conclusion that there was no evidentiary foundation for any common issues that would advance the litigation was deserving of deference.

When the award of costs was compared to costs awards in favour of plaintiffs in certification motions, it was not unprecedented. The motion judge gave effect to the public interest criterion in s. 31(1) of the Class Proceedings Act, 1992, S.O. 1992, c. 6 by reducing the costs sought by the defendant. She made no error in principle, and it could not be said that her award of costs was clearly wrong.

Per Sachs J. (dissenting): The motion judge erred in finding that it was plain and obvious that the Overtime Policy was lawful under the Canada Labour Code. The issues raised were not fully settled in the jurisprudence. Her finding that it was plain and obvious that the Policy was lawful drove her reasoning on the common issues analysis, causing her to make an error that warranted appellate intervention. She recast the plaintiff's case as one for individual claims for unpaid overtime and failed to consider the evidence as to systemic policies and practices that would satisfy the minimum evidentiary basis for showing that a common issue existed. By failing to deal with that evidence, she failed to appreciate the nature of the claim being made by the plaintiff, which was that the failure to pay overtime was attributable to systemic circumstances, not individual circumstances.

APPEAL from an order dismissing a motion to certify an action as class proceedings and from a costs order.

Cases referred to

2038724 Ontario Ltd. v. Quizno's Canada Corp. (2010), 100 O.R. (3d) 721, [2010] O.J. No. 2683, 2010 ONCA 466, 320 D.L.R. (4th) 612, affg (2009), 2009 23374 (ON SCDC), 96 O.R. (3d) 252, [2009] O.J. No. 1874, 70 C.P.C. (6th) 27, 250 O.A.C. 87, 178 A.C.W.S. (3d) 312 (Div. Ct.), revg [2008] O.J. No. 2276, 168 A.C.W.S. (3d) 48, 2008 27822 (S.C.J.); Actton Transport Ltd. v. Canada (Minister of Labour), [2004] F.C.J. No. 807, 2004 FCA 182, 322 N.R. 73, 131 A.C.W.S. (3d) 68; Andersen v. St. Jude Medical, Inc., 2006 85158 (ON SCDC), [2006] O.J. No. 508, 264 D.L.R. (4th) 557, 208 O.A.C. 10, 145 A.C.W.S. (3d) 786 (Div. Ct.); Andersen v. St. Jude Medical Inc. (2003), 2003 5686 (ON SC), 67 O.R. (3d) 136, [2003] O.J. No. 3556, [2003] O.T.C. 826, 38 C.P.C. (5th) 122, 125 A.C.W.S. (3d) 391 (S.C.J.) [Leave to appeal refused [2005] O.J. No. 269, [2005] O.T.C. 50, 136 A.C.W.S. (3d) 799 (S.C.J.)]; [page661] Anderson v. Wilson (1999), 1999 3753 (ON CA), 44 O.R. (3d) 673, [1999] O.J. No. 2494, 175 D.L.R. (4th) 409, 122 O.A.C. 69, 36 C.P.C. (4th) 17, 89 A.C.W.S. (3d) 441 (C.A.) [Leave to appeal to S.C.C. refused [1999] S.C.C.A. No. 476]; Bywater v. Toronto Transit Commission, [1998] O.J. No. 4913, 83 O.T.C. 1, 27 C.P.C. (4th) 172, 84 A.C.W.S. (3d) 230 (Gen. Div.); Cassano v. Toronto-Dominion Bank (2007), 87 O.R. (3d) 401, [2007] O.J. No. 4406, 2007 ONCA 781, 47 C.P.C. (6th) 209; Chabaylo v. Koscis Transport Ltd., [2003] C.L.A.D. No. 519 (England); Cloud v. Canada (Attorney General) (2004), 2004 45444 (ON CA), 73 O.R. (3d) 401, [2004] O.J. No. 4924, 247 D.L.R. (4th) 667, 192 O.A.C. 239, 27 C.C.L.T. (3d) 50, [2005] 1 C.N.L.R. 8, 2 C.P.C. (6th) 199, 135 A.C.W.S. (3d) 567 (C.A.); ConAgra Grain, Canada v. Beare, [2004] C.L.A.D. No. 140 (Hood); Crown Group Security Ltd. (Re), [2004] B.C.E.S.T.D. No. 189 (Empl. Stnds. Trib.) (Lawson); Dobi (Joseph) Painting (Re), June 10, 1980 (Adamson) E.S.C. 799; Fresco v. Canadian Imperial Bank of Commerce, 2009 31177 (ON SC), [2009] O.J. No. 2531, 71 C.P.C. (6th) 97, [2009] CLLC Â210-032 (S.C.J.), supp. reasons [2010] O.J. No. 746, 2010 ONSC 1036; Fulawka v. Bank of Nova Scotia (2010), 101 O.R. (3d) 93, [2010] O.J. No. 716, 2010 ONSC 1148, [2010] CLLC Â210-025 [Leave to appeal granted [2010] O.J. No. 2107, 2010 ONSC 2645 (Div. Ct.)]; Grant v. Canada (Attorney General), [2009] O.J. No. 5232, 81 C.P.C. (6th) 68 (S.C.J.); Griffin v. Dell Canada Inc., 2009 3557 (ON SC), [2009] O.J. No. 418, 72 C.P.C. (6th) 158, 174 A.C.W.S. (3d) 32 (S.C.J.); Hamilton v. Open Window Bakery, [2004] 1 S.C.R. 303, [2003] S.C.J. No. 72, 2004 SCC 9, 235 D.L.R. (4th) 193, 316 N.R. 265, J.E. 2004-470, 184 O.A.C. 209, 40 B.L.R. (3d) 1, [2004] CLLC Â210-025, 128 A.C.W.S. (3d) 1111; Hao v. Canadian Imperial Bank of Commerce, [2008] C.L.A.D. No. 368 (Kaufman); Healey v. Lakeridge Health Corp., [2006] O.J. No. 4277, 38 C.P.C. (6th) 145, 152 A.C.W.S. (3d) 372 (S.C.J.); Hollick v. Toronto (City), [2001] 3 S.C.R. 158, [2001] S.C.J. No. 67, 2001 SCC 68, 205 D.L.R. (4th) 19, 277 N.R. 51, J.E. 2001-1971, 153 O.A.C. 279, 42 C.E.L.R. (N.S.) 26, 13 C.P.C. (5th) 1, 24 M.P.L.R. (3d) 9, 108 A.C.W.S. (3d) 774; Housen v. Nikolaisen, [2002] 2 S.C.R. 235, [2002] S.C.J. No. 31, 2002 SCC 33, 211 D.L.R. (4th) 577, 286 N.R. 1, [2002] 7 W.W.R. 1, J.E. 2002-617, 219 Sask. R. 1, 10 C.C.L.T. (3d) 157, 30 M.P.L.R. (3d) 1, 112 A.C.W.S. (3d) 991; Hunt v. Carey Canada Inc., 1990 90 (SCC), [1990] 2 S.C.R. 959, [1990] S.C.J. No. 93, 74 D.L.R. (4th) 321, 117 N.R. 321, [1990] 6 W.W.R. 385, J.E. 90-1436, 49 B.C.L.R. (2d) 273, 4 C.C.L.T. (2d) 1, 43 C.P.C. (2d) 105, 23 A.C.W.S. (3d) 101; Kindersley Transport Ltd. v. Semchyshen, [2002] C.L.A.D. No. 4 (Wallace); Lambert v. Guidant Corp., 2009 68460 (ON SCDC), [2009] O.J. No. 5264, 256 O.A.C. 299, 2009 CarswellOnt 7662 (Div. Ct.); Lefrancois v. Guidant Corp., 2009 76 (ON SCDC), [2009] O.J. No. 36, 245 O.A.C. 213, 67 C.P.C. (6th) 9, 173 A.C.W.S. (3d) 692 (Div. Ct.); LeFrancois v. Guidant Corp., [2009] O.J. No. 2481, 178 A.C.W.S. (3d) 34, 2009 30448 (S.C.J.); Markson v. MBNA Canada Bank (2007), 85 O.R. (3d) 321, [2007] O.J. No. 1684, 2007 ONCA 334, 282 D.L.R. (4th) 385, 224 O.A.C. 71, 32 B.L.R. (4th) 273, 43 C.P.C. (6th) 10, 157 A.C.W.S. (3d) 29 [Leave to appeal to S.C.C. refused [2007] S.C.C.A. No. 346]; Matson v. Great Northern Grain Terminals Ltd., [2005] C.L.A.D. No. 401 (Melynk); Peter v. Medtronic Inc., [2007] O.J. No. 4828, 50 C.P.C. (6th) 133, 162 A.C.W.S. (3d) 540 (S.C.J.) [Leave to appeal refused 2008 22910 (ON SCDC), [2008] O.J. No. 1916, 167 A.C.W.S. (3d) 462, 55 C.P.C. (6th) 242 (Div. Ct.)]; Quality Travel Inc. and Labo, [1998] C.L.A.D. No. 44 (Germaine); Reimer Express Lines v. Teamsters, Local 938 (Overtime Pay Grievance), [2000] C.L.A.D. No. 762 (Weatherill); Rizzo & Rizzo Shoes Ltd. (Re) (1998), 1998 837 (SCC), 36 O.R. (3d) 418, [1998] 1 S.C.R. 27, [1998] S.C.J. No. 2, 154 D.L.R. (4th) 193, 221 N.R. 241, J.E. 98-201, 106 O.A.C. 1, 50 C.B.R. (3d) 163, 33 C.C.E.L. (2d) 173, 98 CLLC Â210-006; RSB Logistic Inc. v. Hale, [1999] C.L.A.D. No. 548 (Wallace); Ruffolo v. Sun Life Assurance Co. of Canada (2009), 95 O.R. (3d) 709, [2009] O.J. No. 1322, 2009 ONCA 274, 68 C.P.C. (6th) 322, 74 C.C.P.B. 191, 247 O.A.C. 209, 73 C.C.L.I. (4th) 185; T-Line Services Ltd. v. Morin, [1997] C.L.A.D. No. 422 (Emrich); Western Canadian Shopping Centres Inc. v. Dutton, [2001] 2 S.C.R. 534, [2000] S.C.J. No. 63, 2001 SCC 46, 201 D.L.R. (4th) 385, 272 N.R. 135, [2002] 1 W.W.R. 1, J.E. 2001-1430, 94 Alta. L.R. (3d) 1, 286 A.R. 201, 8 C.P.C. (5th) 1, 106 A.C.W.S. (3d) 397 [page662]

Statutes referred to

Canada Labour Code, R.S.C. 1985, c. L-2, ss. 166 [as am.], 168 [as am.], (1), 169 [as am.], (1) [as am.], 170 [as am.], 174, 252(2), 264(a) Class Proceedings Act, 1992, S.O. 1992, c. 6, ss. 5(1), (a), (b), (c), 23, 24, (1), (b), (c), 30(1), 31(1), 34 Criminal Code, R.S.C. 1985, c. C-46, s. 347 [as am.]

Rules and regulations referred to

Canada Labour Standards Regulations, C.R.C., c. 986 [as am.], s. 24 [as am.], (3) Rules of Civil Procedure, R.R.O. 1990, Reg. 194, rule 57.01(1), (d)

Authorities referred to

Federal Labour Standards Review, Fairness at Work: Federal Labour Standards for the 21st Century (Ottawa: Human Resources and Skills Development Canada, 2006)

Counsel

David F. O'Connor, Louis Sokolov, Steven Barrett and Derek McKay, for plaintiff (appellant). Patricia Jackson, Linda Plumpton, Stuart Svonkin, John C. Field and Lauri Reesor, for defendant (respondent). Aaron Dantowitz, for Law Foundation of Ontario.

SWINTON J. (FERRIER J. concurring): -- Overview

[1] Dara Fresco (the "appellant") is the proposed representative plaintiff in an action against the respondent, the Canadian Imperial Bank of Commerce (the "Bank"), claiming compensation for unpaid overtime work. The proposed class action is brought on behalf of approximately 31,000 tellers and customer service representatives working in over 1,000 retail branches across Canada.

[2] The appellant appeals from the order of Lax J. (the "motion judge") dated June 18, 2009, dismissing her motion for certification of the action as a class proceeding because the action lacked the essential element of commonality: Fresco v. Canadian Imperial Bank of Commerce, 2009 31177 (ON SC), [2009] O.J. No. 2531, 71 C.P.C. (6th) 97 (S.C.J.) (the "reasons"). The appellant also seeks leave to appeal the costs order of $525,000 made February 12, 2010 [[2010] O.J. No. 746, 2010 ONSC 1036] (the "costs reasons").

[3] The main issues on this appeal are whether the motion judge erred in failing to find that there were common issues that would advance the proceeding and in rejecting the appellant's [page663] argument as to the illegality of the Bank's Overtime Policy. For the reasons that follow, I would dismiss the appeal on the merits as well as the costs appeal.

The Statutory Framework Governing Hours of Work

[4] The Canada Labour Code, R.S.C. 1985, c. L-2 (the "Code"), Part III governs hours of work for individuals in the federal sector, including bank employees. Subsection 169(1) prescribes the standard hours of work as follows:

169(1) Except as otherwise provided by or under this Division (a) the standard hours of work of an employee shall not exceed eight hours in a day and forty hours in a week; and (b) no employer shall cause or permit an employee to work longer hours than eight hours in any day or forty hours in any week.

[5] "Overtime" is defined in s. 166 to mean "hours of work in excess of standard hours of work". The term "standard hours of work" is defined in s. 166 to mean "the hours of work established pursuant to section 169 or 170 or in any regulations made pursuant to section 175".

[6] Section 174 requires a premium to be paid when an employee is required or permitted to work in excess of the standard hours of work. It reads:

174. When an employee is required or permitted to work in excess of the standard hours of work, the employee shall, subject to any regulations made pursuant to section 175, be paid for the overtime at a rate of wages not less than one and one-half times his regular rate of wages.

[7] The Code prescribes minimum standards to protect employees, but it allows employees to receive greater benefits than those provided in the Code. Subsection 168(1) states:

168(1) This Part and all regulations made under this Part apply notwithstanding any other law or any custom, contract or arrangement, but nothing in this Part shall be construed as affecting any rights or benefits of an employee under any law, custom, contract or arrangement that are more favourable to the employee than his rights or benefits under this Part.

The Factual Background

[8] The appellant has been employed with the Bank since 1998. She has worked at a number of branches in various capacities, including teller or customer service representative ("CSR"), head CSR and personal banking assistant. She proposes to represent a national class of current and former non-management and non-unionized employees of the Bank who worked as front- line customer service employees, including CSRs, [page664] assistant branch managers, financial service representatives ("FSRs"), financial service associates ("FSAs") and branch ambassadors. The class period is to reach back to February 1, 1993.

[9] The appellant claims that there has been a systemic breach of the Bank's duty to compensate eligible employees for overtime work. Through its common employment contracts, policies, practices and omissions, the Bank has failed to compensate the proposed class members for all their hours worked and has placed them all at a risk of non-compensation for overtime work. Alternatively, the Bank had a duty to establish an effective class-wide system to ensure appropriate compensation for overtime work or prevention of hours which would not be compensated, and it breached that obligation.

[10] The appellant frames her claim in breach of contract and unjust enrichment, seeking $600 million in general, punitive, aggravated and exemplary damages.

[11] In her Statement of Claim, the appellant pleads that the Bank knew or should have known, or as it directed or permitted, class members are consistently required to work additional hours to complete their common duties. As well, it is pleaded that class members have been required, encouraged or permitted to record only standard hours of work, and they have been discouraged from submitting overtime claims. Class members were directed to prepare time records describing their hours as no more than their regular daily hours of work, even if they exceeded their regular hours: see Statement of Claim, at paras. 34-35. These practices are said to be "the result of a uniform, consistent and systemic practice of CIBC to refrain from paying class members compensation for additional hours of work, notwithstanding its contractual and statutory obligations to do so" (Statement of Claim, at para. 36).

[12] In the Statement of Claim, the appellant makes reference to the Bank's Overtime Policy dated April 2006 (the "Policy"). For example, she seeks a declaration that the 2006 Policy is unlawful: see Statement of Claim, at para. 1(e). She describes that Policy as creating a barrier to overtime pay: see Statement of Claim, at paras. 21-25.

[13] However, it was made clear in oral argument on this appeal that she took issue with an earlier version of the Policy dated 1993 as well. That earlier policy is referred to only in para. 47 of the Statement of Claim, which states that the former Overtime Policy, as well as the current Policy, do not supply a juristic reason for purposes of the claim for compensation for unjust enrichment. [page665]

[14] The appellant alleges that the Policy is incorporated into the employment contracts of proposed class members. The Bank does not take issue with this assertion.

[15] The 2006 Policy requires pre-approval of overtime work except in extenuating circumstances. It provides:

In order for employees to be compensated for overtime hours worked, the hours must be pre-approved by a manager in advance. Overtime, for which prior management approval was not obtained, will not be compensated unless there are extenuating circumstances and approval is obtained as soon as possible afterwards[.]

[16] The Policy attaches an Overtime Pre-Approval Form. It makes no reference to obtaining approval after the fact.

[17] The Policy provides for calculation of overtime compensation at the rate of time and one-half. The Policy also allows employees to choose time off in lieu of overtime pay, again calculated at time and one-half. If the time in lieu is not taken within 90 calendar days of the overtime worked, the employee must receive payment instead.

[18] Among a bank manager's responsibilities set out in the Policy is the duty to ensure that employees do not work overtime if pre-approval has not been obtained. Among the employee's duties is the duty to "obtain appropriate written authorization prior to working overtime, or if this was not possible, as soon as possible thereafter". The employee is also expected to keep complete and accurate time sheets recording any overtime worked.

[19] The appellant alleges that the Overtime Policy violates s. 174 of the Code, which requires that overtime be paid when an employee is "required or permitted" to work more than his or her standard hours. This is for a number of reasons dealt with below.

[20] The appellant also alleges that the Bank failed to accurately record hours worked by class members as required under ss. 252(2) and 264(a) of the Code and s. 24 of the Canada Labour Standards Regulations, C.R.C., c. 986 (the "Regulations"). In particular, the Bank has no system for keeping track of all hours worked, leaving it to the branch level to keep track of employee hours. Some branches use time sheets; others do not.

[21] The appellant filed an affidavit and reply affidavit. In addition, affidavits were filed by 13 employees and former employees of the Bank who had worked in branches in all regions. The appellant submits that the evidence shows that overtime is a routine aspect of work with the Bank, and that much of a class member's overtime work is not amenable to pre- approval. She describes three groups of employees for whom overtime is a recurring issue: [page666] (1) Tellers are regularly required to prepare their tills or attend meetings in advance of their scheduled shifts, serve customers through their unpaid lunch breaks and after closing, and to complete tasks, such as balancing their tills, after their shifts. (2) Head tellers and assistant branch managers have additional duties that usually require them to work overtime -- for example, supervising tellers, distributing cash to tellers before the branch opens and returning cash to the vault after all tellers have balanced. (3) Sales employees (FSAs and FSRs) are required to meet targets for sales, revenue and customer contact, which often requires work after regular hours.

[22] The Bank responded with 61 affidavits, many from affiants who had worked with the appellant or the individuals who provided affidavits in support of her motion, as well as affidavits from senior officials with the Bank and experts. Essentially, the Bank took the position that there were no common issues, as the entitlement to payment for overtime must be determined on an individual basis.

The Decision of the Motion Judge

[23] In determining whether to grant certification, a motion judge must apply the criteria in s. 5(1) of the Class Proceedings Act, 1992, S.O. 1992, c. 6 (the "CPA"). Following a five-day hearing, the motion judge dismissed the motion for certification.

[24] The first criterion in s. 5(1)(a) is whether the pleadings disclose a cause of action. The motion judge held that the appellant's claims for breach of contract and unjust enrichment disclosed a cause of action. However, she struck out the claims that the overtime pre-authorization and lieu-time provisions of the Overtime Policy conflict with the Code and are unlawful, concluding that it was plain and obvious that the pre-approval requirement for overtime and the time in lieu option comply with the Code.

[25] The motion judge found that there was an identifiable class within s. 5(1)(b), but concluded that the claims of the class members did not raise common issues within s. 5(1)(c).

[26] The appellant proposed nine common issues (attached to these reasons as Schedule A). The motion judge concluded that none of the issues would significantly advance the litigation.

[27] She also concluded that there was no evidentiary foundation for the appellant's assertion of systemic wrongdoing by the Bank. Instances of unpaid overtime occur on an individual basis, [page667] as shown by the appellant's own claim. However, even if there were some evidence of systemic wrongdoing, the motion judge concluded that an examination of individual claims would be necessary to prove that systemic wrongdoing, thereby defeating the purpose of a class action. Her conclusions are summed up at para. 6 of her reasons:

Ms Fresco asserts that there is a common or pervasive or systemic policy, practice or experience of unpaid overtime at CIBC. It is unclear whether she asserts that the allegedly illegal Policy gives rise to this or whether this is advanced independent of the Policy. In either case, it is an assertion of systemic wrongdoing. It is my conclusion that there is no evidentiary foundation for this, but even if there were, this is not a case where questions of systemic wrongdoing can be resolved without examining the individual claims, thereby defeating the purpose of a class action.

[28] In her reasons, the motion judge also dealt with an affidavit from one of the appellant's lawyers, Charlene Wiseman, which summarized the responses of potential class members to a survey on the Bank's overtime practices, found on the website of appellant's counsel. The motion judge held that the affidavit was not properly before the court, given an earlier objection from the Bank's counsel during a case conference, and, in any event, it constituted hearsay and did not meet the tests of necessity and reliability. Therefore, she refused to consider it.

[29] The motion judge concluded that were there common issues, she would have found a class proceeding to be the preferable procedure.

[30] In her subsequent costs decision, the motion judge awarded the Bank $525,000 on a partial indemnity basis, although the Bank sought $750,000. She considered the factors in s. 31(1) of the CPA, namely, whether this was a test case, raised novel questions of law or involved a matter of public interest. She concluded that this was not a test case, nor did it raise novel and significant questions in federal employment law. While there was some public interest element in the claim, the public interest component "does not rise to the level of involving an issue of broad public importance" so as to justify withholding costs from the Bank (costs reasons, at para. 13).

[31] While the appellant submitted that the Bank, in its evidentiary response, engaged in "overkill", the motion judge disagreed, given the way in which the appellant tried to prove her case, with evidence from affiants across the country (costs reasons, at para. 5). She noted that actual fees billed to the Bank were close to $4 million.

[32] In determining the amount of costs that was fair and reasonable, she mentioned the failure of appellant's counsel to disclose [page668] their fees. She also noted that both parties "devoted considerable resources to the proceeding", and therefore, the appellant should reasonably have expected exposure to a substantial costs order (costs reasons, at para. 17).

[33] The motion judge took into account the access to justice concerns of the CPA and the fact that the claim involved a matter of some public interest. In awarding $525,000, she concluded [costs reasons, at para. 18]:

In my view, this award is justified by the amount in issue in the proceeding, its complexity and importance, the reasonable expectations of Ms. Fresco, the success achieved and by the principle of indemnity.

The Issues on Appeal

[34] There are five issues raised on this appeal: (1) Did the motion judge err in determining that it was plain and obvious that the Overtime Policy was lawful under the Code? (2) Did the motion judge err in determining there were no common issues that would significantly advance the litigation? (3) Did the motion judge err in finding the Wiseman affidavit inadmissible? (4) Did the motion judge err in disregarding the expert evidence regarding the prevalence of unpaid overtime in federally regulated industries? (5) Did the motion judge err in her award of costs?

The Standard of Review

[35] An appeal lies to the Divisional Court from an order refusing certification pursuant to s. 30(1) of the CPA.

[36] On appeal, the standard of review on a question of law is correctness. The standard of review for findings of fact is palpable and overriding error, while questions of mixed fact and law are on a spectrum. If a legal question can be separated out, it will be reviewed on a standard of correctness. Otherwise, questions of mixed fact and law will not be overturned absent palpable and overriding error (Housen v. Nikolaisen, 2002 SCC 33, [2002] 2 S.C.R. 235, [2002] S.C.J. No. 31, at paras. 8, 10 and 36-37).

[37] Deference is to be accorded to the decisions of judges hearing certification motions under the CPA. As the Court of Appeal stated in Cassano v. Toronto-Dominion Bank (2007), 87 O.R. (3d) 401, [2007] O.J. No. 4406, 2007 ONCA 781 (at para. 23): [page669]

The motion judge is an experienced class action judge. His decision is entitled to substantial deference: see Markson v. MBNA Canada Bank (2007), 2007 ONCA 334, 85 O.R. (3d) 321 at para. 33 (C.A.), leave to appeal to S.C.C. requested, [2007] S.C.C.A. No. 346. The intervention of this court should be limited to matters of general principle: see Cloud v. Canada (A.G.) (2004), 2004 45444 (ON CA), 73 O.R. (3d) 401 at para. 39 (C.A.), leave to appeal to S.C.C. refused, [2005] S.C.C.A. No. 50. However, legal errors by the motion judge on matters central to a proper application of s. 5 of the CPA displace the deference usually owed to the certification motion decision: see Hickey-Button v. Loyalist College of Applied Arts & Technology (2006), 2006 20079 (ON CA), 267 D.L.R. (4th) 601 at para. 6 (Ont. C.A.).

Issue No. 1: Did the Motion Judge Err in Determining that it was Plain and Obvious that the Overtime Policy was Lawful Under the Code?

[38] On this issue, the standard of review is correctness.

[39] In her reasons, the motion judge focused on the legality of the 2006 Policy, while before this court on appeal, the appellant has also challenged the legality of the 1993 policy.

[40] The appellant submits that the Overtime Policy arguably conflicts with the Code in three respects and, therefore, the motion judge erred in concluding that it was plain and obvious the claim of illegality would fail. First, the Policy states that the Bank will not pay for overtime hours unless they have been formally "authorized", even if they have been required or permitted by management, which is said to be contrary to s. 174 of the Code. Moreover, the guidelines for management state that overtime must be pre-approved and do not provide for post- approval. As well, the Policy contemplates that overtime work may be authorized after the fact only in "extenuating circumstances", and only if approval is sought immediately thereafter.

[41] Before the motion judge, the appellant also argued that the time in lieu option under the Policy is arguably contrary to the Code.

[42] On appeal, two further arguments were raised that were not considered by the motion judge. A third attack on the Policy focused on the fact that if the Bank determines the extra hours worked are non-productive, the hours will not be factored into the calculations for overtime compensation.

[43] The appellant also raised a fourth attack on appeal. Section 174 of the Code entitles employees to overtime pay for all hours they are required or permitted to work in excess of their standard hours of work. Because the Bank employees' standard hours of work are 7.5 hours in a day and 37.5 hours in a week, it is said to be arguable that the Bank's daily overtime threshold of eight hours a day is in violation of the Code. [page670]

The pre-approval requirement

[44] The motion judge correctly set out the applicable "plain and obvious test" before proceeding with her analysis under s. 5(1)(a).

[45] With respect to the pre-approval requirement, the motion judge began her analysis with s. 169(1) of the Code, which sets the standard hours of work and prohibits an employer from causing or permitting an employee to work longer than eight hours in a day or 40 hours in a week, unless otherwise permitted in the Code. In her view, the limitation on an employee's hours of work creates a corresponding right of an employer to control the hours of work (reasons, at para. 29).

[46] She then turned to the overtime provision in s. 174 of the Code. By its words, she concluded, an employee is allowed to claim overtime pay only if the overtime is required or permitted by the employer. In her view, the language of the Code contemplates an employer right to pre-approve overtime. She stated in her reasons, at para. 29:

In order to "require or permit" an employee to work overtime, management must be directly involved in deciding whether the employee works overtime. Indeed, a pre-approval requirement is a way to ensure that an employer complies with s. 171 of the CLC, which states that the total hours worked by an employee in any week shall not exceed 48 hours.

[47] The motion judge concluded that the Policy, on its face, is not illegal. Indeed, it clearly requires managers to approve overtime that they know is to be worked. It also provides that overtime is not to be routinely permitted. She observed that if overtime is routinely required so that an employee can fulfill his or her job duties, that would be a violation of the Policy (reasons, at para. 33).

[48] The appellant argues that the legality of the Overtime Policy turns on the interpretation of the terms "required or permitted" in s. 174 of the Code. She submits that the motion judge erred in relying on the decision of the labour standards referee in Matson v. Great Northern Grain Terminals Ltd., [2005] C.L.A.D. No. 401 (Melnyk), at para. 32, as authority for the proposition that overtime is "permitted" within the Code only where the employee expressly asks permission to work overtime, and permission is expressly or impliedly granted.

[49] I disagree with this characterization of the motion judge's reasoning. She relied on Matson for the proposition that s. 174

. . . expressly denies overtime treatment unless the employer expressly or impliedly asks the employee to work overtime, i.e. it was "required" or the employee asked permission to work overtime and was granted such permission expressly or impliedly, i.e. it was "permitted". (Reasons, at para. 29, quoting Matson, at para. 32) [page671] She found that employers are required to pay overtime where, "as a factual matter", the employer required or permitted overtime to be worked (reasons, at para. 30). The Bank does not dispute this legal obligation to compensate for overtime work.

[50] While the appellant argued that interpretation of "required or permitted" is not settled in the jurisprudence, she provided no cases that show a pre-approval requirement has been held contrary to the Code. In each of the cases cited to the motion judge, and referred to again on appeal, there was no finding that a pre-approval requirement is illegal. Instead, as the motion judge correctly stated, the cases turn on their particular facts and a finding that the employer has required or tacitly approved (that is, "permitted") overtime work in the circumstances: see T-Line Services Ltd. v. Morin, [1997] C.L.A.D. No. 422 (Emrich); Kindersley Transport Ltd. v. Semchyshen, [2002] C.L.A.D. No. 4 (Wallace), at paras. 34-35; RSB Logistic Inc. v. Hale, [1999] C.L.A.D. No. 548 (Wallace); Crown Group Security Ltd. (Re), [2004] B.C.E.S.T.D. No. 189 (Empl. Stnds. Trib.) (Lawson).

[51] The appellant argues that the motion judge also used an incorrect approach to the interpretation of labour standards legislation, particularly when she stated that an employer has a fundamental right to control its business. The Supreme Court of Canada has held that given the remedial purpose of employment standards legislation, such legislation should be interpreted in a "broad and generous manner" and "[a]ny doubt arising from difficulties of language should be resolved in favour of the claimant" (Rizzo & Rizzo Shoes Ltd. (Re) (1998), 1998 837 (SCC), 36 O.R. (3d) 418, [1998] 1 S.C.R. 27, [1998] S.C.J. No. 2, at para. 36).

[52] In my view, the motion judge made no error of law in concluding that the Policy requirements regarding approval of overtime were lawful. The requirement of pre-approval for overtime is consistent with the provisions of the Code. Section 169(1) seeks to protect employees by specifying a threshold for standard hours of work and requiring employers not to cause or require them to exceed those hours. A pre-approval requirement, as the motion judge found, is a way for an employer to ensure that it complies with its obligations under the Code. Moreover, the current Policy provides for approval after the fact where there are extenuating circumstances that prevented the employee from obtaining pre-approval.

[53] An employer has the fundamental right to control its business, including employee schedules, hours of work and overtime hours, providing it complies with the Code: see T-Line Services, supra, at para. 21. A pre-approval requirement is consistent with this right, and nothing in T-Line suggests the [page672] contrary. What T-Line and the other cases say is that an employer has the power and discretion to control hours of work, and "it is reasonable to cast the onus upon management to take active measures to regulate the hours that employees may work" (T-Line Services, at para. 33). Without such control mechanisms, the employer may be found to have permitted overtime work through oversight or omission.

[54] In my view, the motion judge's interpretation of the Code did not depart from the principles enunciated by the Supreme Court of Canada in Rizzo, supra. While she found the Policy to be legal on its face, she also adopted the jurisprudence that gives the words "required or permitted" in s. 174 a broad meaning. She correctly found that an employer cannot avoid its statutory obligations by knowingly permitting an employee to work overtime and then taking the position that overtime is not authorized. In so finding, she recognized the remedial purpose underlying s. 174 of the Code.

[55] In summary, the motion judge did not err in concluding that it was plain and obvious that the pre-approval requirement in the Policy was lawful.

Time in lieu option

[56] The motion judge held that the time in lieu option in the Policy was legal under the Code because of s. 168, which protects contractual provisions more favourable to the employee than the labour standards set out in the Code.

[57] The appellant argues that the time in lieu provision is illegal, as the Code contemplates only payment for overtime and does not permit time in lieu. Her counsel submits that it is not plain and obvious that the provision is legal, given the absence of supporting jurisprudence. Moreover, Professor Harry Arthurs, an expert in the field of labour law, has expressed the view that the Code does not allow employers in the federal sector to use lieu time as a form of compensation for overtime (Fairness at Work: Federal Labour Standards for the 21st Century (Ottawa: Human Resources and Skills Development Canada, 2006)).

[58] The motion judge observed in her reasons that Professor Arthurs made no mention of s. 168 of the Code in his report, although the time in lieu option has been recognized as lawful in the jurisprudence. A number of cases have found a time in lieu provision lawful when there is a meaningful opportunity to take the time in lieu, and there is an option to be paid for the accrued lieu-time entitlement if the lieu time is not taken within a reasonable period of time (Chabaylo v. Koscis Transport Ltd., [2003] C.L.A.D. No. 519 (England); RSB Logistic, supra, at para. 35; [page673] ConAgra Grain, Canada v. Beare, [2004] C.L.A.D. No. 140 (Hood), at para. 32).

[59] The motion judge compared the benefit offered in the Policy with the Code's requirement of payment of wages at the rate of time and a half and concluded that the Policy provided a more favourable benefit. In coming to that conclusion, she commented on the importance of the choice given to the employee and the requirement to "cash out" in 90 days (reasons, at para. 44). In her words (reasons, at para. 40):

It seems plain and obvious that offering employees a choice between wages at time and a half and time in lieu at time and a half is more favourable than providing the statutory benefit without any choice. Furthermore, as entitlement under the Policy is calculated on the basis of 37.5 hours per week rather than 40 hours, a CIBC employee who works, for example, 45 hours in a week is entitled to a choice between 11.25 hours of time away from work or 11.25 hours of wages. Under the CLC, this employee would receive 7.5 hours of wages. A policy that gives an employee a choice between two options, one of which is a quantitatively better version of the statutory benefit, is clearly a more favourable benefit.

[60] In my view, the motion judge was correct in her conclusion that the time in lieu provision in the 2006 Policy is legal under the Code.

[61] On this appeal, counsel argues that she erred in finding the Policy complied with the Code, because the 1993 version did not contain a provision allowing the employee to cash out their unused lieu time. I noted earlier that the relief claimed in the Statement of Claim refers only to the legality of the 2006 Policy. In any event, the 1993 Policy contemplates that time in lieu will be taken within 90 days. The logical implication is that payment will be made for the overtime if time is not taken, as is the case under the current Policy.

Calculation of overtime compensation

[62] On this appeal, counsel for the appellant raised new arguments concerning the legality of the Policy not raised before the motion judge. These arguments are made in the facts section of her factum and were raised in oral argument, although they are not raised in her pleading.

[63] First, she suggests that the Policy is unlawful because it sets the daily overtime threshold at eight hours per day, while the Bank's standard work day is 7.5 hours per day. She submits that this contravenes s. 174 of the Code, which entitles employees to overtime pay when they are required or permitted to work in excess of "their standard hours of work".

[64] As these arguments were never raised before the motion judge, it cannot be said that she erred in her disposition of the [page674] legality issue. However, it is plain and obvious that the Policy's provision for overtime compensation is consistent with the Code.

[65] The Code entitles an employee to overtime if she or he has worked in excess of "the" standard hours of work, defined in s. 166 as the hours established pursuant to ss. 169 or 170, or pursuant to the Regulations. Subsection 169(1) fixes the standard hours of work at eight hours in a day or 40 in a week (see, for example, Actton Transport Ltd. v. Canada (Minister of Labour), [2004] F.C.J. No. 807, 2004 FCA 182 at paras. 9 and 20; Quality Travel Inc. and Labo, [1998] C.L.A.D. No. 44 (Germaine), at para. 41).

[66] The appellant also challenges the legality of the Policy on this appeal on the basis that it excludes contractually mandated breaks and other time the Bank considers non- productive from the overtime calculation.

[67] Again, this argument is without merit. The Code does not require payment, let alone overtime, for time not spent working. Section 166 of the Code defines overtime as "hours of work in excess of standard hours of work". It does not require the inclusion of breaks or other non-working time in the calculation of hours worked for overtime calculation (see, for example, Reimer Express Lines v. Teamsters, Local 938 (Overtime Pay Grievance), [2000] C.L.A.D. No. 762 (Weatherill), at para. 20; Hao v. Canadian Imperial Bank of Commerce, [2008] C.L.A.D. No. 368 (Kaufman)).

Issue No. 2: Did the Motion Judge Err in Determining there were No Common Issues that would Significantly Advance the Litigation?

[68] The appellant proposed a number of common issues concerning the Overtime Policies and recording of hours worked. Issue 1 asked whether the Overtime Policies from 1993 were contrary to the Code. Issue 2 asked whether the Bank had a duty (in contract or otherwise) to prevent or not to permit or encourage unpaid overtime and, if so, whether the duty was breached.

[69] Issue 3 asked if there was a duty to accurately record hours worked and, if so, was there a breach of the duty. Issue 3.1 asked if there was a duty to implement an effective and reasonable system to ensure that the duties in issues 2 and 3 were satisfied.

[70] Issue 4 focused on the relevant terms of the class members' contracts of employment, while issue 5 asked whether any of the terms were breached. Issue 6 asked whether the Bank was unjustly enriched by its failure to pay class members for all hours worked. Issue 6.1 dealt with limitation periods, while issues 7 and 8 dealt with remedy and damages.

[71] In determining whether there are common issues that will significantly advance the litigation, the underlying question is [page675] whether allowing the action to continue as a class proceeding will avoid duplication of fact finding or legal analysis. An issue can be common even if it makes up a limited aspect of liability, and many individual issues remain to be decided after its resolution (Cloud v. Canada (Attorney General) (2004), 2004 45444 (ON CA), 73 O.R. (3d) 401, [2004] O.J. No. 4924 (C.A.), at para. 53). However, an issue must be a substantial ingredient of every putative class member's claim (Cloud, at para. 55).

[72] The burden is on the plaintiff, on a certification motion, to adduce "some evidence" to establish that there is "some basis in fact" for the assertion that the claims raise common issues. This standard is far less onerous than the ordinary civil standard of proof on a balance of probabilities. Indeed, it has been described as a low threshold. As Cullity J. stated in Grant v. Canada (Attorney General), [2009] O.J. No. 5232, 81 C.P.C. (6th) 68 (S.C.J.), at para. 21, there must be "some basis in reality" for the assertion of common issues.

[73] The appellant argues that the motion judge misapprehended the significance of the common issues and inaccurately recast her claim of systemic failings as one that turns on an individual analysis of the circumstances of each class member. In effect, she submits, the motion judge was drawn into the Bank's "straw man" argument by recasting the claim as individual rather than systemic in nature and then attacking the claim as essentially individual in nature and therefore lacking in commonality.

[74] The Bank argues that the motion judge reached an evidentiary conclusion -- namely, that there was no evidentiary foundation of a common issue that was capable of being determined on a class-wide basis and that would advance the litigation. Counsel submits that this conclusion must be respected, absent a palpable and overriding error of fact or an error in principle.

Common issue no. 1 -- The legality of the Overtime Policy

[75] The appellant argues that a common issues trial to determine the legality of the requirements for pre- authorization, standard hours of work and exclusion of "non- productive" time will establish whether the Bank is in breach of the Code and thus, by definition, in breach of each class member's contract of employment.

[76] Given the motion judge's finding of legality respecting the Policy, she understandably held that issue no. 1 was not a common issue. However, she went on to conclude that even if legality were a common issue, that would not advance the claims for unpaid overtime. In her view, the pre-approval requirement does [page676] not cause the wrongs alleged -- that is, the failure to compensate for overtime worked:

. . . if required or permitted overtime is worked but not compensated, this breach of the employment contract occurs independent of the Policy. The legality of the pre-approval requirement does not assist in answering the question whether CIBC has liability for unpaid overtime (reasons, at para. 56).

[77] I agree with her reasoning. The fundamental claim in this case is that the Bank breached the employees' contracts by failing to compensate for overtime worked. The alleged breaches of the Code do not advance the claim for unpaid overtime for class members.

[78] Indeed, I note that the appellant, in her affidavits, does not refer to the Policy as a reason why she did not claim overtime. Indeed, she states that she did not know of the Policy until December 2006. Other affiants also deny knowledge of the Policy. In effect, they claim that the nature of the work and the expectations of managers cause employees to work overtime without proper compensation.

Common issues relating to systemic breach of duty and failure to pay

[79] The motion judge grouped common issues 2 (breach of a duty not to permit unpaid overtime), 3.1 (breach of a duty to maintain a reasonable and effective system to prevent unpaid overtime), 5 (breach of contract) and 6 (unjust enrichment), asking herself whether there is evidence of a systemic policy of unpaid overtime at the Bank. She noted that liability on the part of the Bank "could arise if there is some common act or omission committed by CIBC that caused or contributed to the systemic failure to properly compensate overtime" (reasons, at para. 60).

[80] She was well aware that the appellant had only a minimum evidentiary burden: see reasons, at para. 61. However, she found that there was no evidentiary foundation to show a systemic policy, practice or experience of unpaid overtime at the Bank. After considering the affidavits of the appellant and ten others who provided affidavits, she concluded, at para. 62:

This evidence shows a variety of individual circumstances that give rise to unrelated bases for unpaid overtime claims that can only be resolved individually by considering the evidence of the affiant advancing the claim, the evidence of various other current and former CIBC employees who managed and/or worked with that affiant, and various records maintained on a non-centralized basis by CIBC.

[81] She also concluded that it would be necessary to determine systemic wrongdoing either in a factual vacuum or on the [page677] basis of an individual examination of each claim, thus defeating the purpose of a class proceeding (reasons, at para. 66).

[82] She also found that there was no basis for a duty alleged in issue 3.1 for the Bank to implement some type of system to ensure that it complies with a contractual obligation not to require or permit unpaid overtime (at para. 67). She found no factual basis for such an express or implied contractual term, concluding, at para. 70:

Ultimately, the central flaw in the plaintiff's case is that instances of unpaid overtime occur on an individual basis. This lack of commonality cannot be overcome by certifying an issue that asks whether the defendant had a duty to prevent a series of individual wrongs, without any basis for the existence of this duty and where the duty does not relate to any pleaded cause of action.

[83] The appellant argues that she erred in finding there was no evidentiary foundation for the alleged systemic policy, practice or experience of unpaid overtime. She submits that the pre-authorization requirement in the Policy and the restrictions on calculation of overtime (that is, the standard hours of work issue and treatment of paid breaks) create barriers which prevent, or at least discourage, employees from claiming overtime.

[84] As well, the failure to track all hours of work and time in lieu, the failure to prevent hours of work that the Bank does not intend to compensate, and the failure to audit and ensure compliance are all said to be evidence of a class-wide or systemic compensation system that unlawfully deprives class members of compensation to which they are entitled. The appellant argues that these systematic failures with respect to record keeping put all class members at risk of not being compensated properly.

[85] The appellant argues that there is a sound basis in the jurisprudence for her position that the Bank owes a duty to class members to take reasonable steps to ensure appropriate compensation, prevent unpaid overtime hours and otherwise avoid systemic violations of the Code. Such terms can be implied in the employment contract to ensure the fair functioning of the agreement. Indeed, she pleads that the Bank breached a duty of good faith because of its overtime practices and inadequate record keeping.

[86] In my view, the motion judge did not err by accepting the "straw man" set up by the Bank, as the appellant suggests. She considered the evidence before her and found that there was no basis in that evidence to show that there were systemic breaches by the Bank in its treatment of overtime work that could be proved on a common basis. The appellant has failed to identify any palpable and overriding errors in her treatment of the evidence. [page678]

[87] The appellant says that the motion judge did not identify and analyze the claims as pleaded and asserted, which were systemic in nature. This is a mischaracterization of the motion judge's reasons. She knew that the claims being alleged were systemic in nature. However, she was not satisfied that the evidence met the low threshold to show there were systemic breaches that could be proved on a class-wide basis without entering into a consideration of individual cases. She concluded that there was no evidentiary foundation to show that the Overtime Policy caused a system of unpaid overtime. The appellant has not pointed to evidence showing that she misapprehended the evidence.

[88] While the appellant argues that the provision in the Policy stating that overtime is exceptional is evidence of a barrier to claiming overtime, there is no evidence that is the case. The Policy, by its terms, does not discourage payment of overtime; rather, it discourages overtime work, an objective that is not inconsistent with the Code. Indeed, overtime work without payment is specifically prohibited by the Policy.

[89] While the appellant argued before this court that the 1993 Policy was vulnerable because it did not permit cashing- out lieu time, the evidence from John Silverthorn, the main witness for the Bank and senior vice-president of human resources, retail markets, is that the operation was the same from 1993 to 2006.

[90] The motion judge concluded that the only way to prove systemic wrongdoing in the treatment of overtime work was through an examination of individual claims. Given the variety of jobs performed by class members, the different practices of different managers and branches, and the different experiences of the affiants put forward by the appellant, the motion judge very reasonably concluded that the evidence of the affiants did not show a common experience with respect to unpaid overtime. Therefore, there was no common issue of systemic wrongdoing that was a substantial ingredient of each class member's claim.

[91] Indeed, an examination of the appellant's own evidence is telling in showing the individual nature of her claim. In her affidavits, she made sweeping claims that she was not paid for overtime work in a number of branches and in a number of jobs.

[92] The Bank does not have records of her hours for the later 1990s, as the Code requires record keeping for only three years. However, one branch did find records for the appellant for 1998-1999. They showed that she was generally not working overtime. However, when she exceeded her regular hours, she recorded them, and she was paid for them. [page679]

[93] Payroll records for the preceding three-year period show that she was paid for 37.5 hours a week except for two times when she submitted time sheets claiming overtime, and she was paid for the overtime.

[94] She claims that overtime began to be excessive when she returned from maternity leave in September 2006. However, the merits of her claim turn on the facts surrounding breaks she was allowed, as an accommodation, to allow her to pump breast milk. There is a dispute as to their length and whether they count as working time.

[95] There were two occasions where she was paid for overtime even though she had not obtained pre-approval. I note, as well, that she stated that she first became aware of the Overtime Policy in December 2006. She stated that until reading that policy, "I had no knowledge of the policy or the requirement to seek pre-approval for the overtime hours I worked" (affidavit, at para. 69).

[96] Thus, the appellant's own evidence does not provide an evidentiary foundation to show that there is a systemic problem, particularly one linked to the Overtime Policy. As the motion judge found, her complaints are unique to her situation and a good example of the individual nature of the claim (reasons, at para. 63).

[97] The motion judge reviewed the cases of the other ten deponents as well. For example, one employee arrived early in the mornings because her husband dropped her off on his way to work. The evidence from the Bank is that she has been instructed not to work in the period before her scheduled hours, and she agreed that she sometimes worked on personal things in this period. Her case does not suggest any problem with a Policy requiring pre-approval. Rather, it raises issues of whether she was "permitted" to work overtime, given the manager's instructions to her.

[98] Another employee, Monique Bodson, claimed she had generally not claimed for overtime because one of her managers discouraged it, but she also gave evidence that she was sometimes paid for overtime work. She also stated that she did not recall ever reading an Overtime Policy while employed at the Bank.

[99] Two deponents learned that they had been paid for all their work, and that they were mistaken in their claims for overtime. Again, this demonstrates the individual nature of the claims.

[100] The motion judge concluded, after examining the experiences of these individuals and others that the alleged illegality of the Policy would not advance the case, as the claims do not [page680] show the Policy was a barrier to the payment of overtime. This is not a case like Markson v. MBNA Canada Bank (2007), 2007 ONCA 334, 85 O.R. (3d) 321, [2007] O.J. No. 1684 (C.A.), where the plaintiff alleged that the defendant had charged a criminal rate of interest on cash advances. There, if the plaintiff could prove the defendant administered cash advances in a way contrary to s. 347 of the Criminal Code, R.S.C. 1985, c. C-46 and/or in breach of contract, potential liability to all class members would be established (at para. 49). Each member of the class would be entitled to declaratory and injunctive relief. Here, proof of the illegality of the Policy would not assist in determining the claims of the deponents or of the other members of the class for overtime compensation.

[101] The appellant makes much of the fact that a class proceeding has been certified by Strathy J. in Fulawka v. Bank of Nova Scotia (2010), 101 O.R. (3d) 93, [2010] O.J. No. 716, 2010 ONSC 1148 (leave to appeal granted [2010] O.J. No. 2107, 2010 ONSC 2645 (Div. Ct.)), another overtime case decided following the decision in the present case. The class consists of personal banking officers, financial advisors and accounts managers for small businesses at the Bank of Nova Scotia ("BNS").

[102] I note that all the proposed class members in Fulawka share a similar type of employment, as they are involved in selling bank products and services to customers. The plaintiff in that action claims that there has been unpaid overtime caused by systemic wrongs at BNS. The motion judge concluded that there was an evidentiary basis of systemic wrongs that gave rise to a common issue respecting the employer's breach of its duty of good faith to employees.

[103] In doing so, Strathy J. was careful to point out how the allegations and evidence before him differed from that before Lax J. in the proceeding under appeal. In particular, he concluded that there was evidence to show that the plaintiff and other class members routinely worked overtime to complete their ordinary duties (Fulawka, at para. 123). As well, there was evidence that the failure to pay overtime occurred because of the BNS overtime policy requiring prior approval, and not independent of the policy. There was no provision in the policy for approval after the fact. As well, there was evidence that the failure to pay overtime was attributable to systemic conditions, as opposed to individual circumstances (Fulawka, at para. 4).

[104] Strathy J. described the employees in the class as caught in a Catch-22 situation -- required to obtain prior approval for overtime but performing overtime work that was not predictable and where prior approval could not readily be obtained [page681] (at para. 123). Given the type of work, the policy of prior approval and the lack of a system-wide procedure to record overtime, he found some basis in fact for a common issue whether the BNS breached a duty of good faith to employees (at paras. 4, 123-129).

[105] The appellant suggests that Strathy J. and Lax J. adopted fundamentally different principles. I disagree. Each motion judge applied the legal principles concerning common issues to the facts and pleadings before them.

[106] In the Fulawka case, there was evidence that the plaintiff was refused overtime because of the BNS Overtime Policy requiring prior approval: see Fulawka, at para. 136. In contrast, in the present case, the appellant makes no allegation that she was denied overtime because she failed to obtain approval in accordance with the Policy. It is her evidence that she did not know about the Policy until December 2006, and that she was not paid overtime because her managers often refused to approve it when she filed records of her hours. However, her evidence also shows that sometimes she was paid for overtime work.

[107] In this case, unlike Fulawka, the proposed class contains employees doing a variety of different functions, including tellers, financial service representatives (similar to the group in Fulawka) and assistant branch managers. The evidence here is clear that the reasons for working overtime differ among these groups because of the nature of their employment, and that the ability to obtain prior approval varies. In any event, the CIBC Policy permits approval after the fact, and there is evidence that some affiants were paid overtime even though they had not obtained prior approval.

Common issue no. 3 regarding the duty to keep records

[108] The appellant submits that there is a systemic problem because the Bank does not have uniform record-keeping requirements across all branches.

[109] The Bank acknowledges that it has a duty under the Code and the Regulations to keep records of hours worked by employees in the proposed class, to keep such records for 36 months and to ensure appropriate compensation is paid for hours worked.

[110] With respect to whether the Bank has breached its duty to keep records, the motion judge found that there was no evidence that the Bank systematically failed to keep records: see reasons, at para. 57. She also concluded that while a common issues trial judge could decide the legality of the method used for record keeping, the determination would not materially advance [page682] the litigation, as there is no independent cause of action asserted for the failure to keep proper records.

[111] The motion judge correctly concluded that the Code and Regulations do not require a particular method of record keeping, nor do they require a uniform, centralized method of keeping records. Indeed, the Regulations provide in s. 24(3) that "[a]ny method of reporting absences from employment or overtime hours of work that discloses the particulars required by subsection (2), including regular daily hours of work, shall be a sufficient record for the purposes of these Regulations."

[112] The Bank adduced evidence to show that it makes and retains the records required by the Code and Regulations, and it does so in various forms, including time sheets, schedules and payroll records. There is nothing in the appellant's evidence that suggests the record-keeping practices do not comply with the Code and Regulations.

[113] Nor has the appellant suggested that there is a common flaw in the record keeping. The motion judge concluded that "there is no evidence that CIBC systematically failed to keep records" (reasons, at para. 57). The appellant has not pointed to evidence to the contrary that the motion judge ignored.

[114] In any event, even if the appellant were able to show that the Bank's practice of record keeping was not in compliance with the Code and Regulations, I agree with the motion judge that this would not materially advance the litigation. It would still be necessary to inquire into the accuracy of the records respecting each class member in order to determine whether that individual had worked overtime without compensation.

Common issue no. 3.1 regarding a duty to implement systems or procedures

[115] In proposed common issue 3.1, the appellant asks whether the Bank had a duty to establish an effective and reasonable system to ensure appropriate compensation for all hours worked and to prevent unpaid overtime. The appellant argues that the motion judge erred in summarily rejecting the existence of the alleged duty.

[116] I see no error on the part of the motion judge. First, this common issue is not distinct from proposed common issues 2 and 3, the alleged duty to prevent overtime which is not properly compensated and the duty to maintain accurate records of work. Second, there is no requirement in the Overtime Policy or the Code and its Regulations establishing such a duty. Nor has the appellant shown any basis for a non-contractual duty arising at common law or equity. [page683]

[117] The appellant relies on the T-Line Services case, supra, to show such a duty. However, there is nothing in the reasons that suggests an employer has a legal duty to create or maintain any particular system or procedure to track overtime, such as described in proposed common issue 3.1.

[118] Third, the duty does not relate to any pleaded cause of action. The Statement of Claim alleges systemic problems in that employees are actively discouraged to report their hours. There is no pleading of a duty to maintain a particular system of record keeping.

[119] Fourth, this issue would not meaningfully advance the litigation. As the motion judge stated, the claim is that the Bank failed to compensate members of the proposed class for overtime worked. Determining whether the Bank had an implied legal duty to implement a particular kind of record scheme would not materially advance the litigation.

Common issue no. 4 regarding the terms of the employment contracts

[120] The motion judge concluded that proposed common issue 4, which addresses the terms of the employment contract, could be a common issue, but that it would not sufficiently advance the litigation, as the central issue in the case is whether the Bank breached the duties owed in some common or systemic way (reasons, at para. 59).

[121] The appellant submits that the motion judge erred in concluding that the common issues have to resolve the entire question of liability, referring to paras. 59 and 95 of her reasons.

[122] In my view, the appellant has misstated what the motion judge said. She did not require the common issues to resolve all issues of liability. She correctly stated that the common issues identified must advance the litigation sufficiently to justify certification.

[123] I see no error in the motion judge's conclusion that issue number 4 would not significantly advance the litigation. The Bank has acknowledged that the terms of the Overtime Policy and the requirements under the Code respecting overtime hours, recording of hours worked, paid breaks and payment of hours worked are incorporated into the employment contracts of the proposed class members.

[124] In any event, as the motion judge concluded, resolving the issue of the terms of the employment contracts would not significantly advance the litigation. The dispute in this case is not with respect to the terms of the employment contracts; rather, the dispute is whether the Bank has breached the terms of [page684] an employee's contract by failing to pay compensation to that employee for overtime hours worked.

Common issues regarding class-wide remedies

[125] The appellant claims that the following class-wide remedies are appropriate if common issues of liability are resolved in her favour: aggregate damages through ss. 23 and 24 of the CPA, declaratory relief that the Bank violated the Code, injunctive relief, and aggravated, punitive and exemplary damages.

[126] The motion judge concluded that a declaration that the Policy or its application is unlawful would not be a matter of substantial common interest, given that failure to pay overtime compensation must be determined on an individual basis (reasons, at para. 81). She also concluded there was no common issue respecting damages, as entitlement to damages will vary from class member to class member depending on the amount of unpaid overtime worked by each (reasons, at para. 81).

[127] To establish at the certification stage that there is a common issue with respect to the appropriateness of an aggregate assessment of damages, a plaintiff must demonstrate that there is a "reasonable likelihood" that the conditions in s. 24(1) of the CPA would be satisfied and that an aggregate assessment would be made if the plaintiff were successful at trial. This test is met where liability can be established on a class-wide basis (Cassano, supra, at paras. 44-49).

[128] In this case, there is no possibility that the condition in s. 24(1)(b) can be satisfied because the Bank's liability to employees for unpaid overtime cannot be established on a class-wide basis. As the motion judge found, there is no way to determine liability at one time for all members of the class with the only remaining issue being damages.

[129] Nor is there a reasonable likelihood that the condition in s. 24(1)(c) could be satisfied in this case, as the appellant is seeking to use statistical and sampling techniques to prove liability, as contrasted with the proof of damages.

[130] The Court of Appeal's decisions in Cassano and Markson, supra, do not support certification in the present case. In those cases, the wrongful act of the defendant caused a common harm for which class members were seeking a remedy.

[131] In the present case, the motion judge found that the harms alleged by the appellant were not common to the class nor caused by the alleged illegality of the Overtime Policy. Moreover, determining the legality of the Overtime Policy would not establish the Bank's liability or potential liability to members of the class for breach of contract or unjust enrichment. There [page685] would still need to be an inquiry into the circumstances of each class member to determine whether the Bank breached the employment contract or was unjustly enriched by the failure to compensate overtime work.

Conclusion on common issues

[132] In summary, I see no error in principle nor any palpable and overriding error of fact made by the motion judge in reaching her conclusion that the common issues criterion was not met in this case. The motion judge reviewed the extensive evidence provided by the appellant, as well as the respondent, and concluded that there was no evidentiary foundation for any common issues that would advance the litigation. Most importantly, she concluded that the appellant failed to show that there was any evidence of a systemic practice of unpaid overtime at the Bank, and any other issues that might be considered common issues would not significantly advance the litigation. Her conclusions are deserving of deference.

Issue No: 3: Did the Motion Judge Err in Finding the Wiseman Affidavit Inadmissible?

[133] The appellant argues that the motion judge erred in refusing to admit the Wiseman affidavit on the grounds that it was hearsay, and it did not meet the criteria of reliability and necessity.

[134] She submits that hearsay evidence has been admitted in other cases -- for example, in Griffin v. Dell Canada Inc., 2009 3557 (ON SC), [2009] O.J. No. 418, 72 C.P.C. (6th) 158 (S.C.J.), at para. 83. However, in that case, the defendant did not object to the evidence at the time of the certification motion. Moreover, the evidence showed common problems experienced by users of five models of computers.

[135] I see no error in law in her conclusion that this evidence should not be admitted. One reason for her conclusion was the view that the affidavit was not properly before the court, as the appellant had not brought a motion to admit it or to seek directions. While the appellant disputes the motion judge's views on the propriety of the way in which the affidavit was presented, Lax J. was the case management judge in this proceeding and in the best position to determine whether the admissibility of the affidavit should have been determined by bringing a motion.

[136] The motion judge's second reason for rejecting the evidence was its hearsay nature. The survey evidence was described by the motion judge as a "self-selected survey sample" to a question on a website was to whether putative class members had [page686] worked unpaid overtime and, if so, how much. She concluded that without cross-examination, the Bank cannot determine whether these claims of unpaid overtime were truthfully reported and accurate.

[137] That was a reasonable conclusion on her part. It is evident from the cross-examinations of the affidavits filed that some of the affiants were mistaken as to their legal entitlement to overtime, and others had not stated amounts that were correct. This illustrates the need to assess the individual claims of those who filled out the survey, since they too may be in error with respect to their entitlements.

[138] Given the problems with the reliability of this evidence, the motion judge made no error in law in refusing to admit it.

Issue No. 4: Did the Motion Judge Err in Disregarding the Expert Evidence Regarding the Prevalence of Unpaid Overtime in Federally Regulated Industries?

[139] The appellant also argues that the motion judge erred in rejecting the evidence of Professor Judith Fudge relating to the prevalence of unpaid overtime in federally regulated industries. None of this evidence related specifically to the respondent Bank.

[140] The motion judge found that this evidence provided "no basis in fact that there is a systemic practice of unpaid overtime at CIBC". In my view, she properly disregarded this evidence.

Issue No. 5: Did the Motion Judge Err in Her Award of Costs?

[141] The appellant sought leave to appeal the costs order and, if leave were granted, sought an order that there be no costs, or that the costs order be reduced. The Bank opposed the leave motion and argued that there was no error of principle in the order of costs.

[142] Given the magnitude of the award, I would grant leave to appeal the costs order, although I would dismiss the appeal.

[143] The appellant, supported by the Law Foundation of Ontario, argued that the amount of $525,000 in costs is unprecedented for an award to a defendant in a certification motion. It is more than twice the highest amount awarded to a single successful defendant on a certification motion: see 2038724 Ontario Ltd. v. Quizno's Canada Corp., [2008] O.J. No. 2276, 2008 27822 (S.C.J.), set aside on appeal (2009), 2009 23374 (ON SCDC), 96 O.R. (3d) 252, [2009] O.J. No. 1874 (Div. Ct.), affd (2010), 100 O.R. (3d) 721, [2010] O.J. No. 2683, 2010 ONCA 466.

[144] The appellant argues that the motion judge erred in three ways. First, while the motion judge stated that this case [page687] was factually complex, the appellant argues that it was no more complex than many other class proceedings -- for example, those raising issues of products liability or price fixing. Second, the motion judge inappropriately considered that the Bank defended this motion so rigorously because its reputation was at stake. Third, she failed to consider the reasonable expectations of the losing party, and the fact that the Bank's defence was an overkill response. In her factum, the appellant also emphasized the chilling effect of this award on prospective plaintiffs.

[145] The Law Foundation also argued that the motion judge gave insufficient weight to the evidence of behaviour modification as a result of this motion -- for example, at the BNS and among other employers.

[146] Costs are in the discretion of the judge, and an appellate court should not interfere with an award of costs unless there has been an error of principle or the award is plainly wrong (Hamilton v. Open Window Bakery, 2004 SCC 9, [2004] 1 S.C.R. 303, [2003] S.C.J. No. 72, at para. 27). Further principles that should be applied in a class proceeding appeal were set out in Andersen v. St. Jude Medical, Inc., 2006 85158 (ON SCDC), [2006] O.J. No. 508, 208 O.A.C. 10 (Div. Ct.), at para. 22, in reasons authored by the motion judge in the present appeal.

[147] The motion judge was well aware of the magnitude of the award and still concluded that it was reasonable, stating [costs reasons, at para. 18]

. . . justice is a two-way street in class proceedings in Ontario and awards in this range and higher have been made in favour of successful plaintiffs in other cases. I have no doubt that if Ms. Fresco had emerged as the successful party, she would be seeking costs that would also leave one breathless. This award, even if unprecedented, represents a fair and reasonable amount for the unsuccessful party to pay to the successful party in the particular circumstances of this case.

[148] I am not satisfied that the motion judge made any error in principle. She considered the factors in s. 31(1) of the CPA, which states that a judge, in exercising his or her discretion to award costs, "may consider whether the class proceeding was a test case, raised a novel point of law or involved a matter of public interest". She also applied the factors set out in rule 57.01(1) [of the Rules of Civil Procedure, R.R.O. 1990, Reg. 194], including the principles of indemnity and the reasonable expectations of the unsuccessful party.

[149] The Court of Appeal has stated that the factors in s. 31(1) "'should be given significance' in the exercise of the court's discretion to determine costs in the proceeding" [page688] (Ruffolo v. Sun Life Assurance Co. of Canada (2009), 95 O.R. (3d) 709, [2009] O.J. No. 1322, 2009 ONCA 274, at para. 31). The weight to be given to the factors is a matter of discretion (at para. 32), while the application of s. 31(1) is to be seen through the goals of the CPA -- access to justice, behaviour modification and judicial economy (at para. 33).

[150] With respect to s. 31(1) of the CPA, the Law Foundation argued that the motion judge failed to consider the evidence of the impact of the certification motion on behaviour modification in the banking sector and among other employers. Thus, it is submitted, the appellant's efforts to certify her claims as a class action clearly engaged the public interest and advanced the goal of behaviour modification.

[151] The motion judge did give effect to the public interest criterion by reducing the costs sought by the Bank. On this appeal, the Law Foundation is really taking issue with the weight she gave to the public interest aspect of the litigation in her award of costs. However, that is a matter within her discretion.

[152] Moreover, even if the certification motion may have had an impact on the behaviour of the BNS or other employers, that does not justify the denial of costs to the respondent. The motion judge determined that there was no basis in fact for the appellant's allegation of systemic failures that could be common issues, and therefore, as the respondent succeeded in the proceeding, it should be awarded costs. I see no error in principle in that determination.

[153] The appellant submitted that certification motions of comparable complexity should result in comparable costs awards. This is a principle enunciated in Andersen, supra. However, the appellant wishes to compare costs awards made only against plaintiffs and not costs awards against defendants. The motion judge concluded that this was not the appropriate comparator. When the award in this case is compared to costs awards in favour of plaintiffs in certification motions, it is not unprecedented (see, for example, Andersen, supra; Lambert v. Guidant Corp., 2009 68460 (ON SCDC), [2009] O.J. No. 5264, 256 O.A.C. 299, 2009 CarswellOnt 7662 (Div. Ct.)).

[154] The appellant also argued that the Bank engaged in overkill. In response to her 16 affidavits, 13 of which were from lay affiants, the Bank answered with 61 affidavits, 56 being lay affiants. These included seven affidavits challenging the appellant's evidence. The appellant responded with 16 reply affidavits.

[155] The motion judge is very experienced in class proceedings, and she was in the best position to determine whether the Bank engaged in overkill, given that she case managed this [page689] proceeding, and she heard the certification motion. She concluded that the Bank's response was a necessary one, stating [costs reasons, at para. 5]:

I do not see how CIBC could have demonstrated the individual nature of the disputed claims for overtime . . . without gathering evidence from a significant number of witnesses who had worked with and/or managed the plaintiff's witnesses at different times and at different branches in different parts of the country.

[156] The appellant submitted that the motion judge erred in stating that the allegations raised significant reputational and financial issues for the Bank, requiring a rigorous response. She argued that this is akin to awarding costs on a substantial indemnity basis.

[157] I disagree. The motion judge was not making a punitive costs award. It is clear that she based her decision on the correct principles for the award of costs. She referred to the Bank's concerns for its reputation as an explanation why the Bank responded as it did and to show the importance of the issues to the parties (a relevant consideration under rule 57.01(1)(d)). She also referred to the impact on reputation as an indication why the appellant should have foreseen that a substantial costs order might ensue if the appellant were not successful.

[158] In Andersen, supra, the Divisional Court observed that "[a]ppellate intervention based solely on quantum is problematic because there is no meaningful way to determine when a number is too high" (at para. 22).

[159] In effect, the appellant and the Law Foundation are asking this court to interfere with the motion judge's exercise of discretion and to substitute our own determination of the appropriate quantum of costs. As she made no error in principle, and it cannot be said that her award of costs is clearly wrong, I would dismiss the costs appeal on the merits.

Conclusion

[160] For these reasons, the appeal and costs appeal are dismissed. If the parties are unable to agree on costs of the appeal, they may make written submissions through the office of the registrar within 30 days of the release of these reasons.

SACHS J. (dissenting): -- Introduction

[161] With the greatest of respect to the motion judge, in my view, she erred when she found that it was plain and obvious that CIBC's Overtime Policy was lawful under the [page690] Canada Labour Code, R.S.C. 1985, c. L-2 (the "Code") and she erred when she found that there were no common issues that would significantly advance the litigation.

[162] With respect to the legality of CIBC's Overtime Policy, the "plain and obvious" threshold has not been met. There are arguments to be made on both sides of the question. The issue is not fully settled in the jurisprudence.

[163] With respect to her analysis on the common issues, she disregarded and never dealt with the evidence on the record that support the appellant's assertions of a systemic problem respecting overtime compensation at the CIBC. This evidence was, in my view, sufficient to satisfy the low evidentiary burden that the appellant has on a motion such as this. Furthermore, in dealing with the evidence as to the common issues, the motion judge essentially accepted, on a contested record, the respondent's characterization of that evidence. To do so necessarily involved weighing evidence and making findings of credibility, something that was not properly part of her function at the certification stage.

[164] The errors that the motion judge made are errors that warrant appellate intervention. Given this, I have reluctantly concluded that the decision of the motion judge should be set aside and an order should be made certifying the action.

Issue No. 1: Did the Motion Judge err in Determining that it was Plain and Obvious that the Overtime Policy was not Unlawful Under the Code?

[165] I agree with my colleagues that on this issue the standard of review is correctness. I also agree that the motion judge correctly set out the law. In my view, where she erred was in not applying that law. More specifically, while it may be that the Policy will be found at trial to be lawful under the Code, it is not plain, obvious and beyond doubt that this is so. The issues raised are not fully settled in the jurisprudence.

[166] There are arguments to be made on both sides of the question. The motion judge adverted to these arguments, weighed them and then, essentially, accepted one over the other. In doing so, she exceeded her mandate under s. 5(1)(a) of the Class Proceedings Act, 1992, S.O. 1992, c. 6 (the "CPA"). That mandate is not to inquire into the merits of the action, but simply to determine whether the constitutive elements of a cause of action have been sufficiently pleaded. The motion judge is only to refuse to certify if there is a radical defect in the plaintiff's claim or it is plain and obvious that it cannot possibly succeed: Hollick v. Toronto (City), 2001 SCC 68, [2001] 3 S.C.R. 158, [2001] S.C.J. No. 67, at para. 16; [page691] Hunt v. Carey Canada Inc., 1990 90 (SCC), [1990] 2 S.C.R. 959, [1990] S.C.J. No. 93; Anderson v. Wilson (1999), 1999 3753 (ON CA), 44 O.R. (3d) 673, [1999] O.J. No. 2494 (C.A.), at p. 679 O.R., leave to appeal to S.C.C. refused [1999] S.C.C.A. No. 476; Healey v. Lakeridge Health Corp., [2006] O.J. No. 4277, 38 C.P.C. (6th) 145 (S.C.J.), at para. 25.

The pre-approval requirement

[167] In her Statement of Claim, the appellant pleads as follows:

9. As CIBC knew or should have known, or as it directed or permitted, the class members are consistently required to work additional hours in order to complete the common duties of their positions.

10. CIBC has required, encouraged or permitted class members to record only their standard hours of work and has discouraged employees from submitting claims for overtime. When class members have had the temerity to claim overtime, CIBC has often refused, as a matter of practice or policy, to pay for the hours worked and has done so without lawful excuse. In fact, as set out in the Current Overtime Policy, described below, in the absence of prior approval, CIBC will refuse to pay overtime to class members unless the class member establishes that extenuating circumstances are present. . . . . .

11. At each of the branches where the plaintiff has worked and all other branches, the class members, including the plaintiff, have regularly worked in excess of their agreed upon regular daily hours of work, including working before the scheduled beginning and after the scheduled end of their shifts, and during lunch breaks, to perform work or services for CIBC's benefit and at its direction or with its permission and knowledge. . . . . .

12. As a teller, the plaintiff has worked, on average, approximately two and one half to five hours per week beyond the regular daily hours of work that she was paid for. As a personal banker, the plaintiff has worked, on average five to 15 hours per week beyond her regular daily hours of work. At present, since November 2006, the plaintiff works, on average, approximately two and one half hours per week more than her regular daily hours of work.

13. The additional time that the plaintiff works is necessary in order to complete the basic duties of her position as known to, or directed by, CIBC. She has been directed by CIBC not to report any of this additional time on her timesheets and not to make any claim for overtime. All class members are similarly directed by CIBC not to report any of their additional time on their timesheets and not to make any claim for such additional hours, which CIBC knows are necessary in order to complete the standard job requirements such as balancing before leaving work.

[168] For the purposes of this aspect of the certification motion, these statements must be accepted as proven: see [page692] Peter v. Medtronic Inc., [2007] O.J. No. 4828, 50 C.P.C. (6th) 133 (S.C.J.), at para. 30.

[169] The appellant asserts that the pre-approval requirement in CIBC's Overtime Policy restricts the employer's obligation to pay for overtime in a way that runs contrary to the provisions of the Code.

[170] Section 174 of the Code provides that an employee must be compensated for overtime if that overtime is "required or permitted" by the employer. The motion judge relies on a labour standards referee's decision in Matson v. Great Northern Grain Terminals Ltd., [2005] C.L.A.D. No. 401 (Melynk), at para. 32, as authority for the proposition that "permitted" means that "the employee asked permission to work overtime and was granted such permission expressly or impliedly".

[171] However, the interpretation of "required or permitted" does not appear to be settled in the jurisprudence. There are a number of decisions that support the interpretation that "permitted" does not entail the onus being placed on the employee to ask for permission, but that overtime is "required or permitted" if an employer knows or ought to know that an employee is working overtime but fails to take reasonable steps to prevent the employee from working.

[172] In T-Line Services Ltd. v. Morin, [1997] C.L.A.D. No. 422 (Emrich), at para. 30, the labour standards referee refers to Dobi (Joseph) Painting (Re), June 10, 1980 (Adamson) E.S.C. 799 for the proposition that:

The law is clear with respect to overtime work. The responsibility rests fully with the employer. If he does not wish employees to work overtime, he must not only order them to stop, but see that they do.

[173] The referee in T-Line Services makes the following comment about Dobi (Re), at para. 31:

While the foregoing case is of persuasive value only, its reasoning is consistent with the purposes and language embodying standards pertaining to overtime in both the provincial statute and Canada Labour Code.

[174] The referee goes on as follows, at paras. 33 and 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 effective 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.

Furthermore, the employment standards pertaining to overtime provide a floor of entitlement to employees who work for the benefit of the enterprise beyond the standard hours, albeit without express authorization [page693] from management to do so, but within the knowledge and discretion of management to control. Were management able to avoid liability for overtime entitlement by turning a blind eye to such work, the avenue for exploiting the efforts of the worker and subverting the efficacy of the employment standard is apparent. Accordingly, the Canada Labour Code envisages liability for overtime whenever it is "permitted", although perhaps not "required" by management.

[175] In RSB Logistic Inc. v. Hale, [1999] C.L.A.D. No. 548 (Wallace), the labour standards referee found [at paras. 30, 31 and 37]:

When the Employer says most of the overtime hours were not "authorized", it appears the Employer means that the hours were not "pre-authorized" by a company official. This, however, is not the test under Section 174 of the Code. The test is whether the overtime was "required or permitted".

In this case, there is no question that all the overtime was either required or permitted. An employer cannot sit back and knowingly permit an employee to work overtime and then later attempt to stand behind an unwritten policy that the employer will not pay for overtime unless it is authorized in advance . . . While this overtime may not have been "pre- authorized" in the sense used by the Employer, it was nevertheless "permitted" within the meaning of the Code. . . . . .

. . . The Code requires that if an employee is required or permitted to work hours in excess of the standard hours, then the employee is entitled to overtime pay. An employer cannot avoid these statutory obligations by knowingly permitting employees to work overtime and then later taking the position the overtime was not authorized. This is in fact the mischief sought to be avoided by the use of the word "permitted" in Section 174.

[176] In Kindersley Transport Ltd. v. Semchyshen, [2002] C.L.A.D. No. 4 (Wallace), the same referee states as follows in relation to an overtime policy that provided for no overtime without prior authorization [at para. 35]:

The Employer argues that this means the Employee must receive prior approval to work overtime. No matter what interpretation one places on this statement in the policy, the policy cannot be permitted to circumvent the clear provisions of The Code requiring overtime pay when an employee is "required or permitted" to work in excess of the standard hours of work.

[177] The motion judge adverts to these authorities in her decision, but states that they are "fact-specific". I agree that the decisions do turn on specific facts and do not contain a general finding that an overtime policy with a pre-approval requirement is contrary to the Code. However, these authorities do disagree with two dicta made in Matson that are relied upon by the motion judge. [page694]

[178] First, in Matson the referee found that "permitted" equates with the employee asking permission and then being granted that permission, either expressly or impliedly. Second, Matson recognizes that this puts the onus on the employee, but finds that this is completely appropriate. Otherwise, as put by the referee in that case, an employee could "'foist' services on an employer and expect to be paid wages for them" (para. 31).

[179] In T-Line Services, RSB Logistic and Kindersley Transport, the referees find that under the Code the onus is on the employer, not the employee, to ensure that employees do not work overtime that they are not paid for. Furthermore, "permitted" in the Code does not equate with an employee asking permission to work overtime and then being granted that permission, either expressly or impliedly.

[180] The motion judge accepts the approach in Matson. In doing so, she accepts that "it is the fundamental right of the employer to control its business, including employees' schedules, hours of work and overtime hours" (Fresco v. Canadian Imperial Bank of Commerce, 2009 31177 (ON SC), [2009] O.J. No. 2531, 71 C.P.C. (6th) 97 (S.C.J.) (the "reasons"), at para. 31). While this principle is articulated in the case law, it is subject to the employer's obligations under the Code. Further, the Supreme Court of Canada in Rizzo & Rizzo Shoes Ltd. (Re) (1998), 1998 837 (SCC), 36, O.R. (3d) 418, [1998] 1 S.C.R. 27, [1998] S.C.J. No. 2, at para. 36, has held that the remedial purpose of employment standards legislation demands that it be interpreted in a "broad and generous manner" and that "[a]ny doubt arising from difficulties of language should be resolved in favour of the claimant".

[181] I agree with the motion judge that an employee should not be able to unilaterally determine what work he or she is to get paid for. However, if one accepts that it is the employer's responsibility to supervise and to ensure that overtime is not permitted or if permitted is paid for, there is an argument to be made that a policy that puts the onus on the employee to seek permission before incurring overtime could be considered a policy that is not in accordance with s. 174 of the Code.

[182] The appellant alleges that class members are regularly required to work overtime in their jobs. If this overtime cannot be anticipated in advance then a policy requiring pre- approval will not serve to ensure that it is compensated for. Furthermore, a policy providing for post-approval only in "extenuating" circumstances will also discourage payment for overtime that is regularly incurred. A broad and generous interpretation of s. 174 could, in my view, lead to the conclusion that the CIBC's Overtime Policy is not in accordance with the provisions of the Code. [page695]

[183] In this regard, I disagree with the majority that the decision of Strathy J. in Fulawka v. Bank of Nova Scotia (2010), 101 O.R. (3d) 93, [2010] O.J. No. 716, 2010 ONSC 1148 is distinguishable because it was decided on different evidence and different pleadings. The motion judge in Fulawka disagrees with the motion judge in this case on the question of whether or not it was plain and obvious that an overtime policy with a pre-approval requirement could be seen as not complying with the provisions of s. 174 of the Code.

[184] Fulawka, like this case, concerns bank employees who are subject to an overtime policy that contains a pre-approval requirement. The nature of the duties of the employees of the proposed class in Fulawka is the same as the nature of the duties of part of the proposed class in this case.

[185] In Fulawka, the Bank of Nova Scotia did not concede that s. 174 was an implied term of the employment contract between it and the proposed class members. In this case, CIBC had made that concession. Thus, in Fulawka, the question of the legality of an overtime policy that required pre-approval as a basis for compensation was considered in the context of the plaintiff's claim for breach of a duty of good faith and her claim in negligence. The plaintiff asserted that the content of both the duty of good faith and the duty of care are informed by the provisions of the Code, including s. 174. In dealing with this submission, Strathy J. states [at paras. 78, 79 and 81]:

The duty of good faith and fair dealing in the employment relationship is a feature of the contractual relationship and not an independent cause of action. It is not confined to the termination of the relationship and arises from the recognition of the vulnerability of the employee and the importance of work in personal fulfillment and financial security. The employees in this case are in a position of particular vulnerability, as they do not have the protection of a union and they are not members of management. They are responsible for the sale of Scotiabank's products and they are no doubt encouraged to maximize sales. The nature of their work, which requires that they respond to the unpredictable demands of customers, makes the necessity to work overtime a real possibility. The understandable need for managers to control overtime costs and the pre-approval requirement in the policy create institutional impediments to claims for overtime pay. It seems to me that there is, at the very least, an argument that the duty of good faith and fair dealing requires the employer to pay for overtime work necessarily required or permitted by the employer, whether or not the overtime has been approved in advance.

Putting the onus on the employee to obtain pre-approval for overtime does not adequately reflect the realities of the work place. It puts emphasis on protecting the interests of the employer as opposed to protection of the employee, to whom the duty of good faith is owed. The duty of good faith could include taking active measures to ensure that employees are not required or permitted to work overtime in order to perform the usual duties of their employment. [page696] . . . . .

These components of the duty of good faith do not derive from the Code, but their content is informed by the Code. I am satisfied that the claim for breach of the duty of good faith, viewed as part of Scotiabank's contractual duties, discloses a cause of action. (Citations omitted)

[186] While these comments do not expressly state that an overtime policy with a pre-approval requirement could constitute a breach of the Code, I take it that they imply that it is arguable that this is so. Whether or not the argument will ultimately succeed at trial is beside the point for certification purposes; what matters is that this argument is jurisprudentially tenable.

[187] Again, my view on this matter is not changed by the fact that CIBC's policy referred to in the pleadings contains a provision for post-approval in the event of "extenuating" circumstances. No such requirement appears in the Code and the requirement is arguably more restrictive than the Code provides. Furthermore, the requirement continues to put the onus on the employee to justify overtime compensation, instead of recognizing that it is the employer's obligation to ensure that if overtime has been "required or permitted", it must be compensated, regardless of the circumstances.

[188] Finally, the overtime policy that was in effect prior to 2006, the 1993 Policy, made no provision for post-approval of overtime. While this policy was not the focus of the argument before Lax J., it is adverted to in the Statement of Claim (at para. 47) and was in operation during the class period.

Time in lieu

[189] It may well be that in spite of the view expressed by Professor Harry Arthurs (a renowned scholar in labour law), an overtime policy that contains a time in lieu option would not be a violation of the Code if that option were found to confer a more favourable benefit on the employee by giving them a choice.

[190] However, the jurisprudence on the question of whether an overtime policy that contains a time in lieu option can be considered "more favourable" than the benefit provided in the Code also contains statements to the effect that the "favourableness" of such an arrangement must be clear, unequivocal and real. To say that overtime will be compensated by time off when there is no direction from the employer or any real opportunity given to the employee to fully take the time off in lieu of overtime is not a "more favourable" arrangement (ConAgra Grain, Canada v. Beare, [2004] C.L.A.D. No. 140 (Hood), at para. 32). [page697]

[191] In this case, it is contested whether class members have a meaningful opportunity to take their lieu time.

[192] Finally, the 1993 Policy made no provision for the cashing out of unused lieu-time within a reasonable period of time. As both the motion judge and Swinton J. make clear, the cases that have found a time in lieu provision to be lawful are ones where the policy in question contained a "winding up" provision that allows an employee to "cash out" his or her banked overtime at reasonably regular intervals.

Calculation of overtime

[193] I agree with Swinton J.'s analysis of the appellant's argument concerning "standard of hours of work". In fact, in para. 20 of her Statement of Claim, the appellant describes the "requirements of the Code and its regulations" as including the requirement to pay for "hours in excess of 8 hours per day or 40 hours per week". With respect to the argument about "non- productive" hours not factoring into overtime calculations, this issue is not raised in the Statement of Claim. Thus, absent amendments to the Statement of Claim, I would not give effect to this ground of appeal.

Conclusion re issue no. 1

[194] For the foregoing reasons, I find that the motion judge erred when she found that it was plain and obvious that the Overtime Policy was lawful under the Code.

Issue No. 2: Did the Motion Judge Err in Determining there were No Common Issues that Would Significantly Advance the Litigation?

[195] In addressing this question, I am conscious of the fact that appellate courts have repeatedly affirmed that considerable deference should be shown to motion judges rendering class action decisions. Such judges have both specialized legal expertise as designated class proceedings judges and extensive factual knowledge of the proceedings before them by virtue of their case management function under s. 34 of the CPA: see Lefrancois v. Guidant Corp., 2009 76 (ON SCDC), [2009] O.J. No. 36, 245 O.A.C. 213 (Div. Ct.), at paras. 3-6; Peter v. Medtronic Inc., 2008 22910 (ON SCDC), [2008] O.J. No. 1916, 55 C.P.C. (6th) 242 (Div. Ct.), at paras. 2-3.

[196] However, in my view, the motion judge's finding that it was plain and obvious that the respondent's Overtime Policy was lawful drove her reasoning on the common issues analysis, causing her to make an error that warrants intervention by this [page698] court. In my view, she recast the appellant's case as one for individual claims for unpaid overtime and failed to consider the evidence as to systemic policies and practices that would satisfy what the motion judge accepted was a "minimum evidentiary basis" for showing that a common issue exists.

[197] By failing to deal with this evidence, the motion judge failed to appreciate the nature of the claim being made by the appellant, which is that the failure to pay overtime is attributable to systemic circumstances, not individual circumstances. While individual circumstances may also be present (as the motion judge highlighted), this does not negate the evidence of systemic circumstances -- circumstances that helped to create a culture where employees such as the class members were not compensated for the overtime that they worked.

[198] In para. 6 of her reasons, the motion judge summarizes the appellant's position as follows:

Ms. Fresco asserts that there is a common or pervasive or systemic policy, practice or experience of unpaid overtime at CIBC. It is unclear whether she asserts that the allegedly illegal Policy gives rise to this or whether this is advanced independent of the Policy. In either case, it is an assertion of systemic wrongdoing. It is my conclusion that there is no evidentiary foundation for this, but even if there were, this is not a case where questions of systemic wrongdoing can be resolved without examining the individual claims, thereby defeating the purpose of a class action.

[199] With great respect to the motion judge, this characterization of the appellant's claim fails to capture the essence of that claim, which is that CIBC has systemically put in place policies and practices that fail to meet its obligations under the Code. These systemic policies and practices in turn contribute to a situation where overtime that is required to be compensated under the Code is not.

[200] Actions for systemic wrongdoing focus not on individual circumstances, but on an examination of whether common policies, practices or experiences exist. Actions based on systemic wrongdoing in the workplace recognize that systemic policies and practices can create a culture where the risk to an employee of having his or her rights violated is heightened. As the Court of Appeal in Cloud v. Canada (Attorney General) (2004), 2004 45444 (ON CA), 73 O.R. (3d) 401, [2004] O.J. No. 4924 (C.A.), at para. 60, recognizes, this does not mean that every employee will have been harmed by the policy or practice.

[201] It also may mean that a particular employee whose rights are violated may not have been aware at the time of why those rights were violated. Thus, the fact that Ms. Fresco may not have been aware of the specifics of CIBC's overtime policies [page699] does not detract from her ability to assert a claim based on those policies after she does discover them. If this were the case, then a person who has been consistently discriminated against in the workplace and then discovers that there is a written or unwritten policy in existence at that workplace that encourages discrimination could not make an argument that that policy was causally connected to the discrimination that he or she suffered.

[202] In reviewing the motion judge's conclusion that there were no common issues that would significantly advance the litigation, I have kept the following principles in mind: (a) The question of commonality should be approached purposively, in accordance with the CPA's purposes of ensuring access to justice, avoiding fact-finding and legal analysis duplication and promoting behaviour modification. As put by McLachlin C.J.C., "it is essential therefore that courts not take an overly restrictive approach to the legislation, but rather interpret the Act in a way that gives full effect to the benefits foreseen by the drafters" (Hollick v. Toronto (City), supra, at para. 15; see, also, Western Canadian Shopping Centres Inc. v. Dutton, 2001 SCC 46, [2001] 2 S.C.R. 534, [2000] S.C.J. No. 63, at para. 39). (b) For an issue to be "common", it must be demonstrated that its resolution is a necessary ingredient to each class member's claim (Hollick, supra, at para. 18). However, it is not "necessary that common issues predominate over non- common issues or that the resolution of the common issues would be determinative of each class member's claim" (Western Canadian Shopping Centres, supra, at para. 39). An issue can constitute a substantial ingredient of each claim "even if it makes up a very limited aspect of the liability question and even though many individual issues remain to be decided after its resolution" (Cloud, supra, at para. 53). (c) The task "posed by s. 5(1)(c) is to test whether there are aspects of the case that meet the commonality requirement rather than to elucidate the various individual issues which may remain after the common trial" (Cloud, supra, at para. 53). (d) "[T]he certification stage is decidedly not meant to be a test of the merits of the action . . . The question at the certification stage is not whether the claim is likely to succeed, but whether the suit is appropriately prosecuted as a class action . . . " (Hollick, supra, at para. 16). [page700] (e) On a certification motion, the plaintiff has been described as having a "very weak evidential burden". He or she is only required to adduce "some evidence" or to establish that there is "some basis in fact" for the assertion that "the claims of the proposed class raise common issues" (Hollick, supra, at para. 25; LeFrancois v. Guidant Corp., [2009] O.J. No. 2481, 2009 30448 (S.C.J.), at para. 13). This standard is far less onerous than the ordinary standard of proof on a balance of probabilities applicable at trial, and after the plaintiff has had the opportunity to discover evidence in the defendant's possession.

[203] The appellant is alleging that CIBC's systemic policies and practices with respect to overtime compensation act to unlawfully deprive class members of the compensation to which they are entitled. According to the appellant, these policies and practices consist of [the following]: (a) An unlawfully restrictive overtime policy of which pre- approval was an essential component. (b) A failure to institute a system that would ensure that employees record and track all hours of work and lieu time. In particular, full-time employees are allegedly discouraged from recording their actual hours worked and encouraged only to record those overtime hours for which they have received pre-approval. (c) A systemic failure to prevent employees from working hours that CIBC does not intend to compensate. (d) A failure on the part of CIBC to institute practices and procedures to audit or ensure compliance with CIBC's overtime obligations.

[204] The motion judge accepted that CIBC could be liable if "there is some common act or omission committed by CIBC that caused or contributed to the systemic failure to properly compensate overtime" (reasons, at para. 60). However, she found that there was no evidentiary foundation to show a systemic policy, practice or experience of unpaid overtime at CIBC. In doing so, she disregarded and failed to analyze the evidence that the appellant had led on this question. This failure constitutes an error warranting appellate intervention. [page701]

The evidence of systemic practices and policies

An unlawfully restrictive policy

[205] As already detailed, the appellant submits that CIBC's Overtime Policy with its pre-approval requirement is used as a basis for denying overtime that CIBC tacitly permits. As such, the policy systemically acts as a barrier to overtime payment. As put by the appellant, if you tell employees that they will not be paid overtime unless it is pre-approved, employees will not claim for overtime unless it has been pre-approved.

[206] CIBC, on the other hand, takes the position that the Policy clearly stipulates that employees required or permitted to work overtime hours receive overtime pay.

[207] The evidence that the appellant relies on in support of its view that CIBC's Overtime Policy repeatedly conditions overtime entitlement to pre-approval is the following: (a) Under the heading "Roles and Responsibilities" in the 2006 Policy, managers are directed that "if you have not approved the overtime, do not permit employees to work overtime hours". This would appear to be a recognition by CIBC that there is a difference between overtime that is "permitted" and overtime that is "approved" and that the latter is narrower than the former. (b) Until 2006, there were no exceptions to the strict requirement of prior advance approval as a precondition for prepayment. The policy, which was effective as of February 1, 1993, provides: "Employees MUST obtain prior authorization for management before incurring any overtime." (c) While the 2006 Policy makes reference to the post-approval of overtime in "extenuating circumstances", the only form provided by CIBC under the Policy is a form entitled "Overtime Pre-Approval Form". In its evidence, particularly the affidavit of John Silverthorn, sworn May 14, 2008, CIBC states, at para. 74: "CIBC has forms that can be used by employees when requesting approval to work overtime, and after they have worked overtime. These forms include the Overtime Pre-Approval Form and a timesheet (Form 7718)." Thus, the evidence would indicate that CIBC's form for obtaining payment for overtime after the fact is Form 7718, a time sheet. A copy of Form 7718 is attached as an exhibit to Mr. Silverthorn's affidavit. The form allows for the recording of overtime hours, but states on its face "overtime must be pre-approved by your manager". Given this statement, [page702] employees might well conclude that there is no point in recording overtime hours that they have worked, but did not obtain pre- approval for. (d) The 2006 Policy begins with a summary that states: "CIBC provides additional compensation to eligible employees in the form of overtime payment or paid time off in lieu. Overtime may be authorized on an exceptional basis when management reviews and approves that the work or service is essential and that overtime is the most appropriate and cost effective way of doing this work or providing this service" (emphasis added). None of these preconditions are found in the Code provisions regarding payment for overtime. (e) While the 2006 Policy itself provides for post-approval of overtime in extenuating circumstances, none of the materials provided by CIBC that they prepared to explain the Policy make any reference to the possibility of post- approval. These materials include the corporate-wide announcement of the Policy, the Manager Guidelines and the Powerpoint presentation used to "roll out" the Policy. At the same time, the Powerpoint presentation stresses that the new overtime Policy "must be communicated consistently to ensure clear understanding and compliance across the organization".

[208] In my view, this evidence serves to reinforce the appellant's argument that CIBC's Overtime Policy operates to narrow the eligibility requirement for overtime compensation from that mandated by the Code. Again, rather than mandating overtime entitlement for all employees who, despite the absence of approval, have been permitted or required to work overtime, there is some basis in fact to support the appellant's position that the Policy acts to disentitle employees solely on the basis that they have not sought or obtained approval.

[209] The parties obviously join issue on the question of whether the Policy narrows the eligibility requirement for overtime compensation from that mandated by the Code. This issue is common to each of the class member's claim as pleaded. If the approval requirement is, as the appellant claims, unlawful, then all class members have been unlawfully affected because they have been subject to a common unlawful requirement. Similarly, all class members have an interest in ensuring, both retrospectively and prospectively, that their employer applies a lawful policy to them. In this regard, it is important to note that the action does not just seek relief by way of damages. The Statement of Claim also seeks declaratory and injunctive relief. [page703]

[210] I agree that even if the Policy's pre-approval requirement is illegal, this will not, in and of itself, determine the claims for unpaid overtime. However, I do not accept the reasoning of the motion judge that "even if the Policy's pre-approval requirement is illegal, the resolution of this issue will not advance any of the claims for unpaid overtime" (reasons, at para. 56). This statement operates on the assumption that the Policy is not intended to have its stated effect. With all due respect, it seems far more logical to assume the opposite, i.e., that an express policy that limits the availability of overtime payment will limit the payment of overtime to CIBC's employees.

[211] Of course, there is the possibility that, regardless of the wording of the Policy, overtime is always compensated if it has been permitted or required. In fact, this is what CIBC asserts. Thus, there is a need to go on to examine whether there is some basis in fact for the assertion that the Policy does act as a barrier to the payment of overtime.

Evidence as to the effect of the policy

[212] The appellant, Dara Fresco, has been employed with CIBC since April 1998 in a number of different capacities, at different locations, with different branch managers, including as a "roving" teller, head teller and as a personal banker. According to her, tellers are regularly required to prepare their tills or attend meetings in advance of their scheduled shifts, serve customers through their unpaid lunch breaks and after closing time, and complete end of day tasks, including balancing their tills, after the end of their shifts. Head tellers and assistant branch managers have additional duties that usually require them to work at least as much overtime as the longest-working teller, including supervising tellers, distributing cash to tellers before the branch opens and returning cash to the vault after all the tills have been balanced at the end of the paid work day. Sales employees are required to meet specific targets for sales, revenue and client contact. It is often necessary to work overtime to achieve those targets, especially on days when sales employees are required to participate in internal tasks or meetings. Sales employees are often expected to perform duties outside of regular hours, such as meeting with clients at their convenience and participating in after-hours marketing activities.

[213] Ms. Fresco's evidence in this regard was supported by affidavits from other employees in other branches across the country.

[214] According to Ms. Fresco and the others who filed affidavits in support of the claim, while overtime is expected and [page704] often worked, its compensation is discouraged. Pre-approval is hard to get, especially on a regular basis. Employees are not encouraged to record all the hours that they worked. Employees are discouraged from filling in time sheets that record overtime that has not been pre-approved. Performance assessments and reviews discourage the claiming of and payment of overtime. Willingness to work overtime is regarded as a positive factor in performance appraisals and employees are afraid to claim overtime for fear that this will impact adversely on their employment and/or advancement at CIBC. Therefore, while overtime is worked on a regular basis, employees rarely request payment for that overtime.

[215] Included among the evidence is an affidavit from a former branch manager of the CIBC branch where Ms. Fresco works (Mark Hutchinson). He resigned from CIBC to accept another position outside of the financial services sector. He confirmed that there was overtime "inherent" in the class members' positions; that branch managers have no budget for overtime; that employees are unrealistically expected to finish their work during scheduled hours; and that employees are discouraged from claiming overtime. Furthermore, as put by Mr. Hutchinson:

Given that the overtime that arises cannot often be predicted, the requirement of the official policy of "pre- authorization" for overtime is unrealistic, and in most circumstances unworkable. It simply provides Managers and upper management with an excuse for refusing to pay overtime since prior authorization is not often sought, let alone granted. Furthermore, the overtime policy (which I only saw relatively recently as discussed in paragraph 50 below) provides that, for overtime to be paid, extenuating circumstances must exist where advance approval was not obtained. My experience was that the vast majority of overtime worked by me prior to becoming a manager, and by my employees once I became a manager, were not worked in extenuating circumstances.

[216] Prior to being a manager, Mr. Hutchinson worked for CIBC as a personal banker. He deposed that in this capacity it was impossible to meet the bank's revenue targets without working overtime. He also stated that it was made clear to him that overtime was expected if he wished to get ahead and that to claim payment for that overtime could adversely affect his employment with the bank. As put by him, based on his own experience and his observations of others, "unpaid overtime was clearly part of the culture of CIBC".

[217] There is also evidence from CIBC witnesses that with the kind of jobs that front-line employees have it can be difficult to obtain pre-approval for overtime. There is evidence in CIBC's records that time sheets that record overtime that has not been pre-approved are discouraged. There is evidence that branch [page705] managers are not given a budget for overtime compensation. Further, there is evidence in the form of a news release released by CIBC's executive vice- president of human resources on June 6, 2007 (two days after the Statement of Claim in this action was issued) about CIBC's Overtime Policy that states "[t]o be clear, under our policy, where overtime is requested or required by CIBC, overtime is paid" (emphasis added). This statement makes no reference to payment for overtime that is permitted.

[218] The appellant also tendered expert evidence regarding overtime practices in the federally regulated banking sector disclosing that non-managerial bank employees in Canada work substantial amounts of unpaid overtime, and that the incidence of unpaid overtime among bank employees is higher than in most other industries. While I agree with the motion judge that this evidence does not relate specifically to CIBC, given the other evidence before the motion judge, it does serve as some evidence that the problems with overtime payment being put forward by the appellant are part of a pattern within the banking sector.

[219] This evidence is contested by CIBC. CIBC filed far more affidavits than the appellant to support its position that overtime is not usually required and if it is, it is compensated. CIBC also made several attacks on the credibility of the appellant and her witnesses. However, the evidence detailed above remains and does provide some basis in fact to support the proposition that uncompensated overtime is a systemic problem at the CIBC.

[220] If the motion judge considered the appellant's evidence and did not find it persuasive, she went beyond the function that a judge should be performing at the certification stage. The certification motion is not a trial and is not the place to weigh evidence or make findings of credibility. As already noted, "the certification stage is decidely not meant to be a test of the merits of the action" (Hollick, at para. 16; see, also, Cloud, at para. 50). This is an important consideration to keep in mind. If the certification motion takes on the form of a trial, parties would be tempted to file an ever-increasing number of competing affidavits and to conduct lengthy cross- examinations on those affidavits. This, in turn, would drive up the costs of these motions, something that is antithetical to one of the primary purposes of class actions -- access to justice. [page706]

Duty to prevent unpaid overtime -- Proposed common issue 2

[221] Proposed common issue 2 asks the court to determine whether CIBC has a duty (in contract or otherwise) to prevent or not to permit or encourage class members from working overtime hours for which they were not properly compensated or for which CIBC would not pay. If the duty exists, the court is then asked to determine whether the duty was breached.

[222] The motion judge found that she could see no difference between this issue and proposed common issue 5, which has to do with breach of contract. She further found that without some "minimum evidentiary basis" to support a "systemic failure to pay class members for overtime hours worked", there would be no point in certifying this issue as a common issue (reasons, at para. 61).

[223] Given my view, as articulated above, that the motion judge erred in finding that there was no minimum evidentiary basis to support the appellant's assertions regarding a systemic failure to pay class members for overtime worked, I will go on to examine whether this issue is appropriate for certification.

[224] CIBC has admitted that it has a duty "to ensure appropriate compensation" for all hours worked by its employees. However, as the motion judge acknowledged, the fact that a common issue is conceded by the defendant does not mean that the issue cannot be included in a certification order (Bywater v. Toronto Transit Commission, [1998] O.J. No. 4913, 27 C.P.C. (4th) 172 (Gen. Div.)).

[225] The appellant proposes to argue at trial that this duty includes a positive obligation on CIBC to implement effective systemic policies to safeguard their employee's rights. In this regard, the appellant points to the fact that CIBC does not have a single policy, directive or document that explicitly directs class members not to perform unauthorized overtime. Thus, arguably, the absence of formal pre-approval is not an obstacle to performing required overtime work, but merely a mechanism by which CIBC denies payment for it.

[226] As I have already noted, there is support in the jurisprudence for the proposition that if an employer "does not wish employees to work overtime, he must not only order them to stop, but see that they do" (T-Line Services, at para. 30).

[227] To the extent that common issue 2 proposes to assert an independent cause of action, based on an independent duty, separate and apart from the implied or express contractual obligations owed to the class members (including the duty of good faith and fair dealing), I would agree with CIBC that no such [page707] duty exists. I would also agree with the motion judge that this issue overlaps with the issues raised in common issues 4 and 5. However, to the extent that common issue 2 proposes to identify systemic defects in CIBC's overtime policies and practices, the issue is an appropriate one to certify.

Duty to accurately record all hours worked -- Proposed common issue 3

[228] The appellant proposes that there is a common issue regarding CIBC's record-keeping system. In this regard, the motion judge found that "CIBC acknowledges that it has a duty to accurately record all hours worked as an incident of CIBC's contractual obligations to compensate class members for all hours worked and as mandated by ss. 252(2) and 264(a) of the CLC and s. 24 of the Canada Labour Standard Regulations, C.R.C., c. 986" (reasons, at para. 57).

[229] I agree with the motion judge that if the only question to be certified was whether the CIBC had a duty to accurately record all hours worked, that question would not sufficiently advance the litigation to justify certification. However, the common issue proposed by the appellant is not only whether CIBC had the duty, but also whether that duty was breached. Again, in seeking to certify this as an issue the appellant is essentially alleging that CIBC's record-keeping practices systemically contribute to the non-payment of overtime to the class members.

[230] The evidence in support of this issue is the evidence that CIBC has no system in place to ensure that each branch accurately records all of the hours an employee works. Practices vary from branch to branch. In Fulawka, at para. 128, Strathy J. had this to say about Scotiabank's record-keeping practices:

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 record-keeping 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.

[231] The appellant is not asserting that CIBC must have a particular record-keeping practice or that it has no record- keeping practices. What she is asserting is that the record- keeping practices of the Bank contributed to the non-payment of [page708] overtime on a systemic basis. In particular, there was no centralized system in place to ensure that all hours worked were accurately recorded. In fact, as noted by Swinton J., the evidence shows that full-time employees did not fill out time sheets unless they worked other than their normal hours. Thus, if an employee did work overtime he or she was supposed to fill out a time sheet. However, the time sheet form in evidence that was used by the bank (Form 7718) states on its face "overtime must be pre-approved by your manager".

[232] Arguably, systemically, this record-keeping practice creates a problem in that it discourages an employee who has not received pre-approval for the overtime that he or she worked from filling out a time sheet. If you are not going to be paid for the overtime, why bother to fill in the time sheet?

[233] There is also evidence that CIBC discourages class members from recording non-approved overtime, instructing them to record only their regularly scheduled or approved hours. This is confirmed in one case by an e-mail from a branch manager to upper management, in which the branch manager reports having instructed a class member, consistent with CIBC's Overtime Policy, "that overtime would only be considered upon prior approval of management", and thus "her continued completion of time sheets", which included hours not formally approved by management, "would not be necessary" (affidavit of Paul Gasperi, Exhibit "A").

[234] As the motion judge noted, the appellant is not asserting an independent cause of action for the failure to keep accurate records of all hours worked. Rather, she points to CIBC's record-keeping practices as one of the practices that created a systemic barrier to the payment of overtime. A record-keeping practice that ensures the recording of all pre- approved overtime is not the same as a practice that ensures the recording of all hours worked.

[235] Furthermore, the evidence before the motion judge was that the bank had no consistent system or policy applicable to all branches for the tracking of time in lieu or for ensuring that it was "cashed out". There is also evidence that employees are consequently deprived of their lieu-time entitlements.

[236] Thus, in my view, as in Fulawka, there is some evidence on the record to ask whether CIBC breached its acknowledged duty to put systems and policies in place to ensure the recording of all hours worked as mandated by the Code, whether pre-approved or not.

[237] The motion judge found that even if CIBC's Overtime Policy was found to be illegal and even if CIBC was found to [page709] have breached its duties to put systems in place to ensure the accurate recording of all hours worked, this would not advance the claims for unpaid overtime. With respect, I disagree. As put by Stathy J. in Fulawka, at para. 129:

The evidence before me, therefore, provides a basis in fact to ask whether Scotiabank owed duties to the Class to put policies and procedure 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 these duties were breached. The answers to these questions 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.

[238] Thus, the resolution of the common issues will not determine each class member's claim. However, as already noted, this is not fatal to certification as an issue can constitute a substantial ingredient of each claim "even if it makes up a very limited aspect of the liability question and even though many individual issues remain to be decided after its resolution" (Cloud, at para. 53). Moreover, the extent of individual issues outstanding is not a factor in assessing whether the commonality requirement has been met, though it is a consideration in the preferability inquiry (Cloud, at para. 65).

[239] On the question of causation, the motion judge essentially found that there was an absence of causation between CIBC's Overtime Policy and the harms alleged by the appellant. However, at the certification stage, a plaintiff is not required to establish a direct causal connection between an act or omission that is alleged to be unlawful and its consequences. It is for the trial judge, not the motion judge, to decide on the basis of a full record, after discoveries, whether causation has been established. The plaintiff need only adduce some basis in the evidence tending to establish the existence of such a causal link. In this case, as in Cloud, there is an allegation that CIBC owed duties to the class members and that CIBC put in place policies and practices that were applied to all the class members that breached those duties. The question of whether, on an individual basis, those breaches caused harm to particular individuals may well, as in Cloud, have to await the resolution of the common issues trial. I would also note that, in addition to Cloud, the [page710] existence of individual issues of causation and damages did not preclude certification in Bywater, Andersen v. St. Jude Medical Inc. (2003), 2003 5686 (ON SC), 67 O.R. (3d) 136, [2003] O.J. No. 3556 (S.C.J.), leave to appeal refused [2005] O.J. No. 269, [2005] O.T.C. 50 (S.C.J.) and Griffin v. Dell Canada Inc., 2009 3557 (ON SC), [2009] O.J. No. 418, 72 C.P.C. (6th) 158 (S.C.J.).

Duty to implement systems and procedures -- Proposed common issue 3.1

[240] I agree with Swinton J. that this common issue is not distinct from issues 2 and 3.

Breach of contract -- Proposed common issues 4 and 5

[241] The motion judge concluded that the terms of the class members' employment contracts were appropriate issues for certification, but found that the determination of those issues alone would not sufficiently advance the litigation in the absence of evidence of systemic wrongdoings. Given my view as to the motion judge's errors regarding the evidence of systemic wrongdoings, I find that these issues are appropriate for certification. Ultimately, the appellant's cause of action is one that is based in breach of contract.

Unjust enrichment -- Proposed common issue no. 6

[242] The motion judge declined to certify a common issue based on unjust enrichment because of what she found to be a lack of sufficient evidence of systemic wrongdoing. However, she did find that the Statement of Claim properly pleaded this cause of action and this finding is not disputed by CIBC. For the same reasons that I already expressed, it is my view that this claim is suitable for certification.

Limitation periods -- Proposed common issue no. 6.1

[243] I do not propose to comment on this issue except to note that the motion judge did find that she would not have refused to certify the action because of the "potential existence of individual limitation defences if these are pleaded" (reasons, at para. 95).

Remedies and damages

[244] The appellant claims that the following class-wide remedies are appropriate if common issues of liability are resolved in her favour: (i) aggregate damages through ss. 23 and 24 of the CPA; (ii) declaratory relief that CIBC violated the Code; [page711] (iii) injunctive relief; and (iv) aggravated, punitive and exemplary damages.

[245] It is not necessary for the appellant to establish that an aggregate assessment of some or all of the damages is reasonably likely in order for her action to be certified. However, in practice, the argument for certification becomes stronger if an aggregate assessment is a reasonable likelihood in this case. The motion judge also noted that whether there is such an assessment ordered is ultimately determined by the trial judge.

[246] The motion judge concluded that there was no reasonable likelihood that the conditions for an aggregate assessment of damages under s. 24 of the CPA could be met. In doing so, she distinguished the appellant's claim from Markson v. MBNA Canada Bank (2007), 2007 ONCA 334, 85 O.R. (3d) 321, [2007] O.J. No. 1684 (C.A.), leave to appeal refused [2007] S.C.C.A. No. 346, finding, at para. 89, that:

This case does not fit the Markson model. CIBC's liability does not arise from a wrongful act common to the class. There is no causal relationship between the alleged wrong and the harm or potential harm alleged -- namely, that class members were not paid overtime to which they were entitled. To the extent that some employees in some CIBC branches have claims for unpaid overtime, CIBC's failure to compensate them is a breach of the Policy and a breach of contract, but this failure did not cause harm or potential harm anywhere else. The only other basis for class-wide liability is the alleged systemic policy, practice or experience of unpaid overtime, for which there is no evidentiary foundation and which cannot in any event form the basis of a class action because of the need to first determine individual issues. The plaintiff can therefore not satisfy the condition in s. 24(1)(b).

[247] From this, it is clear that the motion judge's view on the question of whether there was any reasonable likelihood that the conditions for an aggregate assessment of damages could be met was driven by her findings with respect to the lack of any common issues on the question of liability. Given my view to the motion judge's errors with respect to her analysis on the liability question, I also disagree with her on the question of whether the appellant's case fits "the Markson model".

[248] Section 24(1) of the CPA sets out the three conditions for an aggregate assessment of damages. The main point of contention between the parties was whether the condition in s. 24(1)(b) is met. The law in Ontario is that the condition in s. 24(1)(b) is satisfied where "potential liability" can be established on a class-wide basis. In Markson, the Court of Appeal found that a uniform contractual term, alleged to be in violation of a federal statute (the Criminal Code, R.S.C. 1985, c. C-46) created "potential liability" to all class members. Notwithstanding that only [page712] some members of the class actually suffered damages, all members of the class were at risk of being charged a criminal interest rate and thus were potential beneficiaries of the declaratory and injunctive relief sought. Furthermore, the Court of Appeal found that s. 23 could be used to calculate a global damages figure and that s. 24 could be used to find a way to distribute the aggregate sum to class member. As put by the court, at para. 49:

It may be that in the result some class members who did not actually suffer damage will receive a share of the award. However, this is exactly the result contemplated by s. 24(2) and (3) because "it would be impractical or inefficient to identify the class members entitled to share in the award."

[249] In this case, the appellant is alleging that CIBC's policies and practices were in violation of a federal statute, the Code, which in turn breached the duties that CIBC owed to its employees to comply with the Code. These violations, in turn, put all class members at risk of not being compensated for overtime that they were entitled to. If this can be established at the common issues trial, then (a) each member of the class may be entitled to declaratory or injunctive relief; and (b) at least some class members will be entitled to a remedy of damages. As in Markson, this establishes CIBC's potential liability to some members of the class, which may in turn warrant an assessment of damages on an aggregate basis.

[250] Also relevant to the Court of Appeal's determination in Markson [at para. 36] was the fact that "the defendant has structured its affairs such that it is practically impossible to determine the extent of the breach". In this case, the appellant's claim is that by failing to ensure the accurate recording of all hours worked and lieu-time entitlements, CIBC has structured its affairs such that it is practically impossible to determine the precise amount of unpaid overtime owing to the class. As in Markson, there is a reasonable likelihood that if the common issues judge finds in favour of the appellant with respect to liability, he or she could decide that ss. 23 and 24 of the CPA should be employed to "provid[ing] a means of avoiding the potentially unconscionable result of a wrong eluding an effective remedy" (Markson, at para. 42). This was the conclusion reached by Strathy J. in Fulawka, where he states, at para. 130:

In addition, if the common issues judge finds that Scotiabank failed to have a proper record-keeping system, and the absence of such records impairs the ability of Class Members to prove their damages, an aggregate assessment of damages using statistical means may well be the only way to fairly compensate Class Members . . . Scotiabank's poor record-keeping practices may require the use of an aggregate assessment to determine the appropriate quantum of damages for Class Members. The lack of records may make it "impractical or inefficient" to use individual assements. [page713]

Conclusion re issue no. 2

[251] For these reasons, I find that the motion judge erred in determining that there were no common issues that would significantly advance the litigation.

Issue No 3: Did the Motion Judge Err in Finding the Wiseman Affidavit Inadmissible?

[252] I would not give effect to this ground of appeal because of the motion judge's view that the affidavit was not properly before the court, given what had been agreed to at an earlier case conference. The appellant disputes the motion judge's views on this question, but I agree with Swinton J. that the motion judge is in the best position to determine this issue as she was the case management judge in this proceeding.

Conclusion

[253] For these reasons, I would allow the appeal, set aside the motion judge's order and substitute an order certifying the action with respect to common issues 1, 2, 3, 4, 5, 6, 7 and 8.

Appeal dismissed.

Schedule A -- List of Proposed Common Issues

The Defendant's Overtime Policies and Recording of Hours Worked

1. Are any parts of the Defendant's Overtime Policies (from February 1, 1993 to the present) unlawful, void or unenforceable for contravening the Canada Labour Code? a. If "yes", which provisions are unlawful, void or unenforceable?

2. Did the Defendant have a duty (in contract or otherwise) to prevent Class Members from working, or a duty not to permit or not to encourage Class Members to work, overtime hours for which they were not properly compensated or for which the Defendant would not pay? a. If "yes", did the Defendant breach that duty?

3. Did the Defendant have a duty (in contract or otherwise) to accurately record and maintain a record of all hours worked by Class Members to ensure that Class Members were appropriately compensated for same? a. If "yes", did the Defendant breach that duty?

3.1. Did the Defendant have a duty (in contract or otherwise) to implement and maintain an effective and reasonable system or procedure which ensured that the duties in Common Issues 2 and 3 were satisfied for all Class Members? a. If "yes", did the Defendant breach that duty? [page714]

Breach of Contract

4. What are the relevant terms (express or implied or otherwise) of the Class Members' contracts of employment with the Defendant respecting: a. Regular and overtime hours of work? b. Recording of the hours worked by Class Members? c. Paid breaks? d. Payment of hours worked by Class Members?

5. Did the Defendant breach any of the foregoing contractual terms?

Unjust Enrichment

6. Was the Defendant enriched by failing to pay Class Members appropriately for all their hours worked? If "yes", a. Did the class suffer a corresponding deprivation? b. Was there no juristic reason for the enrichment?

Limitation Periods

6.1. What statutory limitation periods, if any, apply to the claims of the class?

Remedy & Damages

7. If the answer to any of common issues 1-3 or 5-6 is "yes", what remedies are Class Members entitled to?

8. If the answer to any of common issues 1-3 or 5-6 is "yes", is the Defendant potentially liable on a class-wide basis? If "yes", a. Can damages be assessed on an aggregate basis? If "yes", i. Can aggregate damages be assessed in whole or part on the basis of statistical evidence, including statistical evidence based on random sampling? ii. What is the quantum of aggregate damages owed to Class Members? iii. What is the appropriate method or procedure for distributing the aggregate damages award to Class Members? b. Is the Class entitled to an award of aggravated, exemplary or punitive damages based upon the Defendant's conduct? If "yes", i. Can these damages award be determined on an aggregate basis? c. What is the appropriate method or procedure for distributing any aggregate aggravated, exemplary or punitive damages to Class Members?

Non-Common or Individual Issues, If Any

9. To the extent that the claims of Class Members raise non-common or individual issues, what are the appropriate, most efficient and cost effective procedures for determining same?