



COURT OF APPEAL FOR ONTARIO

CITATION: Fresco v. Canadian
    Imperial Bank of Commerce, 2012 ONCA 444

DATE: 20120626

DOCKET: C53230

Winkler C.J.O., Lang and Watt JJ.A.

BETWEEN

Dara Fresco

Plaintiff
    (Appellant)

and

Canadian Imperial Bank of Commerce

Defendant (Respondent)

Louis Sokolov, Steven Barrett, David F. OConnor and
    Derek McKay, for the appellant

Patricia D.S. Jackson, Stuart Svonkin, John C. Field and
    Lauri A. Reesor, for the respondent

Heard: November 30 and December 1, 2011

On appeal from the order of the Divisional Court (Justices
    Lee K. Ferrier and Katherine E. Swinton, Justice Harriet E. Sachs dissenting),
    dated September 10, 2010, with reasons reported at 2010 ONSC 4724, 103 O.R.
    (3d) 659, affirming the order of Justice Joan L. Lax of the Superior Court of
    Justice, dated June 18, 2009, with reasons reported at (2009), 84 C.C.E.L. (3d)
    161.

Table of Contents

A.

INTRODUCTION
.
3

B.

FACTS
.
5

(1)

Overview
    of the Proposed Class Proceeding
.
5

(2)

CIBCs
    Overtime Policies During the Class Period
.
7

C.

THE
    MOTION JUDGES REASONS
.
10

(1)

Section
    5(1)(a): Do the Pleadings Disclose a Cause of Action?
.
12

(2)

Sections
    5(1)(b): Identifiable Class
.
14

(3)

Section
    5(1)(c): Common Issues
.
15

(4)

Section
    5(1)(d): Preferable Procedure
.
19

(5)

Section
    5(1)(e): Representative Plaintiff and the Litigation Plan
.
19

D.

REASONS
    OF THE DIVISIONAL COURT
.
20

(1)

Majority
.
20

(2)

Dissent

23

E.

ISSUES
    ON APPEAL
.
26

F.

ANALYSIS
.
28

(1)

The
    Courts Below Erred in Determining it is Plain and Obvious that CIBCs Overtime
    Policy Complies with the
Code
.
28

(2)

Common
    Issues
.
36

(i)

The
    appellants evidence on the certification motion
.
37

(ii)

CIBCs
    evidence on the certification motion
.
40

(iii)

Common
    issues 2, 3, 5 and 6 could be resolved on a class-wide  basis

42

(iv)

Common
    issues that should not be certified
.
47

G.

CONCLUSION
    AND DISPOSITION
.
48

APPENDIX
.
50

Winkler
    C.J.O.:

A.

INTRODUCTION

[1]

These reasons are released concurrently with those in
Fulawka v.
    Bank of Nova Scotia
,
2012
    ONCA 443, and
McCracken v. Canadian National Railway
, 2012 ONCA 445.
    All three cases involve class actions initiated by employees seeking unpaid
    overtime from employers that are subject to the
Canada Labour Code
,
    R.S.C. 1985, c. L-2 (
Code
). The reasons in
Fulawka
provide
    an overview of the three class actions, at paras. 2-14.

[2]

The present action was started by the putative representative plaintiff,
    Dara Fresco (plaintiff or appellant), on behalf of some 31,000 customer
    service employees of the defendant, Canadian Imperial Bank of Commerce
    (respondent or CIBC). The pleadings allege that CIBC breached its contractual
    and statutory duties to pay class members for overtime work that they are
    routinely required or permitted to perform in order to complete the common
    duties of their positions.

[3]

The pleadings refer to the requirement in CIBCs current overtime policy
    that employees must obtain management approval of overtime hours in advance of
    working overtime, or as soon as possible thereafter in extenuating
    circumstances. This pre-approval requirement is alleged to expressly place
    barriers to class members claims for overtime in violation of
the
Code
.
    In this regard, the appellant pleads and relies on s. 174 of the
Code
, which
states:

174. When an employee is
required or permitted
to work in excess of the standard hours of work [standard hours of work are
    defined in s. 169 of the
Code
as eight hours in a day and 40 hours in
    a week], the employee shall  be paid for the overtime at a rate of wages not
    less than one and one-half times his regular rate of wages. [Emphasis added.]

[4]

The motion judge denied the motion for certification. She concluded that
    the appellant failed to satisfy the common issues requirement in s. 5(1)(c) of
    the
Class Proceedings Act, 1992
, S.O. 1992, c. 6 (
CPA
). The
    motion judge found that the cornerstone of the appellants claim is the
    allegation that the pre-approval requirement in CIBCs overtime policy is
    illegal. According to the motion judge, it is plain and obvious that the
    pre-approval requirement is not illegal. She also concluded that even if the
    pre-approval requirement is illegal, the resolution of that issue would not
    advance the class members individualized claims for unpaid overtime. The
    motion judge found that the proposed class action otherwise meets the
    requirements for certification.

[5]

In reasons by Swinton J., a majority of the Divisional Court agreed
    with the motion judges analysis of the criteria for certification and upheld
    the order denying certification. In a detailed dissent, Sachs J. explained why
    she would have certified the action.

[6]

The relevant provisions of the
Code
are set out in the
    companion reasons in
Fulawka
, at paras. 32-37, and are not repeated
    here. However, to explain why I would allow this appeal, it is necessary to
    briefly describe the factual background of the proposed class action and to
    summarize the reasons of the motion judge, the majority of the Divisional Court,
    and the dissent. The principles of analysis as explained in
Fulawka
are then applied
to this case. Applying
    these principles leads me to conclude that the appeal should be allowed and
    that an order should be granted certifying the action.

B.

FACTS

(1)

Overview
    of the Proposed Class Proceeding

[7]

The appellant has been employed by CIBC since 1998 and has worked in a
    number of different branches. She has worked variously as a customer service representative
    (CSR) or teller, as a head CSR, and as a personal banking assistant. She is
    currently a full-time head CSR.

[8]

The appellant commenced this action on behalf of a proposed class of
    over 31,000 CSRs and other front-line customer service employees working in CIBCs
    more than 1,000 retail branches located across Canada from February 1, 1993
    onwards.
[1]
Class members are non-unionized and non-managerial employees. They include
    full-time and part-time employees who worked as CSRs, assistant branch
    managers, financial service representatives, financial service associates and branch
    ambassadors.

[9]

On behalf of the class, Ms. Fresco seeks $500 million in general damages
    and $100 million in punitive, aggravated and exemplary damages. She also requests
    multiple forms of declaratory and injunctive relief, including a declaration
    that CIBCs overtime policy is unlawful and unenforceable to the extent that it
    requires or permits class members to work overtime hours for which they will
    not be paid, contrary to the
Code
. She further seeks an order
    directing CIBC to comply with the
Code
by: i) accurately recording all
    hours worked by class members; and ii) paying them for all hours worked beyond
    their agreed upon standard hours
[2]
at a rate of 1.5 times their normal hourly rate, or alternatively, at their
    regular hourly rate up to 40 hours per week or eight hours per day and at time
    and a half thereafter.

[10]

The
    plaintiff alleges that there are four systemic deficiencies in CIBCs overtime
    compensation system:

(1)

CIBCs overtime policy and
    practice unlawfully restricts overtime compensation;

(2)

CIBC discourages class members
    from claiming overtime to which they are entitled;

(3)

CIBC fails to record the overtime
    hours that class members work; and

(4)

CIBC fails to ensure that class
    members are prevented from working overtime that CIBC does not intend to
    compensate.

(2)

CIBCs
    Overtime Policies During the Class Period

[11]

In
    the statement of claim, the appellant relies on CIBCs current overtime policy,
    titled Employee Overtime Policy (Canada), which came into effect on April 10,
    2006 (Current Policy). The Current Policy was introduced following CIBCs
    review of its overtime pay practices in Canada and was intended to update
    corporate overtime practices to ensure consistency in branches across the
    country.

[12]

The
    Current Policy contains the following summary:

CIBC is committed to creating an environment where all
    employees across the organization are compensated equitably and according to
    market practices and Canadian legislation. We recognize that from time to time,
    management may require employees to work beyond regular hours of work and in
    those cases, 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 involved is essential, and that overtime is the most appropriate and
    cost effective way of doing this work or providing this service.

[13]

The
    Current Policy defines overtime as follows:

For the purposes of this Policy, overtime is defined as
    pre-approved and authorized time worked by an employee in excess of 8 hours in
    a day or 37.5 hours in a week... and for which the employee may be entitled to
    compensation pursuant to their terms of employment, or by law.

[14]

The
    Current Policy defines employees eligible for overtime pay as those who
    received approval to work more than 8 hours a day or more than 37.5 hours per
    week. This policy includes the following requirement for receiving overtime
    compensation (pre-approval requirement):

PRE-APPROVAL REQUIRED

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.
Attached to this policy is the form to be submitted
    to request approval for overtime hours. [Emphasis in original.]

[15]

The
    form for requesting approval of overtime hours is titled Overtime Pre-Approval
    Form. It does not refer to obtaining after-the-fact approval for overtime
    already worked. The form states that [i]t is the employees responsibility to
    ensure pre-approval is obtained prior to working in excess of 8 hours per day
    or 37.5 hours per week.

[16]

The
    Current Policy also provides that employees may request time
in lieu
of overtime pay, calculated at 1.5 hours off for every hour of overtime worked.
    The decision to grant
lieu
time is at the managers discretion, but a
    manager cannot require an employee to choose this option. If the time
in
    lieu
is not taken within 90 days of the overtime worked, the employee must
    be paid instead.

[17]

Also
    effective April 10, 2006, CIBC implemented guidelines for managers regarding
    its Current Policy, titled Overtime Policy (Canada) Manager Guidelines
    (Guidelines). The Guidelines state:

Management Pre-Approval
 employees must receive written
    management approval in advance of the overtime being worked. Managers should
    not permit employees to work overtime hours if they have not been approved.

The Guidelines also inform managers that overtime
    should only be authorized on an exceptional basis.

[18]

CIBC
    had a previous overtime policy (Former Policy), effective February 1, 1993,
    which was in place for the first 13 years of the class period. The statement of
    claim does not explicitly reference or describe the Former Policy. However, the
    pleadings refer to CIBCs former overtime policy, that allowed CIBC in its
    discretion to refuse to approve overtime after it was claimed. The pleadings
    assert that this policy was unlawful.
[3]


[19]

The
    Former Policy states:

All employees in levels 1-5 under the new Job Grading System,
    will be entitled to overtime payment at the rate of 1.5 times regular salary
    for any time worked in excess of 8 hours per day or 37.5 hours per week.

Note:
Employees MUST obtain prior authorization from management before incurring any
    overtime.

Like the Current Policy, the Former Policy permitted
    employees to request time off
in lieu
of overtime pay. The Former
    Policy states: Time off
in lieu
of payment should be for reasonable amounts and taken within 3 months of the
    occurrence.

[20]

An
    attachment to the Former Policy sets out a list of questions and answers to
    assist managers in responding to employees questions about the terms of the
    policy. In response to the posed question  Will I get paid for the overtime I
    work?  the attachment states:

Payment of overtime to non-managerial employees who work more
    than 8 hours a day is a requirement under the Canada Labour Code. Time off in
    lieu of overtime may be granted but should be utilized ONLY for occasional
    overtime and the time off should be taken within 3 months of the occurrence. Prior
    to incurring overtime, employees MUST ensure they have the approval of their
    supervisor or manager. It is against the law to not pay overtime.

C.

THE MOTION JUDGES REASONS

[21]

On the appellants motion to certify the action as a class
    proceeding, she submitted a list of nine proposed common issues: see the appendix
    to these reasons. In support of the motion, she
filed
    affidavit evidence from herself and 12 other past and present employees of CIBC
    who had worked in branches in all regions. Three of the affiants refused to be
    cross-examined and so their evidence was not considered. The evidence adduced
    by the appellant was intended to establish the routine nature of overtime work
    for customer service employees and CIBCs systemic failure to compensate such
    work.

[22]

The
    appellant also tendered an affidavit from one of her lawyers summarizing the
    responses of potential class members to a survey concerning CIBCs overtime
    practices. The survey appeared on a website describing the class action and
    advising people who think they meet the class definition to register in order
    to receive more information about the action. The solicitors affidavit indicates
    that 98 per cent of potential class members who registered on the website claim
    to have worked unpaid hours at CIBC.

[23]

The
    motion judge refused to admit the solicitors affidavit both because it was
    filed over CIBCs objection without the courts approval, and because it
    constitutes hearsay evidence and does not meet the tests of necessity and
    reliability (at para. 8).

[24]

The
    appellant also filed expert evidence from Professor Judy Fudge and Dr. Graham
    Lowe regarding overtime practices in federally-regulated industries. This
    evidence indicated that the incidence of unpaid overtime among non-managerial bank
    employees is higher than in most other industries.

[25]

The
    motion judge concluded that this expert evidence does not assist the appellant
    because it does not speak to the particular issue of unpaid overtime at CIBC
    (at paras. 71-77).

[26]

CIBC
    responded with 61 affidavits, many from affiants who had worked with the appellant
    or with other individuals who provided affidavits in support of the motion.
    CIBC also filed affidavits from some of its senior officials and from various
    experts. In the words of the majority of the Divisional Court, at para. 22: 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.

[27]

The
    motion judges reasons concerning the five certification requirements are
    summarized as follows.

(1)

Section
    5(1)(a): Do the Pleadings Disclose a Cause of Action?

[28]

The
    motion judge held, at para. 23, that the statement of claim properly pleads
    causes of action in breach of contract and unjust enrichment. She viewed the contentious
    issue as being whether CIBCs overtime policy is unlawful giving rise to both
    causes of action (at para. 24). She then considered whether the appellants
    claim based on the illegality of the Current Policy discloses a tenable cause
    of action.

[29]

The
    motion judge first assessed the lawfulness of the pre-approval requirement in
    the Current Policy. She found nothing objectionable with the pre-approval
    requirement, as explained at para. 32:

The Policy clearly contemplates that an employee unable to
    complete his/her assigned work during regular hours should discuss it with the
    manager who either must approve the overtime or make other arrangements such
    that the employee does not work overtime. If unapproved (and therefore unpaid)
    overtime is worked, then either it was required or permitted by the manager, in
    which case the failure to pay is a breach of the
CLC
[
Code
]

and of the Policy, or it was not required or permitted, in which case the
    employee has no entitlement to overtime compensation. The fact that unapproved
    overtime was permitted, in breach of the Policy, and was subsequently not paid,
    in breach of the
CLC
, does not make the Policy or its pre-approval
    requirement illegal.

[30]

The
    motion judge concluded, at para. 33, that the appellants real complaint and
    the implication of the evidence that she relies on is not that the Policy is
    illegal, but that the Policy is not being applied at the branch level. She
    held that it is plain and obvious that the pre-approval requirement is not
    unlawful on its face.

[31]

The
    motion judge also considered the legality of the time
in lieu
provision in the Current Policy, even though this provision was not attacked in
    the pleadings. She recognized that the
Code
does not explicitly allow
    for providing time
in lieu
in place of overtime pay. She noted that
    Professor Harry Arthurs, in his report,
Fairness at Work: Federal Labour
    Standards for the 21st Century
(Ottawa: Human Resources and Skills
    Development Canada, 2006), indicates that Part III of the
Code
does
    not authorize a time
in lieu
option. However, the motion judge
    concluded that the option of receiving time
in lieu
is a more
    favourable benefit because it offers employees a choice. She concluded that it
    is therefore plain and obvious that the time
in lieu
provision is sanctioned
    by s. 168(1) of the
Code
, which 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.

[32]

In
    coming to that conclusion, the motion judge commented, at para. 44, on the
    importance of the choice given to the employee to take
lieu
time and
    the
requirement
on the employer
    to cash out unused
lieu
time within 90 days.

(2)

Sections
    5(1)(b): Identifiable Class

[33]

The
    motion judge found that the revised class definition states an identifiable
    class within the meaning of s. 5(1)(b) of the
CPA
. She rejected CIBCs
    argument that because the definition includes class members who have no claim
    for overtime, the definition is fatally over-inclusive. In the motion judges
    view, at para. 49, even if many class members do not have a successful claim
    for overtime, they all have an interest in the resolution of the asserted
    common issues.

(3)

Section
    5(1)(c): Common Issues

[34]

The
    motion judge explained why none of the nine proposed common issues satisfy the
    test for commonality under s. 5(1)(c) of the
CPA
.

[35]

She
    observed, at para. 56, that given her determination that the Current Policy is
    legal on its face, there is no basis in fact for accepting proposed common
    issue 1 regarding whether CIBCs overtime policies from February 1, 1993 to the
    present are unlawful. She went on to say that even if the Policys
    pre-approval requirement is illegal, the resolution of this issue will not
    advance any of the claims for unpaid overtime because the pre-approval
    requirement does not cause the wrongs that are alleged. In her view, [t]he
    legality of the pre-approval requirement does not assist in answering the
    question whether CIBC has liability for unpaid overtime.

[36]

The
    motion judge next considered common issue 3 concerning CIBCs alleged duty to
    accurately record all hours worked by class members. She observed, at para. 57,
    that there is no evidence that CIBC systemically failed to keep records. She
    also concluded that because the plaintiff does not assert any common flaw in
    the recordkeeping, the question of the accuracy of the records is an individual
    one.

[37]

Regarding
    common issue 4, which deals with the terms of the employment contracts of class
    members, CIBC admitted that its duties under the
Code
and the
    applicable regulations to appropriately compensate class members for overtime
    and to record all hours of work are incorporated into class members employment
    contracts. The motion judge found, at para. 59, that the resolution of this
    common issue would not sufficiently advance the litigation without the
    certification of the more contentious liability issues.

[38]

The
    motion judge approached common issues 2, 3.1, 5 and 6 as raising the overriding
    issue of whether there is a systemic policy, practice, or experience of unpaid
    overtime at CIBC. Regarding proposed common issue 2 (duty to prevent class
    members from working overtime for which they would not be compensated) and common
    issue 5 (breach of contract)  which she saw as being indistinguishable issues
     the motion judge found there is no evidentiary foundation to show a systemic
    policy, practice or experience of unpaid overtime at CIBC, thus negating any
    commonality. After considering the affidavits of the appellant, nine class
    members and a branch manager, the motion judge found, 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.

[39]

She
    went on to say, at para. 64, that even if she were wrong in her appreciation of
    the evidence, the individual claims for overtime would need to be resolved in
    order to decide whether there was a systemic failure to pay class members for
    overtime hours worked.

[40]

As
    for common issue 3.1 (whether CIBC has a duty to implement a system to ensure that
    it complies with its duties as alleged in common issues 2 and 3), the motion
    judge concluded that  to the extent this question is distinct from the
    question whether CIBC breached its obligation to properly compensate overtime 
    there is no basis for imposing such a duty on CIBC. In her words, at paras.
    69-70:

There is no factual basis for the existence of any express or
    implied contractual term giving rise to such a duty. CIBCs contractual
    obligation was to properly compensate overtime, not to perform this obligation
    through any particular mechanism. Nor has Ms Fresco shown any basis for some
    non-contractual duty arising at common law or equity. Moreover, she does not
    plead any cause of action in negligence or breach of fiduciary duty as in
Rumley
[
Rumley v. British Columbia,
2001
SCC 69, [2001] 3 S.C.R. 184] or
Cloud
[
Cloud v. Canada (A.G.)
(2004), 73 O.R. (3d) 401 (C.A.)].

Ultimately, the central flaw in the plaintiffs 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 causes
    of action.

[41]

Having
    rejecting proposed common issues 1 to 6, the motion judge commented that the
    acceptability of common issue 6.1 on the applicable statutory limitation
    periods is beside the point (at para. 78).

[42]

Finally,
    according to the motion judge, at para. 81, no certifiable common issue exists regarding
    the requested remedies of declaratory relief and damages. She was of the view
    that a declaration that the Current Policy or its application is unlawful would
    not be a matter of substantial common interest, given that the failure to pay
    overtime compensation was suffered by class members on an individual basis. She
    also concluded that there is no common issue with respect to damages, since an entitlement
    to damages will vary from class member to class member depending on the amount
    of unpaid overtime worked by each.

[43]

The
    motion judge rejected the appellants suggestion that this action is ideally
    suited for an aggregate assessment of damages under ss. 23 and 24 of the
CPA
.
    In her view, this case does not meet the requirement in s. 24(1)(b) for
    conducting an aggregate assessment 
i.e.
, that no questions of fact
    or law other than those relating to the assessment of monetary relief remain to
    be determined in order to establish the amount of the defendants monetary
    liability. She distinguished
Markson v. MBNA Canada Bank
, 2007 ONCA
    334, 85 O.R. (3d) 321, leave to appeal refused, [2007] S.C.C.A. No. 346, for
    the following reasons, at para. 89:

This case does not fit the
Markson

model.
    CIBCs 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, CIBCs 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).

(4)

Section
    5(1)(d): Preferable Procedure

[44]

The
    motion judge concluded that, had she found that there were common issues, she
    would have found a class proceeding to be the preferable procedure for
    resolving those issues, at paras. 92-98. She would not have regarded
    individual hearings as a sufficient barrier in the event an aggregate
    assessment of damages is not available (at para. 96).

(5)

Section
    5(1)(e): Representative Plaintiff and the Litigation Plan

[45]

The
    motion judge was satisfied that the appellant is a suitable representative
    plaintiff, noting, at para. 102, that [t]here is no reason to think that any
    other representative plaintiff would have more in common with the class. She
    observed that the litigation plan, as revised during the hearing, considers how
    the action can be managed in the event that individual damage assessments are
    required. She rejected CIBCs arguments about the unmanageability of such
    assessments.

[46]

In
    the result, the certification motion was dismissed because of the appellants
    failure to meet the commonality requirement.

[47]

In
    separate reasons, the motion judge awarded CIBC $525,000 in costs on a partial
    indemnity basis. The motion judge commented, at para. 18, that: 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.

D.

REASONS OF THE DIVISIONAL COURT

(1)

Majority


[48]

The
    majority of the Divisional Court held that the motion judge did not err in
    concluding that it is plain and obvious that the pre-approval requirement is
    lawful under the
Code.
In the words of the majority, at para. 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.

[49]

The
    majority also agreed with the motion judges determination that the time
in
    lieu
provision in the Current Policy is legal under the
Code
. The
    appellant had argued that the motion judge failed to consider the legality of
    the Former Policy, which does not have a provision permitting employees to cash
    out unused
lieu
time. The majority rejected this argument with the observation,
    at para. 61, that: 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.

[50]

Turning
    to the common issues, the majority agreed with the motion judges conclusion
    that there are no common issues that would significantly advance the
    litigation. The majority emphasized that the pre-approval requirement does not
    cause the wrongs alleged by the appellant. The majority noted, at para. 78,
    that the appellant did not refer in her evidence to CIBCs overtime policy as a
    reason for not claiming overtime, and indeed, she did not know of the Policy
    until December 2006.

[51]

According
    to the majority, the motion judge did not commit a palpable and overriding
    error in finding that there is no basis in fact to support any of the proposed
    common issues. In the majoritys words, at para. 90:

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
    members claim.

[52]

At
    paras. 106-107, the majority explained why, in its view, Strathy J.s decision on
    common issues in
Fulawka
v. Bank of Nova Scotia
,

2010
    ONSC 1148, 101 O.R. (3d) 93, is distinguishable:

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.

In this case, unlike
Fulawka
, the proposed class
    contains employees doing a variety of different functions... 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.

[53]

The
    majority agreed with the motion judge that the proposed common issues
    concerning class-wide remedies do not meet the test for commonality, stating,
    at para. 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 Banks liability or
    potential liability to members of the class for breach of contract or unjust
    enrichment. There 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.

[54]

The
    majority also considered and rejected the appellants remaining objections to
    the motion judges evidentiary rulings (at paras. 133-40) and to the costs
    award (at paras. 141-59).

(2)

Dissent

[55]

The
    dissenting judge gave detailed reasons explaining why she would have overturned
    the motion judges order denying certification. She identified what she
    perceived as two errors in the motion judges reasons warranting appellate
    intervention: i) the motion judge erred in law in holding that it is plain and
    obvious that CIBCs Current Policy is lawful under the
Code
; and ii)
    the motion judge committed a palpable and overriding error of fact in
    overlooking evidence in the record supporting the certification of most of the
    proposed common issues.

[56]

The dissenting judge observed that, in conducting the s.
    5(1)(a) analysis, the motion judge waded into the merits of the question
    whether the Current Policy is unlawful under the
Code

and resolved this debate in favour of
    CIBC.  In so doing, she went beyond her mandated task of deciding whether it is
    plain and obvious that the claim cannot possibly succeed (at para. 166). Given
    the need to interpret employment standards legislation in a broad and generous
    manner, the dissenting judge found that it is not plain and obvious that the
    pre-approval requirement is consistent with s. 174 of the
Code
(at para. 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 CIBCs Overtime Policy is not in
    accordance with the provisions of the
Code
.

[57]

The
    dissenting judge also did not agree that it is plain and obvious based on the
    existing jurisprudence that the time
in lieu
provisions in the Current
    or Former Policy are consistent with the
Code
(at paras. 189-92).

[58]

The
    dissenting judge explained that the motion judges rejection of the proposed
    common issues followed from her erroneous holding that it is plain and obvious
    that the Current Policy is lawful (at para. 196). The premise of legality
    resulted in the motion judge failing to consider the evidence as to systemic
    policies and practices that would satisfy the minimum evidentiary basis of
    showing some basis in fact for the existence of a common issue. The dissent
    accepted that this evidentiary threshold is some basis in fact, citing
Hollick
    v. Toronto (City)
, 2001 SCC 68, [2001] 3 S.C.R. 158, at para. 25, and
Lefrancois
    v. Guidant Corp
., 2009 CanLII 30448 (Ont. S.C.), at para. 13, leave to
    appeal refused, [2009] O.J. No. 4129 (Div. Ct.).

[59]

The
    dissenting judge reviewed in detail the evidentiary support for the alleged
    existence of the systemic practices and policies of CIBC that are said to have unlawfully
    deprived class members of appropriate compensation for overtime (at paras.
    205-42). I refer to some of this evidence in discussing the common issues
    criterion.

[60]

The
    dissent also discussed why she would have certified common issues 7 and 8
    related to remedy and damages. She disagreed with the motion judges conclusion
    that the appellants case for aggregate damages does not fit the 
Markson
model (at para. 247). She found, at para. 249, that the criterion in s.
    24(1)(b) is met because the alleged violations of the
Code
put all
    class members at risk of not being compensated for overtime that they were
    entitled to. If these allegations are proven at trial, then each class member may
    be entitled to declaratory or injunctive relief, and at least some class
    members will be entitled to damages. In addition, the dissent observed, at
    para. 250, that the rationale identified in
Markson
for permitting an
    aggregate assessment of damages also applies in this case, namely, that the
    Defendant has structured its affairs such that it is practically impossible to
    determine the extent of the breach.

[61]

In
    the end, the dissent would have certified all of the proposed common issues
    except for issues 3.1 (duty to implement a system to ensure that the duties in
    common issues 2 and 3 were satisfied), 6.1 (limitation periods) and 9
    (procedures for resolving individual claims).

[62]

Like
    the majority, she would not have given effect to the ground of appeal that the
    motion judge erred in refusing to admit the solicitors affidavit. However, she
    would have found that the expert evidence constitutes some evidence that the
    problems with overtime payment being put forward by the Appellant are part of a
    pattern within the banking sector (at para. 218).

E.

ISSUES ON APPEAL

[63]

The
    appellant raises the following three issues:
[4]

(1)

Did the motion judge and the
    majority of the Divisional Court err in determining that it is plain and
    obvious that CIBCs Current Policy complies with the minimum standards for
    overtime compensation set out in the
Code
?

(2)

Did the motion judge err in
    finding (and the majority in deferring to her findings) that there are no
    common issues that would significantly advance the litigation?

(3)

Did the motion judge err in
    refusing to admit and consider other relevant evidence?

[64]

My
    reasons for deciding the first two issues make it unnecessary to resolve the
    third issue.

[65]

The
    parties agree that the motion judges determination that it is plain and
    obvious that CIBCs overtime policy complies with the
Code
is a
    question of law that is reviewable on a correctness basis.

[66]

The
    parties do not agree on the standard of review that applies to the second issue
    concerning the appropriateness of the common issues. The appellant submits that
    errors with respect to matters central to the proper application of s. 5 of the
CPA
displace the deference usually owed to class action judges, citing
Cassano v. Toronto-Dominion Bank,
2007
    ONCA 781,
87 O.R. (3d) 401, at para. 23, leave to appeal refused,
    [2008] S.C.C.A. No. 15;
Quiznos Canada Restaurant Corp. v. 2038724 Ontario
    Ltd.
, 2010 ONCA 466, 100 O.R. (3d) 721, at para. 37, leave to appeal
    refused, [2010] S.C.C.A. No. 348;
Anderson v. Wilson
(1999), 44 O.R.
    (3d) 673, at para. 12, leave to appeal refused, [1999] S.C.C.A. No. 476; and
Cloud
    v. Canada (A.G.)
(2004), 73 O.R. (3d) 401 (C.A.), at para. 39, leave to
    appeal refused, [2005] S.C.C.A. No. 50.

[67]

In
    contrast, the respondent submits that the motion judges conclusion that the
    appellant failed to meet the commonality requirement under s. 5(1)(c) of the
CPA
is reviewable only for palpable and overriding error, citing
Markson
, at para. 33, and the Divisional Courts decision in
2038724 Ontario Ltd. v. Quiznos Canada Restaurant Corp.
(2009), 96
    O.R. (3d) 252,
at paras. 24-28.


F.

ANALYSIS

[68]

In
    my view, the motion judge committed an error of law in her analysis under s.
    5(1)(a) of the
CPA
warranting
appellate
    intervention
. Furthermore, in conducting the common issues analysis
    under s. 5(1)(c), the motion judge misconceived the appellants action as
    being, in essence, a collection of individual claims for unpaid overtime. As
    the dissenting judge pointed out, the motion judge disregarded the appellants evidence
    showing some basis in fact to support the existence of many of the proposed
    common issues concerning liability. This error in principle displaces the
    substantial deference otherwise owed to certification judges when considering
    the common issues criterion and calls for appellate intervention.

(1)

The Courts Below Erred in
    Determining it is Plain and Obvious that CIBCs Overtime Policy Complies with
    the
Code

[69]

The
    motion judge and the majority of the Divisional Court viewed the appellants
    claims for breach of contract and unjust enrichment as being premised on the
    fundamental allegation that CIBCs Current Policy is unlawful.

They took a merits-based approach in
    concluding that the use of the term required or permitted in s. 174 of the
Code
is consistent with the pre-approval requirement in the Current Policy. The
    motion judges analysis, at para. 29, reflects this observation:

Subsection 169(1) of the
CLC
[
Code
] sets a
    clear limit on hours of work which are not to be exceeded and creates the
    corresponding right of the employer to control the hours of work. Section 174
    of the
CLC
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:
Matson v.
    Great Northern Grain Terminals Ltd.
,
[2005]
    C.L.A.D. No. 401 at para. 32. Subsection 169(1) places the onus and
    responsibility on the employer to ensure that employees do not exceed these
    maximum hours thresholds, unless the exception in section 174 applies. Section
    174 permits employees to exceed the maximum hour thresholds only where the
    employer has required or permitted the overtime work. The very language of the
CLC
therefore contemplates the right to pre-approve overtime. 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.

[70]

I
    recognize that, a
t the common issues trial,
the motion judges view may be found to be the correct interpretation of the
    relevant provisions of the
Code
.
    However,
the time-honoured test that a plaintiff must meet at the
    certification stage under s. 5(1)(a) of the
CPA
is to establish that
    it is not plain and obvious that its action will fail. As McLachlin C.J.
    admonished in
Hollick
, at para. 16, the test is not merits-based:

Thus the certification stage is decidedly not meant to be a
    test of the merits of the action: see
Class Proceedings Act, 1992
, s.
    5(5) (An order certifying a class proceeding is not a determination of the
    merits of the proceeding); see also

Caputo v. Imperial Tobacco Ltd.
(1997), 34 O.R. (3d) 314 (Gen. Div.), at p. 320 (any inquiry into the merits
    of the action will not be relevant on a motion for certification). Rather the
    certification stage focuses on the
form
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... [Underlining
    in original.]

[71]

McLachlin
    C.J. explained, at para. 25, that the s. 5(1)(a) requirement is governed by
    the rule that a pleading should not be struck for failure to disclose a cause
    of action unless it is plain and obvious that no claim exists. Thus, the plaintiff
    is not required to establish that the action will succeed, and the motion judge
    should not entertain that question. Addressing that question digresses into the
    forbidden merits analysis, as explained in
Hollick
.

[72]

I
    agree with Strathy J.s observation in
Fulawka
, at para. 87, that:
    [t]he
Code

s use of
    the term required or permitted is
arguably
inconsistent with a
    pre-approval requirement (emphasis added). By providing that the only overtime
    work that CIBC must compensate is overtime work for which an employee receives formal
    authorization from a manager to perform (whether before or after the fact), the
    Current Policy arguably creates a narrower obligation to pay overtime than that
    found in the required or permitted language of s. 174 of the
Code
.

[73]

The motion judge and the
    majority viewed the pre-approval requirement as allowing CIBC to ensure that class
    members do not exceed the maximum hours of work thresholds imposed by the
Code
. This benign view of the purpose served by the pre-approval
    requirement ignores the factual assertions in the pleadings about the alleged
    reality of the workplace in CIBC retail branches.

[74]

The
    pleadings in this case include the factual allegation that class members are
    consistently required to work additional hours in order to complete the common
    duties of their position. The pleadings also state:

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 ... 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.

[75]

These factual allegations must be taken as proven for
    purposes of the test under s. 5(1)(a) of the
CPA
. If class members
    have routinely been required or permitted to perform overtime work for which
    they were not compensated due to the lack of management pre-approval, or
    because class members have been instructed by management not to record overtime
    hours, then it is not plain and obvious that the breach of contract and unjust
    enrichment claims will fail. For the reasons provided by Strathy J.
, at paras. 78-81 of
Fulawka
, as repeated in this courts reasons in
Fulawka
, at para. 49, it is arguable that the pre-approval
    requirement in CIBCs Current Policy served as an institutional impediment to
    claims for overtime that would otherwise have been compensable under s. 174 of
    the
Code
.

[76]

The
    fact that the Current Policy provides that overtime may be paid if there are

extenuating circumstances and approval is obtained as
    soon as possible afterwards does not necessarily eliminate the inconsistency
    between the terms of the policy and the requirements of the
Code
. This element of the Current Policy recognizes that
    there may be situations where overtime is required or permitted, but not
    formally pre-approved by a manager. However, by limiting the prospect of being
    compensated for such work to situations where there are extenuating
    circumstances and where the employee obtains approval as soon as possible
    thereafter, the Current Policy arguably creates prerequisites to compensation
    that are inconsistent with the requirements of the
Code
and the practical demands of the workplace.


[77]

The
    parties and the courts below referred to various decisions of labour standards
    referees under the
Code
that have interpreted s. 174 in different
    ways. For example, one referee decision interprets permitted in s. 174 as
    putting the onus on employees to seek permission to work overtime: see
Matson
    v. Great Northern Grain Terminals Ltd.
, [2005] C.L.A.D. No. 401 (A.M.S. Melnyk),
    at paras. 32-35. Other referees have said that employers cannot avoid liability
    for overtime by permitting employees to work overtime and then refusing to
    compensate them for such work by requiring prior approval of overtime: see, e.g.,
T-Line Services Ltd. v. Morin
, [1997] C.L.A.D. No. 422 (J.E. Emrich),
    at para. 34;
RSB Logistic Inc. v. Hale
, [1999] C.L.A.D. No. 548 (A.M.
    Wallace), at para. 31; and
Kindersley Transport Ltd. v. Semchyshen
,
    [2002] C.L.A.D. No. 4 (A.M. Wallace), at para. 35.

[78]

The
    motion judge and the majority of the Divisional Court concluded that the latter
    line of cases does not support a conclusion that a pre-approval requirement is
    illegal, but rather these cases turn on their particular facts and on the
    referees findings that the employer had required or tacitly approved overtime
    work in the circumstances: see the motion judges reasons, at paras. 29-30, and
    the majoritys reasons, at para. 50.

[79]

In
    my view, referee decisions interpreting s. 174 of the
Code
are not
    decisive of the issue whether the appellants pleaded claims disclose a
    reasonable cause of action under s. 5(1)(a) of the
CPA
. Even if
    referees had uniformly interpreted a pre-approval requirement as being
    consistent with s. 174 of the
Code
, it would be open to a court to
    conclude that a contrary interpretation is arguable. In any event, to say, as
    did the motion judge, that the authorities relied on by Ms Fresco are
    fact-specific ignores that the appellant has pleaded the existence of facts
    that referees have found trigger the obligation to pay overtime in the absence
    of prior management approval. Thus, the courts below erred in concluding it is
    plain and obvious that the pre-approval requirement complies with the
Code
.

[80]

As
    the motion judge noted, the pleadings only specifically attack the legality of the
    pre-approval requirement in the Current Policy. Nonetheless, she concluded it is
    plain and obvious that the time
in lieu
provision of the Current
    Policy is also lawful. The majority of the Divisional Court agreed with this
    conclusion and further held that the time
in lieu
provision in the
    Former Policy is lawful.

[81]

My
    comments on the impermissible merits-based approach of the courts below apply equally
    to their analysis of the legality of the time
in lieu
provisions. Briefly
    put, for the reasons given by the dissenting judge, at paras. 189-92, it is at
    least arguable that the time
in lieu
provisions in the Current and
    Former Policy do not comply with the
Code
.

[82]

These
    reasons would be sufficient to dispose of the first issue raised by the
    appellant. In my view, the courts below erred in concluding that it is plain
    and obvious that the pre-approval requirement and the time
in lieu
provision  whether in the Current Policy or the Former Policy  comply with
    the
Code
.
[5]
However, I would also add that, contrary to the motion judges view, the
    appellants core claims for breach of contract and unjust enrichment are not
    solely premised on the allegation that CIBCs overtime policies are contrary to
    the
Code
.

[83]

The
    appellant claims that CIBC has breached its contracts of employment with class
    members and its obligation to act in good faith in performing its contracts. In
    support of these claims, the appellant pleads that CIBCs practice of assigning
    routine tasks to class members that cannot be completed without working
    overtime, taken together with reductions in CIBCs workforce by more than 20
    per cent over the past decade, and the direction given to class members to
    prepare time records that do not include overtime worked, result in class
    members being systemically denied overtime compensation for work they are
    required or permitted to perform.

[84]

In
    other words, the appellants claim does not turn exclusively or even primarily on
    the
per se
legality of the Current Policy or the Former Policy. The
    pleadings allege that CIBCs systems for assigning work, recording hours of
    overtime work, and its actual practices for compensating such work, breached
    the terms of class members contracts of employment  including the duty to
    perform these contracts in good faith  and have unjustly enriched CIBC at the
    expense of class members. These systemic elements of the claim give shape to
    the common issues, as discussed next.

(2)

Common
    Issues

[85]

In
    assessing the common issues, the motion judge focused on the personal
    circumstances in which the individual affiants claims for overtime arose.
    Illustrative of this perspective are the following passages from her reasons, at
    para. 63, describing the evidence of the appellant, nine other class members
    and a branch manager:

Ms Frescos own claim is a good example of the individual
    nature of the claims. Her claim would appear to depend on whether or not the
    accommodation that she was given for breast-pumping breaks is properly included
    as hours worked in the calculation of her entitlement to overtime. The claim of
    another class member turns on disputed evidence as to the length of her smoking
    breaks and whether this is to be included as time worked for the purpose of calculating
    overtime entitlement. Still another primarily bases her claim on hours worked
    between 8:00 and 8:30 a.m. in circumstances where she agrees that she arrives
    early at the branch because her husband drops her off on his way to work, but
    CIBC asserts that she was not required to begin work before 8:30 a.m. At least
    two of the affiants were part-time CSRs who on cross-examination acknowledged
    that they did not work overtime hours and that they were paid for all the hours
    they worked. As was the case with a number of other affiants, they mistakenly
    believed that they were entitled to be paid at the overtime rate whenever they
    exceeded their scheduled hours, even if those hours were less than 8 hours in a
    day or 37.5 hours in a week. In my view, this evidence does not provide a
    sufficient basis in fact to show the existence of systemic wrongdoing. What it
    shows is a number of individual circumstances that arise for disparate reasons
    and require individual resolution.

[86]

This
    approach to the analysis of commonality under s. 5(1)(c) is fundamentally
    flawed. The evidentiary inquiry under s. 5(1)(c) of the
CPA
ought not
    to have been focused on whether individual class members actually worked
    overtime for which they were not compensated. Rather, the proper approach under
    s. 5(1)(c) involves asking, as the dissenting judge did, whether there is some
    basis in fact for the appellants allegations that CIBCs bank-wide practices
    and policies prevented class members from receiving overtime compensation in
    accordance with the express or implied terms of their employment contracts.

(i)

The appellants evidence on the certification motion

[87]

The
    dissenting judge summarized the appellants evidence that provides a basis in
    fact to show the existence of systemic practices and policies of CIBC that
    allegedly had the effect of routinely denying overtime compensation: see paras.
    205-18 of her reasons. It is unnecessary to repeat all of that evidence here.

[88]

The
    evidence includes wording from CIBCs Current and Former Policy and the materials
    accompanying these policies. For example, the wording of the Former Policy does
    not provide for any exception to the requirement that employees must obtain prior
    authorization from management before incurring overtime. The Current Policy allows
    for obtaining after-the-fact approval of overtime, but only permits
    compensation for such work in extenuating circumstances where approval is
    obtained as soon as possible afterwards.

[89]

The
    Current Policy refers to obtaining approval of overtime after it is performed.
    However, the forms that class members submit when requesting approval of
    overtime hours only refer to pre-approval of overtime. CIBCs Overtime Pre-Approval
    Form states that it is in accordance with the CIBC Employee Overtime Policy
    (Canada) requiring pre-approval of any overtime worked. CIBCs evidence on the
    motion indicates that employees could also obtain payment for overtime by
    completing time sheets. CIBCs standard form time sheet, filed as an exhibit to
    one of CIBCs affidavits, states: Overtime must be pre-approved by your
    Manager and is paid at time and a half.

[90]

Considering
    that both these forms for requesting overtime compensation specify that overtime
    must be pre-approved, class members may have concluded that there is no point
    in recording overtime hours that they have worked, but did not obtain
    pre-approval for: see the dissenting judges reasons, at para. 207. As found
    by the dissenting judge, at para. 208: 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 Appellants position that the Policy acts to disentitle employees solely on
    the basis that they have not sought or obtained approval.

[91]

The
    dissenting judge next identified evidence that provides some basis in fact for
    the appellants assertion that the pre-approval requirement acted as a barrier
    to the payment of overtime, including the following evidence as summarized at
    para. 214 of her reasons:

According to Ms. Fresco and the others who filed affidavits in
    support of the Claim, while overtime is expected and 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.

[92]

The
    dissenting judge also referred, at para. 215, to an affidavit from Mark
    Hutchinson, a former branch manager of the CIBC branch where Ms. Fresco works,
    who confirmed that overtime is "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. Further, in Mr. Hutchinsons
    words:

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.

(ii)

CIBCs evidence on the certification motion

[93]

At
    the certification motion, CIBC launched a full-scale assault on the evidence
    that the appellant contended provides a basis in fact for the common issues,
    filing almost six times the number of affidavits. CIBC argued that the primary
    effect of this evidence is that it demonstrates there is no basis in fact for common
    issues 2, 3, 5 and 6, concerning whether there is a systemic policy or practice
    of unpaid overtime at CIBC.

[94]

Much
    of CIBCs affidavit evidence indicates that class members usually have
    sufficient time within their regularly scheduled hours to complete all their
    tasks and that overtime work is an unusual occurrence, but that when class
    members work overtime, they are compensated even if the overtime was not
    pre-approved. CIBC also tendered evidence showing that different branches have
    different practices for filling out employees time sheets and for keeping
    track of time
in lieu
. Moreover, CIBC took aim at the credibility of
    some of the evidence adduced by the appellant, particularly that of her former branch
    manager, suggesting his evidence raises serious credibility concerns, noting
    that he is a friend of the appellant.

[95]

I
    would make two points concerning the effect of CIBCs evidence. First, as
    pointed out by the dissenting judge, at para. 217, some of CIBCs evidence
    actually provides a basis in fact for the appellants assertion that there is
    systemic issue of unpaid overtime at CIBC. For example, there is evidence from
    CIBC witnesses that the nature of the work performed by front-line employees
    can make it difficult to obtain pre-approval of overtime. There is also
    evidence in CIBCs records indicating that the practice of submitting time sheets
    that record overtime which was not pre-approved was discouraged.

[96]

Moreover,
    evidence from one of CIBCs witnesses provides some basis in fact for the
    assertion that CIBCs policies and practices are not consistent with its obligations
    under the
Code
, and hence, with its contractual obligations to class
    members. In particular, CIBCs Executive Vice-President Human Resources,
    Jacqueline Moss, sent an email to all employees after this class action was
    commenced. The email states: To be clear, under our policy, where overtime is
    requested or required by CIBC, overtime is paid. The email does not refer to
    compensation for overtime work that is permitted by CIBC, in contrast with the
    language in s. 174 of the
Code
.

[97]

Second,
    as was explained by the dissenting judge, at paras. 219-20, to the extent the
    respondents evidence indicates there is not a systemic problem of unpaid overtime
    at CIBC, this evidence does not serve to negate the existence of the appellants
    competing evidence. Nor does it fall to a court on a motion for certification to
    assess the credibility of a witness. The case law is abundantly clear that the
    certification stage is not meant to be a test of the merits of the action: see
Hollick
, at para. 16.

(iii)

Common issues 2, 3, 5 and 6 could be resolved on a class-wide     basis

[98]

In
    addition to attacking the evidentiary foundation for the existence of a
    systemic policy or practice of unpaid overtime, CIBC maintains  as it did in
    the courts below  that the appellants proposed common issues concerning
    liability are not capable of being resolved on a class-wide basis. For example,
    CIBC argues that its evidence shows that different branches have different
    practices for recording hours of work and time
in lieu
and thus
    proposed common issue 3(a)  asking if CIBC breached an alleged record-keeping
    duty  lacks commonality because individual findings of fact will be required
    to resolve this issue.

[99]

In
Fulawka
, at para. 128, Strathy J. rejected a similar argument by
    Scotiabank. His reasons likewise refute CIBCs contention that the diversity in
    record-keeping practices at CIBC branches means that this proposed common issue
    cannot be determined on a class-wide basis:

Scotiabanks position is that the Plaintiff has failed to
    advance any evidence of a systemic flaw in its recordkeeping practices, and
    because the implementation of those practices was at the branch level, any
    inquiry into how records were kept must be conducted branch-by-branch and
    cannot be resolved on a Class-wide basis. I do not accept this. It amounts to
    Scotiabank saying that its record keeping system was so decentralized, varied
    and idiosyncratic that every claim for overtime must be examined on a
    case-by-case basis. Scotiabank cannot point to its own record keeping failures
    to defeat certification The bank had no consistent corporate policy or system
    applicable to all branches, for the tracking of overtime. It had no system of
    tracking time
in lieu
or of ensuring it was cashed out.  It is
    appropriate to ask whether this was a breach of a duty owed to the Class.

[100]

CIBC also argues
    that there is no basis in fact for the appellants assertion that the unpaid
    overtime claims being advanced by class members could be resolved on a
    class-wide basis. In attempting to foster the impression that the appellants
    case is hopelessly individualized, CIBC points out that each of its branches
    comprises a unique working environment, with each branch having its own branch
    manager, who enjoys significant autonomy. Each branch is said to serve a
    distinct community and clientele. As CIBC put it in its factum: 
For that reason, the experience of employees in each branch 
    including the factors that contribute to whether there is any need for an
    employee to work beyond his or her scheduled hours  is unique to that branch
    and its manager. CIBC also points to a lack of shared experience among the job
    positions held by class members:

Each of those positions has a different purpose, involves different
    activities and different responsibilities, requires different knowledge and
    skills, and involves different types of interactions with clients and other
    staff members.

[101]

In addition, CIBC contends that resolving
    the issue of its liability for unpaid overtime would require individual
    determinations of how many hours were worked by individual class members for
    which compensation was not received (including by way of time
in
    lieu
), and whether those hours
    were required or permitted by CIBC. Such determinations, it is said, would
    require a case-by-case analysis of whether the class member took unpaid breaks,
    or had other time away from work for non-related work purposes. Making these
    determinations would require individual evaluation of the evidence relating to
    each employee.

[102]

The motion judge and the majority of the
    Divisional Court accepted that these differences in the individual experiences
    of class members undermine the existence of a common issue of systemic
    wrongdoing.
In the majoritys words, at para. 90:

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
    members claim.

[103]

In my view,
    these alleged differences in individual class members experiences are not
    relevant to the systemic issues raised by the appellant and do not undercut a
    finding of some basis in fact for the common issues concerning liability. The
    terms and conditions in CIBCs overtime policies governing overtime
    compensation, and the accompanying standard forms that class members submit
    when requesting such compensation, apply to all class members regardless of
    their own particular job responsibilities or job titles. To the extent that the
    policies and record-keeping systems of CIBC are alleged to fall short of CIBCs
    duties to class members, or to constitute a breach of class members contracts
    of employment, these elements of liability can be determined on a class-wide
    basis and do not depend on individual findings of fact.

[104]

Moreover,
    resolving the issue whether CIBC had a duty to implement an overtime system
    that satisfies its obligations under the
Code
, and whether its actual
    system met these obligations, will advance the claim of every class member. As
    Strathy J. put it in
Fulawka
, at para. 127: If a common issues judge
    were to find that there was such a duty [to implement an overtime system that
    satisfies CIBCs obligations under the
Code
] and that Scotiabanks
    system was unfair and unreasonable, the absence of pre-approval would not be a
    defence to an individual overtime claim.

[105]

The resolution
    of proposed common issues 2, 3 and 5 concerning liability will not, as
    presently worded, be determinative of CIBCs liability for monetary relief to
    individual class members. However, as I explained in
Fulawka
, at
    paras. 130-32, the common issues in the present case can be fairly stated on
    the pleadings and evidence in a way that the common issues trial judge might
    find there is an evidentiary basis that could support a conclusion that all
    uncompensated overtime hours were required or permitted by CIBC. It would be
    necessary to add as a subset of common issues 2, 3 and 5 the additional question
    whether CIBC, in breaching its alleged duty to prevent class members from
    working overtime that it did not intend to compensate and its duty to
    accurately record all hours of work, thereby required or permitted all
    uncompensated overtime that was worked by class members. This aspect of the
    common issues is formulated in the companion reasons in
Fulawka
, at
    para. 131.

[106]

Certain of the
    respondents complaints about the lack of commonality do not pertain to the
    proposed common issues concerning liability, but rather pertain to individual
    issues that would arise in assessing the damages of individual class members.
    The fact that individual issues  including whether particular class members
    actually worked uncompensated overtime hours, and if so, how many overtime
    hours they worked  would remain after the common issues trial does not prevent
    a finding of commonality under s. 5(1)(c) of the
CPA
. As was explained
    in
Fulawka
, at paras. 143-44 and 156-58, the
CPA
affords
    ample authority to create procedural mechanisms for resolving individual issues
    concerning damages.

[107]

For these
    reasons, I agree with the dissenting judges view that common issues 2, 3, 4
    and 5 should be certified. These reasons also support the certification of
    common issue 6.

(iv)

Common issues that should not be certified


[108]

The dissenting
    judge refused to certify issues 3.1 (duty to implement a system or procedure to
    implement duties), 6.1 (effect of any limitation periods), and 9 (efficient
    procedures for dealing with individual issues). I agree that these three
    proposed common issues should not be certified. Common issue 3.1 is duplicative
    of common issues 2 and 3 and its resolution would not move the litigation
    forward. The issue of limitation periods is not an ingredient of the class
    members claims, but instead may be relied on by CIBC in its defence. The
    question of how individual issues are best resolved is a procedural matter that
    would follow after the common issues trial.

[109]

Unlike the
    dissenting judge, I would refuse to certify common issue 8(a) concerning an
    aggregate assessment of damages. For the reasons given in
Fulawka
, at
    paras. 110-39, the preconditions in s. 24(1) of the
CPA
for ordering
    an aggregate assessment of monetary relief cannot be satisfied in this case.

[110]

The dissenting
    judge would have certified common issue 1 asking whether any parts of the
    Current Policy are unlawful, void or unenforceable for contravening the
Code
.
    Strathy J. refused to certify a common issue to this effect in
Fulawka.
I would refuse to certify common issue 1 on the basis that its resolution is
    not necessary to the resolution of the class members claims. The appellant
    alleges, and CIBC does not dispute, that its statutory duties to appropriately
    compensate class members for overtime and to record all hours of work are incorporated
    into the terms of the class members employment contracts. The certifiable
    common issues concerning whether CIBC has breached any of its contractual
    duties owed to class members subsume the legality issue posed by common issue
    1.

G.

CONCLUSION AND DISPOSITION

[111]

For these
    reasons, I would allow the appeal from the Divisional Courts order and
    substitute an order certifying the class action. I would certify all of the
    appellants proposed common issues with the exception of common issues 1, 6.1,
    8(a) and 9.

[112]

The parties may
    make brief written submissions on costs, with the appellants submissions to be
    delivered within 10 days of the release of these reasons and the respondents
    to be delivered within 10 days thereafter.

Released: WKW June 26, 2012

W.K. Winkler CJO

I agree, S.E. Lang
    J.A.

I agree David Watt
    J.A.


APPENDIX

Plaintiffs List of Proposed Common Issues

The Defendants Overtime Policies and Recording of Hours
    Worked

1.       Are any
    parts of the Defendants 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?

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 Defendants conduct? If yes,

i. Can these damages award be
    determined on an aggregate basis?

ii. 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?





[1]
The original proposed class definition had no temporal limitation.  The revised
    class definition submitted at the certification motion proposed a class period
    beginning on February 1, 1993: see the motion judges reasons, at para. 47.



[2]
CIBCs Employee Overtime Policy, effective April 2006, states that the
    majority of our full time employees have regular daily work hours of 7.5 hours
    and weekly hours of 37.5 hours. The policy defines overtime as authorized
    time worked by an employee in excess of 8 hours in a day or 37.5 hours in a
    week.



[3]
In oral argument before the Divisional Court, the appellant made it clear that
    she also takes issue with the Former Policy: see reasons of the majority of the
    Divisional Court, at para. 13.



[4]
The appellant and the Law Foundation of Ontario did not pursue an appeal from
    the Divisional Courts order upholding the motion judges costs award in favour
    of the respondent.



[5]
CIBC suggests on this appeal that only the Current Policy was in dispute on the
    certification motion. I do not accept this suggestion. As previously noted, at
    para. 18, the pleadings refer to an earlier overtime policy and allege that it
    was unlawful. In addition, on the certification motion, the appellant submitted
    a revised class definition with a class period starting on the effective date
    of the Former Policy.


