HR’s trial of the century (Editor’s notes)

CIBC lawsuit raises concern about further legal actions

The last thing an HR department needs is company policies not worth the paper they’re written on. After all, diligent HR professionals spend a lot of time and effort drafting policies that protect the company legally and provide a blueprint for best practices to help make organizations employers of choice. But, unfortunately, HR’s best efforts can be thwarted by the inconsistent application of policies by managers throughout an organization.

I’ve heard numerous HR professionals over the years talk about how much time they spend talking managers down from a cliff. Whether it’s explaining, “No, you can’t fire Dave for coming back one minute late from lunch,” or that it’s probably not appropriate to refer to female staff members as “babes,” HR sometimes has its hands full ensuring policies and common sense are followed.

That makes the apparent problems at CIBC, which is facing a potential $600-million class-action lawsuit over unpaid overtime, especially frustrating from an HR perspective. The bank says it had a “clearly defined policy” as to how it compensates employees that “exceed legislative requirements.” I haven’t actually seen a copy of the bank’s policy, but it’s pretty safe to assume an appropriate policy on overtime was in place at an organization of that size and stature. But whether it was being followed by managers at branches across the country is an entirely different question.

At least one bank employee — teller Dara Fresco — thought rules on overtime weren’t being followed. As outlined in the story on page one, she claims she was required to log two to five hours of unpaid overtime every week over the last decade while working at 12 different branches.

That suggests the alleged problem at CIBC is bigger than just some miscommunication between the head office and managers. It’s one thing for a rogue manager to bend the rules, quite another to have the same problem apparently happening at 12 different locations. That’s a systemic disconnect.

There can be a lot of forces tugging at managers from different directions. What an HR policy says might clash with what’s in the manager’s best financial interests. Bonuses and other incentives are often tied to short-term financial performance. And, let’s face it, sometimes good HR policies, as much benefit as they might bring in the long run, can cause some short-term damage. That can be a real disincentive for a manager to play by the rules. If the options are to look the other way and pocket a large bonus or do the right thing and take a personal financial hit, well, that’s a tough spot to put a manager in.

This isn’t to suggest that’s what happened at CIBC, because it’s far too early to speculate what, if anything, has gone wrong when it comes to unpaid overtime. But it demonstrates that well-intentioned company policies can often clash, putting line managers in a situation where they might have an incentive to do the wrong thing.

As the CIBC case unfolds, HR professionals would be wise to pay very close attention. The ramifications of the lawsuit could be very significant, opening up a floodgate of similar claims. At a minimum, HR professionals should start reviewing their organization’s overtime policy to ensure it’s legal and being followed consistently across the board.

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