TORONTO - Scotiabank (TSX:BNS) was loose with its record keeping when it came to extra work hours, resulting in many employees working time they weren't being paid for, says a lawyer for a woman who is suing the bank.

Louis Sokolov told an Ontario court during a hearing over class action lawsuit over alleged unpaid overtime that Scotiabank has a duty to record and monitor all of the hours worked by its employees, and compensate them properly.

"This is an organization that keeps track of debits and credits to the penny," he said, implying that he saw no reason why the bank shouldn't be able to accurately monitor work hours.

"There's something of a disconnect between policy on lieu time and the direction on the ground."

None of the allegations have been proven in court.

Sokolov represents Cindy Fulawka, who is heading the lawsuit against the bank for about 5,000 employees working as personal or senior bankers, financial advisers and account managers for small businesses.

The suit, filed two years ago, includes any full-time sales staff who worked at bank's retail operations after 2000.

A lawyer for the bank has refuted the claims and will present his case on Tuesday.

Scotiabank is the second Canadian bank to appear in court after being slapped with a class action suit over unpaid overtime.

In June, the Ontario Superior Court dismissed a similar suit filed by a teller against CIBC (TSX:CM) alleging unpaid overtime to its customer service staff.

The judge in that case decided it didn't meet the test of a class action suit because each employee would have an individual claim that lacked commonality with the others. The teller, Dara Fresco, is appealing the decision.

Sokolov also served as a lawyer for the plaintiff in the CIBC case.

In documents filed with the court, he indirectly addressed the CIBC decision by saying that Scotiabank's system and contracts for overtime policy are all uniform, and should not require an examination of each employee's experience.

"The lack of records, which is in breach of the bank's obligation to keep such records, cannot form the basis of an argument that individual assessments are difficult," the filing said.

Sokolov insisted Scotiabank has a duty to control the hours worked by its employees and cannot just state that it doesn't allow overtime unless employees receive prior approval.

"Scotiabank cannot permit employees to work, and must take reasonable steps to prevent employees from working overtime hours that it does not wish or intend to compensate," the document said.

"An employer cannot refuse to compensate hours that it knows are being worked and does not take adequate steps to prevent or stop."

He also asserted that Scotiabank knew its employees were working unpaid time, and staffed its branches so that staff would be "optimally occupied" during their shift. Very little if any, buffer time was built into the shift to ensure staff had time to complete their work, he added.

"Performance reviews prepared by the bank demonstrate that extra or overtime was known to, and appreciated by, the bank," the documents said.

Sokolov also told the court that his client is one of few Scotiabank branch employees with the ability to make a direct claim against the bank.

He says many Scotiabank workers would not pursue claims against their employer for fear of repercussions. They work for modest wages, are not unionized and have little job security, he added.

Shares in Scotiabank were up 35 cents to $48.82 on the Toronto Stock Exchange.