Denny’s settles foreign worker class action suit

Restaurant chain must pay airfare, agency fees, overtime and shortfall from promised work hours to workers from Philippines
By Sergio Karas
|Canadian Employment Law Today|Last Updated: 06/26/2013

After more than two years of litigation, the British Columbia Supreme Court has approved a settlement of a foreign worker class action against Denny’s Restaurants. This was the first class action proceeding in Canada involving foreign workers.

The foreign workers who constituted the class alleged that, contrary to certain contractual and other obligations, Denny’s failed to provide them with the amount of work promised in their contracts, failed to pay them overtime, and failed to reimburse them for recruitment and travel costs, amongst other items. After certification of the class in March 2012, the parties embarked upon a dispute resolution process that resulted in a settlement. Denny’s also began third-party proceedings against its agents in the Philippines who recruited the foreign workers, seeking indemnity to the extent that it may be liable to the foreign workers for travel costs and recruitment fee repayments. That action continues independently.

The class members alleged that despite contracts between them and Denny’s, the restaurant chain failed to provide them with the hours of work agreed upon and, despite British Columbia legislation requiring a certain level of pay for overtime work, Denny’s failed to pay it. In addition, many of the employment contracts stipulated that the foreign workers were not required to pay for any travel or recruitment costs, but nonetheless they were asked to do so by the third parties who acted as the chain’s agents in the Philippines. The cause of action against Denny’s was grounded on breach of contract, breach of fiduciary duty, unjust enrichment, and the fees paid to Denny’s’ recruiters abroad.