"When is an overtime misclassification case not a misclassification case?" asked Justice Edward P. Belobaba in Baroch v. Canada Cartage, a recent overtime class action decision. His answer: "When it is framed as a complaint about the systemic policies or practices of the defendant employer."
Ontario has seen a significant development in the case law surrounding overtime class actions in the past several years. In Justice Belobaba’s view, this case law has resulted in a clear delineation of what is certifiable and what is not.
Certification of common issues based on 'systemic' overtime practices
The defendant, Canada Cartage, was a national provider of trucking and other distribution services, subject to the Canada Labour Code, and other federal employment regulations. The plaintiff employee alleged that, as a matter of policy and practice, Canada Cartage lacked a proper overtime policy and did not pay overtime in accordance with the applicable legislation.
In Belobaba’s view, the Baroch action had been "carefully framed" to avoid the pitfalls of proposed overtime class actions that had previously been declared to be individual in nature. In McCracken and Brown, two previous overtime class action decisions of the Ontario Court of Appeal, the central allegation was that employees had been "misclassified." This meant that it would be necessary to consider each individual’s job title, and whether the employer had misclassified them to avoid paying overtime. By contrast, in Fresco and Fulakwa, the employee plaintiff focused on the "systemic" policies or practices of the employer that were alleged to result in unpaid overtime.
In Baroch, the plaintiff employee's counsel did attempt to apply these principles to construct a certifiable class action. Following Fresco and Fulakwa, some of the certified common issues in Baroch were about the employment law contract; the employer’s systemic policy, or lack thereof, in respect of payment of overtime; and about whether there is a duty to have reasonable and effective systems, procedures and/or policies to monitor and record hours worked.
Belobaba also certified a common issue about whether the defendant owed class members a duty of good faith, candour and honesty in respect of its overtime obligations and, if so, whether this duty was breached. This was apparently based on the recent Supreme Court of Canada Decision in Bhasin, which articulated a duty of honesty in contractual performance in the context of an employment agreement.
No certification of the issues of contractual breach or general remedies
The certification judge did not certify the question of breach of employment agreements. Belobaba found that the fact of disregarding overtime obligations would not amount to a breach of the employment agreements. The possibility or risk that a class member may not be paid overtime because of an employer's impugned practice is not a breach of the employment agreement. Rather, a breach is failing to pay overtime that is actually owed, and this determination can only be made on an individual basis. Belobaba also refused to certify a general question that asked what remedies would be available to the class in the event liability was proven on a common issue.
A possible map to certification -- but where does it lead?
While every case turns on its unique facts and the evidence supporting common issues, Ontario's overtime class action jurisprudence -- for now -- provides plaintiffs with a map to certification. The plaintiff employee's counsel, in this case, used this map to frame the case for certification and was successful. However, it is unclear how far certification within the confines of this framework can get a class. As noted by Belobaba, the mere fact of a systemically unfair overtime policy does not equate to damages, it remains to be seen whether an overtime class action certified on the basis of "systemic" practices can effectively be determined in a common issues trial or whether damages can or should be awarded to the entire class. Justice Belobab left those questions open for the trial judge to decide.
Laura Fric is a partner with Osler, Hoskin & Harcourt LLP in Toronto. She can be reached at (416) 862-5899 or email@example.com. Lauren Tomasich is an associate with Osler, Hoskin & Harcourt LLP in Toronto. She can be reached at (416) 862-6434 or firstname.lastname@example.org.
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