Certification Denied in the Latest Misclassification Overtime Class Action

December 04, 2017

Written By Cheryl M. Woodin, Christiaan A. Jordaan and Joseph N. Blinick

In the latest instalment in a growing wave of employment class actions, the Ontario Superior Court of Justice denied certification of a claim for unpaid overtime wages due to fatal flaws in the plaintiff’s certification material. Nevertheless, as we set out in Looking Forward: Canadian Class Actions in 2018 and discuss below, we still expect to see unpaid overtime and other employment issues being raised in class actions litigation going forward.

The Freeman Decision

In Freeman Bartholomew v Coco Paving Inc. and Lafarge Canada Inc., 2017 ONSC 6014, the plaintiff alleged that the defendants had not paid employees overtime until 55 hours had been worked in a week. Instead, the defendants allegedly misclassified certain employees as “road building workers” who were exempt from the requirement to pay overtime hours worked between 45 and 55 hours.

Although those allegations might seem ripe for a class action, certification was denied because of several deficiencies in the plaintiff’s materials:

• The plaintiff failed to establish the existence of an identifiable class, since there was no evidence that anyone other than the plaintiff himself had been treated the same way. The Court found that the plaintiff’s evidence amounted to a bald assertion, or pure speculation, that such a class existed.
• Even if an identifiable class existed, there was insufficient evidence of common issues. The Court held that the proposed common issues would require an individual analysis of each employee’s terms of employment, day-to-day tasks, supervisory functions and potential status as a union member. On the authority of McCracken v Canadian National Railway Company, 2012 ONCA 445, the Court suggested that the matter would likely require individual trials for virtually each class member and, in such a case, “certification should never be granted.”
• The Court also found that a class action was not the preferable procedure given the availability of alternative avenues of redress, such as individual litigation (through the Small Claims Court or Simplified Procedure) or complaints to the Ministry of Labour.
• Finally, the Court found that the litigation plan put forward by the plaintiff was not a litigation plan at all but, rather, a plan that presumed a settlement and did not contemplate the liability or damages phases.

Implications

The Court’s decision to deny certification is responsive to the circumstances of the case, driven in part by the relatively small size of the putative class (approximately 100 individuals) and the availability of alternative means of redress for the putative class members (although the latter would presumably be available for any overtime case).

While it remains to be seen whether the decision will be appealed, defendants can take comfort in the fact that the court will strictly examine the proposed class definition and common issues to ensure a class proceeding is truly the preferable procedure for dealing with overtime claims. Still, we expect employment class actions to be vigorously pursued against an otherwise employee-friendly backdrop of recent appellate decisions and legislative changes.

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