Canada: Employee Class Actions – Temporary Foreign Workers Class Action Certified In British Columbia

The British Columbia Supreme Court has recently certified a class action by temporary foreign workers who allege that their employer breached its obligations to them and systematically took advantage of their vulnerability.¹

The merits of the allegations are yet to be addressed, but the decision to certify is another example of the willingness of Canadian courts to allow groups of employees to use class proceedings to pursue employment-related claims and to expand the types of employment-related claims that are certifiable as class proceedings.

Background

The representative plaintiff, Herminia Vergara Dominguez, came from the Philippines to work in Canada as a temporary foreign worker. Ms. Dominguez's experience gave rise to a number of complaints. She therefore applied to certify a class proceeding in British Columbia on behalf of herself and 75 other employees who came to Canada under the temporary foreign worker program to work for the defendant.

Ms. Dominguez advanced causes of action in breach of contract (including breach of the duty of good faith and fair dealing in the context of the employment relationship) and breach of fiduciary duty. She also pleaded unjust enrichment and alleged that an agency relationship arose between the defendant and the recruitment company, and that the defendant was thus liable for breaches of contract by the agency.

Ms. Dominguez's primary complaint was that she was given fewer hours than promised. When she complained to her manager, her hours were decreased further. She also alleged that she occasionally worked overtime for which she was not paid, or was paid improperly. According to her contract, the defendant had also agreed to reimburse her for a return airfare, which it did not do. Ms. Dominguez also alleged that she paid improper recruiting fees to an agency acting on behalf of the defendant before she came to Canada. She alleged that the experiences of other class members were consistent with her own.

Class action requirements satisfied

In considering the requirements for certification of a class action in British Columbia, the court found that Ms. Dominguez was an appropriate representative plaintiff for the proposed class.

The court also accepted that the claims gave rise to common issues which were: the correct interpretation of the standard contract terms; the status of the agency relationship between the defendant and the recruitment agency; and whether fiduciary duties arose in the employment relationship between the defendants and the foreign temporary workers.

With respect to both the contract claims, which included claims for an alleged breach of good faith and fair dealing and the fiduciary duty claims, the court noted that both claims were made in the context of the overarching allegation that class members were vulnerable and the defendant had systematically taken advantage of their vulnerability.

While the court accepted that there exists no free-standing or stand-alone duty of good faith, such a duty might be considered to exist in an employment relationship and could be implied with a view to securing the performance of the terms of the contract. In formulating the proposed common issues, the court made it clear that the duty of good faith and fair dealing was to be dealt with strictly within the context of the contractual relationship. In a similar vein, the court found that the breach of fiduciary duty claim could be common because the claim was advanced on the basis of the shared experience of all temporary foreign workers.

Unjust enrichment and systemic defects in monitoring and recording hours could likewise be determined on a group basis. The court also accepted that damages could potentially be assessed on a class-wide basis, finding that aggregate damages and punitive damages were also proper common issues that would advance the litigation.

Class action as the preferable procedure

In considering other avenues available to the proposed class, the court found that even though the Employment Standards Act provides an administrative regime to resolve employment issues, it did not necessarily apply to all of the issues raised and its limitation period was less favourable to the proposed class. Moreover, certification could achieve the behaviour modification objectives of the Class Proceedings Act.

The relatively small class size did not weigh against certification. A class proceeding was the preferable procedure for these litigants because most claims would be of a low dollar value, the litigants had limited resources to pursue the claim, and a class proceeding would allow them to benefit from counsel assistance. The court noted that a class proceeding would be practical and efficient, save judicial resources and provide access to justice.

Conclusion

This decision illustrates the continued use of class proceedings and the expansion of the types of claims that will be found to be amenable as class proceedings. As with any employment-related claims where employees continue to be employed, the case also highlights a complicated feature of this type of litigation, which is that an employer is required to communicate on an ongoing basis with its employees who are potentially part of the proposed class. It appears that in this case, the parties handled continued communications through a consent order, which governed communications and included an express provision that there would not be repercussions against workers who joined the proceedings.

It is important for employers to tread carefully not only in proactively dealing with issues that may lead to class action claims, so as to avoid this type of litigation altogether, but also, if a class action is filed, to ensure that communication issues do not further complicate the ongoing relationship.

Footnotes

^{1 The decision, Dominguez v Northland Properties Corporation, 2012 BCSC 328, can be accessed at http://canlii.ca/t/fqfds}

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