On August 20, 2013, Justice Belobaba of the Ontario Superior
Court of Justice (OSCJ) certified a class proceeding involving
misclassification overtime claims by investment advisers of BMO
Nesbitt Burns (Nesbitt Burns). This case reminds employers that
they must continue to consider class action risks in assessing
their compliance with statutory overtime requirements.
The plaintiff claimed that Nesbitt
Burns failed to pay him overtime pay in accordance with the
requirements of the Ontario Employment Standards Act, 2000
(ESA), as he had been incorrectly classified by Nesbitt Burns as
exempt from those requirements. Nesbitt Burns defended the claim on
the basis that the proposed class members (1) were managers and
therefore exempt from the overtime provisions of the ESA, and (2)
had the potential for very high earnings, which provided them with
greater benefits than the overtime pay required by the ESA.
In certifying the action as a class
proceeding, the OSCJ distinguished prior cases which had concluded
that class actions were not an appropriate vehicle for addressing
misclassification overtime claims, as a determination of whether
employees exercised managerial functions required individual
assessment. Notably, Justice Belobaba distinguished the recent
decision of the Divisional Court which upheld a denial of
certification in Brown v. CIBC (Brown), a
proposed class action commenced by analysts and investment advisers
working for CIBC World Markets. The OSCJ held that, unlike in
Brown, the job functions of the proposed class members in
the case before it were sufficiently similar such that eligibility
for overtime pay under the ESA could be decided on a common basis.
The OSCJ also found that the defences articulated by Nesbitt Burns
(the managerial exemption and greater benefit argument) were common
issues that could be determined on a classwide basis.
The OSCJ emphasized that the
certification of the action as a class proceeding was a procedural
matter that had nothing to do with the merits of the dispute.
However, the decision of Justice Belobaba demonstrates that,
despite prior decisions, misclassification overtime class actions
may be permitted to proceed to common issues trials in
circumstances where the proposed class is well defined, with class
members performing substantially similar job duties.
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