Canada: Justice Belobaba Certifies Ontario’s First "Misclassification" Overtime Class Action

Last Updated: August 28 2013
Article by Ranjan K. Agarwal, Amanda C. McLachlan and Jason Woycheshyn

In a decision that marks the first of its kind, on August 20, 2013, Justice Belobaba of the Ontario Superior Court of Justice certified a class action alleging that BMO Nesbitt Burns Inc. ("BMO") failed to pay overtime to a group of 1,500 current and former Investment Advisors. The decision in Rosen v BMO Nesbitt Burns Inc. follows on the heels of a tumultuous period in which the Supreme Court of Canada denied leave to appeal certification in two "off-the-clock" overtime cases and the Superior Court of Justice, Divisional Court and the Court of Appeal of Ontario declined to certify two "misclassification" cases, including a case premised on a group of similarly situated employees in Brown v Canadian Imperial Bank of Commerce.

The Action

Despite the significant volume of judicial decisions and commentary in this area in recent months, Rosen is the first "misclassification" case of its kind to be certified in Canada, as well as the first overtime class action to be certified advancing claims under the Employment Standards Act (Ontario). The proposed class in Rosen (much like the proposed class in Brown) is comprised of current and former BMO Investment Advisors, Associate Investment Advisors and Investment Advisor Trainees who claim they were denied overtime pay contrary to the ESA. Class members allege that contrary to their employer's position, they did not properly qualify for one of two exemptions under the ESA from the requirement to pay overtime for employees who have managerial or supervisory duties and employees who receive a "greater benefit".

The ESA contains prescribed exemptions which apply to exempt employers of certain classes of employees from the requirement to compensate employees for overtime hours worked. Although the ESA creates an exemption for real estate brokers and certain types of salespersons who receive all or part of their remuneration in the form of commissions, the exemptions, as currently drafted, do not extend to Investment Advisors.

Identifiable Class & Common Issues

Despite acknowledging the general appropriateness of the misclassification cases for certification (due in part to inherent commonality of employment functions and treatment by the employer) the court in Brown (a case which alleged violations of the Canada Labour Code) ultimately declined to certify the action on behalf of a group of Investment Advisors. Justice Strathy attacked the proposed common issues as "unworkable" and "lacking in commonality" before ultimately concluding that it would be too difficult to make a fair determination as to whether class members performed managerial duties – the critical issue in determining eligibility for overtime on a class wide basis.

Despite the fact that Justice Strathy's decision to deny certification in Brown was rendered on the basis of a group consisting of nearly identical class members, Justice Belobaba differentiated the proposed class before him in Rosen on the basis that it had already specifically excluded Branch Managers, Team Leads and Investment Advisors with managerial or supervisory functions. On that basis, Justice Belobaba concluded the proposed class and common issues were appropriate.

(a) Managerial Exemption

BMO argued that, much like in Brown, individual determinations would be necessary to decide whether specific individuals qualified for an exemption under the ESA on the basis of managerial duties or greater benefit. Despite Justice Strathy's contrary conclusions in Brown, Justice Belobaba was satisfied that because class counsel had expressly excluded positions that are conventionally understood to be supervisory in nature (i.e., Branch Managers and Team Leaders) from the class definition, the remaining members could be viewed as having the same or very similar job functions, sharing a common scope of functions sufficient for the purposes of meeting the threshold imposed by the Class Proceedings Act.

(b) "Greater Benefit" Exemption

Justice Belobaba likewise found the applicability of the greater benefit exemption could properly be determined on a class basis given such an assessment required only an examination of class members' employment agreements. In his view, there was no need to conduct individual assessments "years into the employment relationship". The conditions of each class members' employment agreement upon becoming an Investment Advisor were virtually identical and thus the court concluded the greater benefit exemption could be determined as a common issue.

In concluding his section 5(1)(c) analysis, Justice Belobaba also found that a policy argument advanced by BMO bank that Investment Advisors should be excluded from overtime pay on the basis that their commission based remuneration was inconsistent with overtime compensation and could have a "detrimental impact on the financial services industry at large" applied to all class members equally and thus was "eminently suitable for a common determination".

Preferable Procedure

Citing the Superior Court's findings in Fulawka that misclassification cases would be appropriate for certification where there is a "commonality of the employment functions and common treatment by the employer", Justice Belobaba found the key questions at issue in Rosen could be assessed without examining individual claims, concluding that "success for one does indeed mean success for all". In this particular case, the court viewed a class proceeding as being "generally more effective than individual claims under the ESA", where there are strict time-limits and caps on recovery. Moreover, the court concluded that a class proceeding might also provide class members with the added advantage of anonymity, which could limit employees fears of reprisal from their employer. The fact that individual assessments of damages would have to be conducted if the common issues were resolved in favour of class members was not, in Justice Belobaba's view, sufficient to quash a preferable procedure finding in light of section 6(1) of the CPA.

Justice Belobaba concluded his analysis by noting "the fact that current Nesbitt [Investment Advisors] have not openly complained about being paid overtime, or that they appear to accept the no-overtime reality because they view themselves as entrepreneurs prepared to work long hours to build a book of business from which they will benefit in the long term is irrelevant". Employees are not entitled to opt-out of the protections afforded under the ESA. Certification motions are not determined through a "referendum or polling of class members". Thus, whether or not the Investment Advisors were exempt from the ESA overtime provisions was not a matter of individual choice but a common legal question.


Justice Belobaba's decision to certify the class action in Rosen, in contrast to the decisions of Justice Strathy in Brown and Justice Perell in McCracken v Canadian National Railway Co. denying certification of other misclassification cases, appears to bring Ontario in line with the current approach adopted by U.S. courts, which have generally viewed misclassification cases more favourable than "off-the-clock" cases. It also suggests that class counsel maybe focusing more closely on provincially-regulated employers. Ultimately, the expansion of the scope of overtime claims certified in Ontario suggests prudent employers should carefully review their own overtime and classification policies to ensure they are complying with the statutory minimum requirements under the ESA. This is particularly important for employers of Investment Advisors, many of whom do not sign formal employment agreements and may not necessarily keep "traditional" hours of work. In the face of the court's decision to expand the array of certified overtime class actions into the realm of provincially regulated employers and in light of the close resemblance between the way in which Investment Advisors and other exempted salespersons are compensated, employers will likely be watching with interest to see if the Legislature will take steps to expand the class of prescribed exempt employees under the ESA.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

Ranjan K. Agarwal
Amanda C. McLachlan
Jason Woycheshyn
In association with
Related Video
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Check to state you have read and
agree to our Terms and Conditions

Terms & Conditions and Privacy Statement (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

Use of

You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.


Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.


Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.

Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

If you do not want us to provide your name and email address you may opt out by clicking here .

If you do not wish to receive any future announcements of products and services offered by Mondaq by clicking here .

Information Collection and Use

We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to with “no disclosure” in the subject heading

Mondaq News Alerts

In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.


A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

Log Files

We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.


This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

Surveys & Contests

From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.


If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.


This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to

Correcting/Updating Personal Information

If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to

Notification of Changes

If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

How to contact Mondaq

You can contact us with comments or queries at

If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at and we will use commercially reasonable efforts to determine and correct the problem promptly.