In its recent decision, Brigaitis v. IQT, Inc. (c.o.b. IQT
Solutions), the Ontario Superior Court allowed
a group of terminated employees to join part of a class proceeding
against their former employer, even though many of the employees
had benefitted from orders issued by the Ministry of Labour (the
Ministry) as a result of claims made by certain of the employees
under the Employment Standards Act, 2000(ESA).
On January 2, 2014 Justice Perell certified a class proceeding
by over 520 wrongfully terminated employees against their now
bankrupt employer, IQT Solutions (IQT). The former employees
were terminated without notice and did not receive any pay in lieu
of notice, severance pay or payment for accrued vacation pay owing
to them. In their certification motion, the former employees
alleged that the directors of IQT misappropriated funds for their
personal use and mismanaged company funds when they knew that IQT
was on the eve of insolvency. The class action sought damages for
wrongful dismissal, conspiracy, negligence, inducing breach of
contract, breach of fiduciary duty and oppression under the Business Corporations
The defendants challenged certification in part based on the
fact that over half of the class had already obtained relief under
the ESA and, as such, it was an abuse of process to attempt to
collect twice on the same claim.
Justice Perell held that a class action was an appropriate way
to advance the claims of all of the former employees. In his
judgement he divided the class into three subgroups (1) the former
employees who had filed claims under the ESA and received orders in
their favour from the Ministry; (2) those who did not file claims
under the ESA but nonetheless benefited from the Ministry's
orders;and (3) those who did not file a claim and were not covered
by the orders.
Although many (approximately 75%) of class members were covered
by the Ministry's order, Justice Perell declined to completely
exclude them as members of the class. Rather, having divided the
class into above-mentioned subgroups, he considered whether each
subgroup could seek a remedy under the causes of action advanced by
the former employees.
Firstly, he held that, while the first group of former employees
could not seek an additional remedy for claims that were covered
under the Ministry's orders, the claims for negligence,
conspiracy, inducing breach of contract and oppression were claims
that were not part of the ESA proceeding and thus, all former
employees were permitted to seek a remedy under these causes of
Second, Justice Perell held that those who did not voluntarily
seek compensation under the ESA were not precluded from claiming
wrongful dismissal as part of the class. His rationale was based on
his literal interpretation of Section 97 of ESA, which prohibits an
employee who files a complaint under the ESA for termination or
severance pay from commencing a civil proceeding for wrongful
dismissal. He held that this prohibition against commencing a civil
proceeding only applies to those individuals who actually filed a
claim. However, he further stated that these employees will have
their own trials to determine what they are owed as a result of
their wrongful dismissal claim and will have to return any amount
that they recovered in the ESA proceeding.
Lastly, Justice Perell stated that while, the purpose of Section
97 of the ESA is to prevent employees from filing a complaint under
the ESA and also advancing a civil proceeding on the same basis,
the ESA must not be taken outside of its intended scope associated
with wrongful dismissal.
This decision is another example of a court finding a class
action to be the preferable procedure for claims arising out of a
mass termination of employees even where the common issues trial
will not dispositive of all issues. In this case, it comes against
a backdrop of claims asserted through the mechanisms under the ESA.
Together with the overtime class action cases, this is a further
example of the potential breadth of class action proceedings in the
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Unfortunately, reasonable accommodation for employees in the workplace continues to be the source of significant litigation and even today we continue to see outrageous examples of employers behaving badly.
We are now beginning to see reported cases involving charges and subsequent fines laid against employers for failing to provide information, instruction and supervision to protect a worker from workplace violence.
On October 13, 2016, the Supreme Court of Canada denied leave to appeal an Ontario Court of Appeal decision which ordered an employer to pay a former employee 37 months of salary and benefits following termination.
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