Canada: Dead Again: Court Of Appeal Makes Clear That Certification Of Misclassification Overtime Class Actions Remains As Hard As Ever

Last Updated: October 15 2014
Article by Elder Marques and Kosta Kalogiros

Most Read Contributor in Canada, September 2018

Last week, the Ontario Court of Appeal released its decision in Brown v. Canadian Imperial Bank of Commerce, upholding the Divisional Court's decision affirming the dismissal of a certification motion in a proposed "misclassification" overtime class action (previously blogged about in the spring and fall of 2013). The appeal decision is of particular interest as "misclassification" overtime class actions (i.e. class actions alleging that an employer has misclassified employees and managers to avoid overtime pay obligations) were thought, by many observers, to have already been dealt a fatal blow by the Court in its prior decision in McCracken v. Canadian National Railway Company, but a recent certification decision had raised questions about whether that was right.

In Rosen v. BMO Nesbitt Burns, Justice Belobaba certified a "misclassification" class action despite the decision in McCracken and the Divisional Court decision in Brown. The Brown decision was therefore a welcomed opportunity to set the record straight.


The Divisional Court, relying on McCracken, upheld Justice Strathy's denial of certification of a proposed class proceeding against CIBC and CIBC World Markets for allegedly misclassifying various employees in a manner that made them ineligible for overtime pay. The Divisional Court concluded that "the issue of eligibility for overtime for the proposed class members could only be determined on an individual basis," meaning that the Plaintiffs had failed to demonstrate the existence of a common issue as it relates to eligibility for overtime pay. The Divisional Court found no commonality despite efforts by class counsel to alter the scope of the class to exclude any workers exercising supervisory and managerial responsibilities over other employees, as these workers would not be eligible for overtime but might otherwise be captured by the class definition.

The Divisional Court indicated that the "plaintiff's evidence must establish some basis in fact to find that the job functions and duties of class members are sufficiently similar that the misclassification element of the claim... could be resolved without considering the individual circumstances of class members." The Divisional Court further confirmed that the class failed to prove any basis in fact to show that the proposed class members' job functions (even using the amended definition advanced by counsel) were sufficiently similar that eligibility could be decided on a class-wide basis.

Following the Divisional Court's decision, Justice Belobaba rendered his decision in Rosen presenting the Court of Appeal with the opportunity to clarify and reconcile the reasoning in Brown and Rosen,

For a detailed history, please visit our prior blog posts regarding the Divisional Court's decision and the Court of Appeal's decision to grant leave to appeal.

The Decision

The Court of Appeal upheld the Divisional Court's decision and stayed the course on the existing law governing "misclassification" class actions. The Court expressly affirmed that: (a) McCracken remains the controlling authority; and (b) Rosen does not alter the legal landscape described in McCracken.

Before addressing the case before it, the Court took a moment to identify four principles governing the common issue analysis. The Court, after reviewing prior jurisprudence, stated:

I take four principles as germane to the arguments advanced on this appeal:

  • The proposed common issue must be a substantial ingredient of each class member's claim and its resolution must be necessary to the resolution of that claim.
  • A common issue need not dispose of the litigation and can address only limited aspect of the liability question. It is sufficient if the issue is common to all claims and its resolution will advance the litigation for or against the class.
  • Success for one member of the class must mean success for all. All members of the class must benefit from the successful prosecution of the action, although not necessarily to the same extent. The answer to the question raised by the common issue must be capable of extrapolation to each member of the class.
  • A common issue cannot be dependent upon individual findings of fact that have to be made with respect to each claimant.

The Court, revisiting McCracken, then explained that the issue of eligibility for overtime pay could only be certified as a common issue under s. 5(1)(c) of the Class Proceedings Act "if the evidence on the motion demonstrated that the alleged misclassification of the employees as managers/supervisors could be resolved commonly for all employees in the proposed class." The Court found that McCracken "emphasized that the question of commonality had to be determined based on the evidence adduced on the certification motion and depended on whether the "similarity of job duties performed by class members provides the fundamental element of commonality""

The issue under s. 5(1)(c) of the CPA, in the Court's view, is not the question of job similarities at large, but whether the evidence shows that job functions and duties of proposed class members relevant to their eligibility for overtime pay are "sufficiently similar across the proposed class to permit determination of eligibility without addressing the individual circumstances of the proposed class members."

The Court stopped short of concluding that misclassification claims are incapable of certification outright, but the decision will clearly make it hard to advance such claims successfully.  The Court stated:

Clearly, the outcome of most common issue inquiries under s. 5(1)(c) will be evidence-driven. There is no rule that misclassification claims are automatically incapable of raising common issues, just as there is no rule that other kinds of overtime pay claims will inevitably raise common issues.  However, the evidence led by the employer in McCracken is similar in important ways to the evidence led by the [Respondent].  In both cases, the evidence showed a wide variability in the autonomy, duties and responsibilities of employees having the same job title or classification.  The evidence in both cases revealed the same lack of "core commonality" in the functions and duties of those employees included in the proposed class.

To demonstrate that the commonality issue was evidence-driven, the Court reviewed the decision in Rosen and stressed that in that case the certification judge had been satisfied that the evidence adduced at the certification motion revealed that eligibility could be dealt with as a common issue. The Court held that Rosen was of no assistance to the Appellants and "read the motion judge in Rosen as viewing the case before him as somewhat exceptional."  The evidence before the Court in Brown, on the other hand, did not meet the threshold contemplated by the principles in McCracken, justifying the dismissal of the class members' motion.

Although the Appellants also argued that the Divisional Court erred in failing to certify any other common issues, the Court of Appeal was of the view that all other common issues were either incapable of significantly advancing the litigation or dependant on whether or not eligibility could be dealt with as a common issue.


If it was not clear before, the Court of Appeal has confirmed again that misclassification overtime class actions will be difficult to certify.  Certification will require plaintiffs to provide a cogent and compelling evidentiary record demonstrating sufficient similarities across class members' job functions/duties, such that the court can have confidence that the issue of eligibility can be dealt with fairly as a common issue. Cases which meet this threshold are likely going to be exceptional given the variability of job duties and responsibilities that can exist among individual employees that even share formal titles/roles, especially in large organizations.  The decision in Brown suggests that courts should recognize this reality.

Both the actual principles cited and the general tone of the Court's decision suggest  certification in such cases will be a rarity. Employers should nevertheless assume more misclassification overtime class actions will be pursued while class counsel consider creative opportunities to suggest an "exceptional" case.

The Court's decision may also have broader implications outside of the misclassification context in light of the Court's rigorous analysis of the evidence put forth on the issue of commonality. In particular, Brown makes clear that while certification is a threshold analysis, the courts on certification nevertheless have an important duty to consider the evidence carefully, including where evidence may overlap with issues going to the merits of the claim. Further, the four principles identified by the Court as being germane to the common issue analysis will surely be of interest to litigants both inside and outside of the misclassification context.

Case Information

Brown v. Canadian Imperial Bank of Commerce, 2014 ONCA 677

Docket: 57730

Date of Decision: October 6, 2014

To view the original article please click here.

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.

Similar Articles
Relevancy Powered by MondaqAI
In association with
Related Topics
Similar Articles
Relevancy Powered by MondaqAI
Related Articles
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
Registration (you must scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of

To Use you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

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 or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.


The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq 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 of the Content or performance of Mondaq’s Services.


Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions