We have previously discussed that proposed class proceedings
based on alleged denial of overtime will not be certified when
individual issues overwhelm other issues in a case (see
here). However, we have also discussed that this often will not
be case when the representative plaintiff's case is found to be
based on alleged systemic wrongdoing.
Earlier this year,
we discussed how one Ontario Superior Court judge, in Baroch v. Canada Cartage, has given a
"roadmap" to prospective representative plaintiffs
seeking to make their claims amenable to certification. A recent decision of the Ontario Divisional
Court, denying leave to appeal this decision, implicitly endorses
this "roadmap". It is also a helpful reminder of the
threshold a defendant must overcome when seeking leave to appeal a
decision certifying a class action in Ontario.
Background Facts and the Certification Decision
In Baroch, the representative plaintiff alleged that
the defendant lacked a proper overtime policy and did not pay
overtime in accordance with applicable legislation.
Justice Belobaba of the Ontario Superior Court held that the
representative plaintiff had carefully tailored the action to
ensure that the Action would not encounter the same problems that
arose in McCracken and Brown, two previous overtime class
action decisions of the Ontario Court of Appeal. In those cases,
the central allegation was that employees had been
"misclassified" so that the employer could avoid paying
overtime. The problem with this allegation, from the perspective of
a class action, was that too many individual issues arose. It was
necessary to consider each individual's job title and duties,
and whether the employer had misclassified them to avoid paying
overtime. By contrast, in Fresco and Fulakwa, the representative
plaintiffs focused on the alleged "systemic" policies or
practices of the employer that were alleged to result in unpaid
Justice Belobaba held that this case was not a
"misclassification" case, instead focussing on the
"systemic" practices of the employer. The class was
defined to presume that the class members were eligible
for overtime. In this respect, he noted that a representative
plaintiff is entitled to cast his or her claim in such a way to
make the claim most amenable to certification.
The Test for Leave to Appeal
Justice Lederman of the Ontario Divisional Court noted that
leave to appeal a certification decision should be sparingly
granted. To be granted leave, in summary, a defendant must
demonstrate that there is a conflicting decision, that there is
reason to doubt the correctness of the decision, or the proposed
appeal involves matters of importance.
No Conflicting Decision
Justice Lederman found no conflict in the case law. He noted
a representative plaintiff is permitted to cast his or her
claim to make it most amenable to certification;
the fact that a more complex class was present in this case
(more than 50 different job positions with different duties and
responsibilities as opposed to the rather uniform group that
comprised the classes in Fresco and Fulawka) does
not make an overtime class action unamenable to certification;
there was no error in principle in Justice Belobaba's
deciding that "if certain certified common issues were
determined in the plaintiff's favour, 'there is a
reasonable likelihood that the aggregate of the class members'
damage could reliably be determined without proof by individual
Conclusion and Lessons for the Future
Justice Lederman noted that motion judges are entitled to
significant defence and accordingly there was no reason to doubt
the correctness of Justice Belobaba's decision. Given recent
case law from the Supreme Court of Canada and Ontario Court of
Appeal, Justice Lederman also did not find any matter of importance
that warranted granting leave to appeal.
The Baroch case demonstrates representative
plaintiffs' ability to cast a prospective class proceeding in
the manner likeliest to result in certification. Defendants should
be aware of this. However, that does not mean that this area of law
will become a plaintiff's panacea – as we noted earlier
the mere fact of a systemically unfair overtime policy does not
equate to damages [nor does it equate to having no individual
issues in many cases]. It remains to be seen whether an overtime
class action certified on the basis of "systemic"
practices can effectively be determined in a common issues trial or
whether damages can or should be awarded to the entire class.
Justice Belobaba left those questions open for the trial judge to
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guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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