Canada: Ontario Divisional Court Endorses "Roadmap" For Overtime Class Actions

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 and 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 overtime.

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 that:

  1. a representative plaintiff is permitted to cast his or her claim to make it most amenable to certification;
  2. 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; and
  3. 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 class members.'"

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 this year:

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 decide.

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.

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