In Sondhi v. Deloitte, Justice Belobaba of the Ontario Superior Court certified a class proceeding alleging that contract lawyers hired to review documents were employees, rather than independent contractors, and were therefore entitled to the benefits provided under the Employment Standards Act, including overtime, vacation, and holiday pay. However, certification was granted on the condition that the class definition was to be amended and the proposed representative plaintiff was to be replaced within 60 days.
Justice Belobaba found that it was sufficient for the plaintiff to establish that there was some basis in fact for the central question in "independent contractor versus employee" cases: Whose business is it? Applying this central question, Justice Belobaba found the plaintiff had established there was some evidence that the Deloitte document reviewers were not carrying on a document review business for themselves, but were being compensated to carry on Deloitte's document review business, the latter being consistent with an employer/employee relationship.
This case is notable in that Justice Belobaba observed that the "factors-focused approach" that often guides the analysis in "independent contractor versus employee" cases is not the only way to establish 'some basis in fact" for proposed common issues, particularly given the changing landscape of employment relationships in Canada and the historic utility of some of the "so-called" key factors being called into question.
It is also notable because it illustrates the Court's willingness to allow plaintiffs to reformulate their case in a significant way in order for it to be certified, which reinforces that defendants face a "moving target" on certification and often are required to respond to proposed class definitions that were not put before the Court by the plaintiffs.
The decision may have broader implications with respect to the document review services that outside providers will offer in the future, and the pricing of such services. If that happens, financial institutions, which are frequent users of such services, may be affected.
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