Lexpert magazine features articles and columns on developments in legal practice management, deals and lawsuits of interest in Canada, the law and business issues of interest to legal professionals and businesses that purchase legal services.
Issue link: https://digital.carswellmedia.com/i/1511709
10 www.lexpert.ca Special Promotional Feature WHILE EMPLOYMENT-RELATED class proceedings remain a relatively new phenom- enon in Canada, in the United States "wage- and-hour" class actions pose a significant finan- cial risk to employers. In 2019 alone, the top ten 10 wage-and-hour class actions south of the border cost employers nearly US$500 million. 1 In Canada, each province has its own em- ployment standards legislation. As a result, cross-Canada class proceedings have his- torically been limited to federally regulated employers governed by the Canada Labour Code. 2 Recently, two Canadian courts (one in Ontario and another in Alberta) signalled that this may no longer be the case, as they consid- ered when a multi-jurisdictional class proceed- ing may be appropriate under provincial em- ployment standards legislation. is suggests that the financial risk to employers associated with class action proceedings in Canada may increase substantially in the near future. Class actions – in a nutshell A class proceeding is a civil action in which one or more plaintiffs sues a defendant or a group of defendants on behalf of a larger group of peo- ple for the same type of loss. Instead of starting separate lawsuits, a representative plaintiff can pursue the claim on behalf of the class, and the costs of litigation are shared by class members. Class action proceedings must be certified by a court before they will be permitted to continue. Each province has its own criteria for cer- tification. However, generally the following criteria must be met: 1 e pleadings must disclose a cause of action. 2 ere must be an identifiable class of two or more persons. 3 e claims raised by the class members must raise common issues. 4 A class proceeding must be the preferable procedure consistent with a fair and MULTI-JURISDICTION CLASS PROCEEDINGS efficient resolution of the common issues. 5 e representative plaintiff must represent the interests of the class without a conflict of interest. Vacation and holiday pay claims In Cunningham v. RBC Dominion Securities, 3 the Ontario Superior Court certified a proposed class action against RBC Dominion Securities ("RBC") for failure to pay vacation and holiday pay on commission payments to its investment advisors, associates, and assistants, contrary to provincial and territorial employment standards laws across Canada (collectively the "ESA"). 4 Cunningham, the representative plaintiff appointed by the court to represent a class of "several thousand potential class members," headed a team of associates and assistants paid, in part, by commission. ree years af- ter Cunningham retired, she noticed none of her pay stubs referenced vacation pay or pub- lic holiday pay. Under the ESA, an employer is required to pay vacation pay and holiday pay on all "wages," which is generally defined to include commission payments. RBC argued that while it may not have accurately recorded vacation and holiday pay on the pay stubs, it had nonetheless complied with its ESA obligations as evidenced by the fact commission continued to be paid to the employees while they were on vacation or off work for the public holiday. RBC requested that the claim be dismissed at the certifica- tion stage. e court disagreed and certified the proceeding. Significantly, the court relied on earlier case law that supported the position that a class proceeding is the preferred method to adjudicate ESA-related claims for a variety of reasons including access to justice and be- havioural modification of large employers. e court stated: is makes sense. Access to justice is best achieved via a class proceeding in an ESA case because claims may be relatively small, especially those of the partially- commissioned Associates and Assistants. And even where the claims are larger, as in the case of the IAs, they may not be pursued for fear of reprisal. Judicial economy is best achieved when the core liability issues can be litigated and decided, as here, in one proceeding. Behavioural modification — encouraging large financial entities to comply with ESA requirements that were obviously enacted to protect their employees — is a self-evident social benefit and will likely be achieved on the evidence herein. And, in any event, there is no suggestion from the defendant that some other from of proceeding would be preferable. 5 [emphasis added] Employee misclassification claims Class proceedings have also been certified to advance the claims of independent contrac- tors who allege they are, in fact, employees and thus entitled to various employment standards-related benefits. 6 However, a recent decision from Alberta suggests that, unlike a claim for vacation and holiday pay, a misclassification claim may not always be appropriate as a class proceeding. In Virani v. Uber Portier Canada Inc., 7 the Alberta Court of King's Bench rejected a certification application filed by a repre- sentative plaintiff who sought to represent class members in Alberta, Saskatchewan, Manitoba, Nova Scotia, New Brunswick, Newfoundland and Labrador, British Co- lumbia, and Quebec. e court refused to certify the class proceeding on a multi- jurisdictional basis, granting certification in Alberta only. In rejecting a multi-jurisdiction certifica- tion, the court noted that there were a variety of factors and different relationships between the individual class members and the defen- dant, each of which had to be considered when assessing damages, including the degree of con- trol exercised by the defendant, the economic dependency of each individual, and whether the trappings of entrepreneurship were pres- ent such as providing one's own tools, the THE NEW FRONTIER IN EMPLOYMENT LAW