Thursday, 16 October 2014

Overtime Class Actions - The Certification Saga Continues

With more and more overtime class action cases coming before the courts, there is starting to be some useful guidance for parties on which types of claims will be certified (i.e., allowed to proceed as class actions) and which will not be. 

Recently, the Ontario Court of Appeal released its decision in Brown v. Canadian Imperial Bank of Commerce ("Brown"), in which the Court upheld the decisions of the lower courts to deny certification of the claim. In Brown, the plaintiffs were employees in various job titles who claimed that they had been misclassified as 'managerial', leading the employer to not pay them overtime.  The Ontario Court of Appeal ruled that the Divisional Court had not erred in finding that a determination of whether an employee in a particular role was 'managerial' or not was fact-specific, and required a review of job responsibilities on an individual basis.  Given the need to look at each individual's circumstances, there was not enough commonality to deal with the proposed class as a group.  Therefore, a class action was not the most appropriate means of adjudicating the claims.

This decision follows closely in the footsteps of the Court's previous decision in McCracken v. Canadian National Railway Co., and distinguished the case of Rosen v. BMO Nesbitt Burns Inc., in which a class action was certified.

What Brown demonstrates is that there are essentially two types of overtime claims that may be brought forward as class actions:  so-called 'misclassification' claims; and 'policy' claims.  In the former, employees are ineligible based on the alleged managerial nature of their roles.  Unless there is significant commonality of functions and responsibilities among employees with the same job title, an analysis of whether these employees are properly classified will turn on individual circumstances.  Accordingly, these cases generally have not met the test of "common issues" necessary to be certified as a class action.  Where on the other hand, the claim turns on an employer policy that denies employees overtime pay, irrespective of particular job duties (e.g., based on the fact that they are paid on a commission basis, as in Rosen), the question will turn on the application of the policy across positions and titles, and its compliance with the Employment Standards Act, issues which are much more amenable to determination under the Class Proceedings Act.

It must be noted that the Court of Appeal in Brown expressly found that not all misclassification cases were necessarily doomed, and that not all policy-type claims will necessarily be certified.  The Courts will still be called upon to analyze whether there are sufficient "common issues" to try the claim as a class action.  That being said, it is becoming increasingly clear that the misclassification type claims will generally be harder to certify.

Do you have questions about overtime policies?  Feel free to contact Lance Ceaser for help. 



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