Overtime class action certification order slammed by Court of Appeal

July 4, 2012 Christina Catenacci Employment/Labour Standards, Human Resources, Payroll, Wages and Compensation

Ontario’s Court of Appeal has just decided that the overtime pay claims of a group of front-line supervisors at Canadian National Railway lacked commonality; hence, overturning a lower court decision that had certified a “misclassification” overtime class action against CN. The supervisors claim CN excluded them from overtime pay by calling them “managers” when they were not.

This unsuccessful attempt at certifying an overtime class action was a bit different than the one against the CIBC (which was also unsuccessful based on “misclassification”) dealt with in a previous First Reference Talks post. And very different from the Scotiabank and CIBC overtime class action suits that were certified on June 26, 2012 (login to case commentary required).

In the CN case, section 167(2)(a) of the Canada Labour Code specifically excludes managers from receiving overtime pay. In this case, the question was whether CN systemically misclassified the front-line supervisors as managerial employees to exclude them from receiving overtime pay.

The claim was substantial. The complainants were asking the court for $250 million in general damages, $50 million in special damages and an order directing an aggregate assessment of damages, an order requiring CN to disgorge amounts wrongly withheld from the class in respect of unpaid overtime and holiday pay, various forms of declaratory and injunctive relief, and a declaration that CN breached the Code and the express or implied terms of the employment contracts with class members by misclassifying them and by failing to pay them overtime pay.

The motion judge ruled that the issue regarding the misclassification of CN’s employees could not be resolved on a class-wide basis, but decided to redraft the common issue proposed relating to the minimum requirements to be a manager at CN, stating that it would advance the litigation to allow certification of the overtime class action.

This led to this appeal,

The Court of Appeal found:

The motions judge was correct in rejecting the proposed common issues about whether there was a misclassification of the front-line supervisors as managerial employees
It was clear from the evidence that individualized assessments of the job duties and responsibilities of class members would be needed to determine if they were properly classified
The motions judge made an error in recasting as a common issue the question of determining the specific minimum requirements for being a managerial employee at CN
There was a lack of evidence supporting a finding of a core of commonality concerning the front-line supervisors’ job duties and responsibilities
Since there was no commonality, the employer’s appeal was granted and the class action certification order was dismissed

One thing that can be learned from these class action attempts at certification is that it is not easy to certify a class, and the attempt usually fails because of a lack of commonality of the issues raised by the plaintiffs. Even in this case where the motion was initially granted, the common issues were reconsidered because an individual analysis is required for each plaintiff.

Christina Catenacci
First Reference Human Resources and Compliance Editor

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Christina Catenacci

Christina Catenacci, BA, LLB, LLM, was called to the Ontario Bar in 2002 and has since been a member of the Ontario Bar Association. Christina worked as an editor with First Reference between February 2005 and August 2015, working on publications including The Human Resources Advisor (Ontario, Western and Atlantic editions), HRinfodesk discussing topics in Labour and Employment Law. Christina has decided to pursue a PhD at the University of Western Ontario beginning in the fall of 2015. Read more

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