When an employee feels as though they have been mistreated by an employer, for example, through failure to be paid overtime or harassment, it can be difficult for them to come forward. Concerns about standing up against an employer can be related to a fear of retaliation, uncertainty about how to pursue a resolution or fear that they will not be believed. 

However, sometimes a large group of employees may share similar experiences that they wish to litigate against an employer. In some cases, these groups may be permitted to join and form a class action lawsuit, which can help force a settlement or more robust legal representation. However, in a recent Ontario Superior Court of Justice decision, casting too wide of a net on who to include in a class action or failing to meet strict qualifying criteria can prevent a lawsuit from getting off the ground. 

Employees of car rental company seek to sue for lack of overtime pay

In Le Feuvre v Enterprise Rent-A-Car Canada Company, the employees looking to certify a class action proceeding worked for a national car rental company (“the employer”). The employees were a group of approximately 2,500 individuals who worked for the employer in positions of either Branch Rental Manager (“BRM”), Assistant Branch Rental Manager (“ABRM”), or Station Manager (“SM”). 

The employer’s corporate policy stated that employees in these positions were not eligible to receive overtime pay. However, the employees contend that the employer improperly classified them as managers, therefore improperly depriving them of overtime pay to which they were entitled. 

Employer claims employees do not qualify as a class 

The employer challenged the employees’ claims that they qualified as a class. The motion judge considered the certification test set out in the Class Proceedings Act, which requires the following criteria to be met in order to certify a class proceeding:

a.      The pleadings disclose a cause of action (s. 5(1)(a));

b.      There is an identifiable class of two or more persons (s. 5(1)(b));

c.      The class members’ claims raise common issues (s. 5(1)(c));

d.      A class proceeding would be the preferable procedure for the resolution of the common issues (s. 5(1)(d)); and

e.      There is a representative plaintiff who meets the statutory requirements (s. 5(1)(e)).

The evidential threshold on such a motion is relatively low, and the employees were only required to establish “some basis in fact” for their claim. The motion judge found that the first two criteria were met, but the employees ran into issues with respect to the third criterion. 

Employees unable to raise common issues

The motion judge held that for a class action to form, a specific examination of the employees’ particular job functions and routine work days would be necessary, finding that “merely carrying the label of BRM, ABRM, or SM does not provide any basis in fact for the analysis that must ensue.”

In this case, before a class action could be certified, the Court would be required to find that overtime pay entitlement would need to be resolved commonly for all of the parties involved. The motion judge, however, did not arrive at such a finding, noting that while the group shared three common job titles, their day-to-day responsibilities varied. The motion judge stated that:

“The evidence in the record before me demonstrates that the variability and mix of the work actually performed by BRMs, ABRMs and SMs across hundreds of branches makes the alleged misclassification impossible to resolve on a basis that is common to all employees in the proposed class. A class that includes personnel in small branches where the management is expected to be a jack of all job functions, and personnel in high-volume airport branches where the division of job functions between management and non-management is clear and hierarchical, is not a class that raises issues in the way envisioned by the CPA. Some of the putative class members may well be misclassified while others are not; but the factual basis for that determination is so varied that each member would have to bring their own claim and pursue their own findings of fact.”

Employees appeal finding that there is too much variance in their job duties to meet threshold

An employee appealed Justice Morgan’s decision, claiming that he misapprehended or failed to consider relevant evidence, applied the wrong legal tests, and failed to address the “greater benefit” exemption from statutory minimum employment standards. 

The employee argued that the motion judge incorrectly focused his attention on some existing variability. However, he should have considered the importance of their shared lack of managerial authority. Although they were somewhat classified as managers, they lacked final decision-making authority over hiring and firing, promotions, approvals for leaves of absence, or substantial purchases. 

Court dismisses employee’s appeal

The Superior Court of Justice did not agree with the employee’s position and instead found that the motion judge “appropriately conducted a holistic assessment of evidence relating to the management functions performed by class members to determine whether there was a sufficient degree of commonality to meet the requirement” established in the criteria. The Court wrote that the motion judge was not bound by a requirement to address every aspect of the evidence, stating that a lack of final decision-making authority does not disqualify someone as a manager in Ontario. Instead, a requirement to pay overtime does not apply to “a person whose work is supervisory or managerial in character and who may perform non-supervisory or non-managerial tasks on an irregular or exceptional basis.”

The Court agreed with the motion judge that, despite sharing titles, the employees needed more variation in their day-to-day responsibilities to form a class. For instance, a manager might perform all the day-to-day functions at the rental location in smaller towns. In contrast, a manager might only perform managerial duties in larger or busier locations. As a result, the Court dismissed the appeal. 

Contact Haynes Law Firm in Toronto for Advice on Employment Standards Claims and Worker Classification 

Haynes Law Firm and its trusted employment law team help employers and employees manage a variety of employment law disputes, including providing clients with guidance on workplace policies, employment contracts and dealing with wrongful termination claims. We ensure that throughout the dispute resolution process, parties understand their rights and their options to move forward toward resolution. Contact us online or at 416.593.2731 to learn how we can assist with your employment law needs.