Ruling could change overtime practices

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Employers may see more of the class-action lawsuit alleging overtime abuses based on job misclassifications. That’s according to Elder Marques and Kosta Kalogiros of the McCarthy Tetrault law firm. The pair writes that last week’s Ontario Court of Appeals decision in Brown v. Canadian Imperial Bank of Commerce is of particular note since it overturns the notion that class actions alleging that an employer has misclassified employees and managers to avoid overtime pay were no longer viable.
The appeals court ruling upheld a previous decision by the Divisional Court dismissing a certification motion. Relying on a prior decision in McCracken v. Canadian National Railway Company, the Divisional Court had concluded that “the issue of eligibility for overtime for the proposed class members could only be determined on an individual basis” – that the existence of a common issue with regard to overtime eligibility had not been proven by the plaintiff.
“The Divisional Court found no commonality despite efforts by class counsel to alter the scope of the class to exclude any workers exercising supervisory and managerial responsibilities over other employees, as these workers would not be eligible for overtime but might otherwise be captured by the class definition,” Marques and Kalagiros write. “The Divisional Court indicated that the ‘plaintiff’s evidence must establish some basis in fact to find that the job functions and duties of class members are sufficiently similar that the misclassification element of the claim … could be resolved without considering the individual circumstances of class members.’”
The Ontario court’s decision, Marques and Kalagiros conclude, confirms that misclassification overtime class actions will be difficult to certify, requiring plaintiffs to offer strong evidence of commonality across various job functions and duties.
“Employers should nevertheless assume more misclassification overtime class actions will be pursued while class counsel consider creative opportunities to suggest an ‘exceptional’ case,” they write.
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