On August 20, 2013, Justice Belobaba of the Ontario Superior Court of Justice (OSCJ) certified a class proceeding involving misclassification overtime claims by investment advisers of BMO Nesbitt Burns (Nesbitt Burns). This case reminds employers that they must continue to consider class action risks in assessing their compliance with statutory overtime requirements.
The plaintiff claimed that Nesbitt Burns failed to pay him overtime pay in accordance with the requirements of the Ontario Employment Standards Act, 2000 (ESA), as he had been incorrectly classified by Nesbitt Burns as exempt from those requirements. Nesbitt Burns defended the claim on the basis that the proposed class members (1) were managers and therefore exempt from the overtime provisions of the ESA, and (2) had the potential for very high earnings, which provided them with greater benefits than the overtime pay required by the ESA.
In certifying the action as a class proceeding, the OSCJ distinguished prior cases which had concluded that class actions were not an appropriate vehicle for addressing misclassification overtime claims, as a determination of whether employees exercised managerial functions required individual assessment. Notably, Justice Belobaba distinguished the recent decision of the Divisional Court which upheld a denial of certification in Brown v. CIBC (Brown), a proposed class action commenced by analysts and investment advisers working for CIBC World Markets. The OSCJ held that, unlike in Brown, the job functions of the proposed class members in the case before it were sufficiently similar such that eligibility for overtime pay under the ESA could be decided on a common basis. The OSCJ also found that the defences articulated by Nesbitt Burns (the managerial exemption and greater benefit argument) were common issues that could be determined on a classwide basis.
The OSCJ emphasized that the certification of the action as a class proceeding was a procedural matter that had nothing to do with the merits of the dispute. However, the decision of Justice Belobaba demonstrates that, despite prior decisions, misclassification overtime class actions may be permitted to proceed to common issues trials in circumstances where the proposed class is well defined, with class members performing substantially similar job duties.