In a recent decision, the Ontario Superior Court of Justice certified another overtime class action.  The class consists of investment advisors claiming that they are owed overtime pay by the defendant, BMO Nesbitt Burns Inc.

This is the first “misclassification” case of its kind to be certified in Ontario, and runs counter to the 2012 decision in Brown v. CIBC, wherein the court held that whether an employee was eligible for overtime could not be determined on a class basis. 

The plaintiff, a former investment advisor at BMO Nesbitt, alleges that he and his fellow investment advisors were wrongly classified as ineligible for overtime pay in violation of the Employment Standards Act, 2000. BMO Nesbitt’s position was that its investment advisors fall within the ESA’s exemptions from overtime pay, as their work was either supervisory or managerial in nature, or their overall autonomy and potential for high earnings provided them with a greater benefit than overtime pay.

The proposed class covers more than 1,500 current and former BMO Nesbitt investment advisers, including those who performed the same or similar job functions under different job titles, and excluding any time period that such individuals held various managerial positions or were on a team that had one or more associates or sales assistants assigned to them.

Similar to Brown, the central issue to be decided in the certification proceeding was whether the proposed class had a sufficient commonality or similarity of job functions that eligibility for overtime pay could be determined without resorting to individual findings of fact. BMO Nesbitt argued that in accordance with Brown, individual determinations were necessary to determine whether each investment advisor fell within any of the applicable ESA exemptions.  

The Court ultimately disagreed, and concluded that the key issues could be decided without resorting to individual findings of fact, and as a result, the class action was certified.

The Court distinguished the proposed class from that in Brown by noting that “unlike in Brown, all of the Nesbitt investment advisors involved in management or supervisory work, i.e. branch managers and team leaders, have been excluded from the class definition.” As a result, the Court was satisfied that the investment advisors in the proposed class possessed a sufficiently common set of duties such that the applicability of the “managerial” exemption could be determined as a common issue.

As for the “greater benefit” exemption, the Court was content that all of the core terms in each class member’s initial employment agreement were essentially the same and could therefore be assessed as a class.

Our Views:

This decision arguably runs contrary to the decision of the same court in Brown and marks a further step in the recent trend of certifying overtime class proceedings.  It will be interesting to see if the case is appealed and, if so, whether it will be upheld by the Court of Appeal after a review of the full evidentiary record.  It should also be remembered that a certification decision is not a decision on the merits.  Nevertheless, in order to avoid a similar fate, employers should: (i) review jobs/positions that are classified as “managerial or supervisory” to determine whether they truly fall within the ESA overtime exemption; and (ii)  revisit their overtime policies to ensure that they meet the statutory requirements and are administered so as to not create a situation whereby employees are “permitted or suffered” to perform unauthorized work in excess of applicable overtime thresholds.