In a decision that marks the first of its kind, on August 20, 2013, Justice Belobaba of the Ontario Superior Court of Justice certified a class action alleging that BMO Nesbitt Burns Inc. failed to pay overtime to a group of approximately 1,500 current and former Investment Advisors. The decision in Rosen v. BMO Nesbitt Burns Inc. comes following a tumultuous period in which the Supreme Court of Canada denied leave to appeal certification in two “off-the-clock” overtime cases and the Superior Court of Justice, Divisional Court and the Court of Appeal of Ontario declined to certify two “misclassification” cases, including a case premised on a group of similarly situated employees in Brown v. Canadian Imperial Bank of Commerce.
Despite the significant volume of judicial decisions and commentary in this area in recent months, Rosen is the first “misclassification” case of its kind to be certified in Canada, as well as the first overtime class action to be certified advancing claims under the Employment Standards Act (Ontario). The proposed class in Rosen (much like the proposed class in Brown) comprises current and former BMO Investment Advisors, Associate Investment Advisors and Investment Advisor Trainees who claim they were denied overtime pay contrary to the ESA. Class members, who do not fall within the prescribed classes of exempt employees under the ESA, allege that contrary to their employer’s position, they did not properly qualify for one of two exemptions under the ESA from the requirement to pay overtime for employees who have managerial or supervisory duties and employees who receive a “greater benefit”.
Justice Belobaba’s decision to certify Rosen, in contrast to the decisions of Justice Perell in McCracken v. Canadian National Railway Co. and Justice Strathy in Brown, appears to bring Ontario more in line with the current approach adopted in the U.S., which views “misclassification cases” more favourably than the “off-the-clock” cases. It also suggests that class counsel maybe focusing more closely on provincially-regulated employers, shifting from an earlier focus on cases advanced on the basis of alleged Canada Labour Code violations. Ultimately, the expansion of the scope of overtime claims certified in Ontario suggests prudent employers should carefully review their own overtime and classification policies to ensure they are complying with the statutory minimum requirements. This is particularly important for employers of Investment Advisors, many of whom do not appear to fall neatly within the typical employee-employer relationship and who may not sign formal employment agreements or work traditional hours. Employers and their counsel alike will likely be closely watching the Legislature in coming months with interest to see if it will take steps to expand the prescribed class of exempt employees under the ESA in light of the decision in Rosen.