Introducing “Cogent Evidence” that a Matter is “Highly Contentious” to Avoid Certification: A Look at Commonality in Employment Class Actions

On August 17, 2018, in Azar v. Strada Crush Limited, 2018 ONSC 4763, Morgan J. certified a class action under Ontario’s Employment Standards Act, 2000 (“ESA”).

The plaintiff alleged that the defendant breached s. 22(1) of the ESA for failing to pay employees overtime pay when they worked for more than 44 hours per week and s. 24(1) of the ESA for failing to pay employees holiday pay. The defendant argued that it fell within various regulatory exceptions to both provisions. Following significant scrutiny of the proposed common issues that contained “as much advocacy as inquiry”, Morgan J. certified the case. As in previous employment class actions, the critical question became whether only “superficial commonality” existed on the record before the court.

Of particular note, the court certified the case despite the defendant’s argument that some of the putative class members were managers, such that s. 8(b) of the regulations (O. Reg. 285/01) excluded them from ESA entitlement to overtime pay. In prior cases, similarly framed common issues about overtime pay were not certified because it was held that the determination of managerial status was an individual issue. In this case, however, the court found that there was some basis in fact that the “bulk of the work” performed by the alleged “management” personnel was “indistinguishable” from the other purported class members based on evidence led by the plaintiff. As the defendant had not led evidence to challenge this proposition, Morgan J. stated:

[M]atters raised by a Defendant in response to a Plaintiff’s claim are not to be taken at face value. Defences, too, need at least some basis in fact before they can be relied upon to block certification of a claim. It does not suffice for a Defendant to invoke the managerial exemption for holiday pay in section 8(b) of O Reg 285/2001 without providing some evidence – not to the level of proof on a balance of probabilities, but at least some cogent evidence – that the yard workers who comprise the proposed body of Class Members are really considered management.[1]

Corporate defendants and defence counsel alike should take note of the court’s overt endorsement of the requirement that in order for the managerial exemption defence to defeat commonality in a proposed overtime pay class action, the defendant must introduce “cogent evidence” that “ma[kes] the question of management or no management highly contentious”.[2] For class actions generally, this case serves as an example of the court’s willingness to grapple with contradictory evidence on a certification motion to enable certification to serve its gatekeeping function.

[1] Azar v. Strada Crush Limited, 2018 ONSC 4763 at para. 40.

[2] Azar v. Strada Crush Limited, 2018 ONSC 4763 at para. 34.

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