Increase in class actions in employment and labour law cases

In recent years, lawyers in class action cases have turned their attention to labour and employment law, following the example of the common law provinces where the trend has already been established for several years. The class action authorized against L’Aréna des Canadiens Inc. and L’Aréna du Rocket Inc. for their employees' overtime is a recent example.¹

Overtime is generally not paid for an employee who receives an annual salary, unlike an employee who is paid on an hourly basis. There are a few exceptions, for example, where an employee paid on an annual basis would earn less than the minimum wage when we consider the number of hours worked per week. 

In Nordia,² the plaintiff questions his employer's overtime policy, which would apply only to his basic hourly rate, not his basic hourly rate plus bonuses, including for bilingualism. This class action was authorized on March 18.

The facts

On April 25, 2022, the plaintiff filed an Application for authorization to institute a class action and to obtain the status of representative (the Application) against his employer Nordia Inc., alleging it had not complied with the provisions of his employment contract or, alternatively, with the provisions of the Act respecting labour standards³ (ARLS) regarding overtime pay. The plaintiff's first cause of action was therefore aimed at Nordia's contractual liability under its employment contract, while the second was aimed at Nordia's legal liability as an employer for non-compliance with the ARLS.

The class members of the proposed class action were as follows:

All employees or former employees of the defendant in Quebec paid on an hourly basis, with the exception of managers and unionized employees who worked overtime and/or on statutory general holidays.

The plaintiff was employed by Nordia for almost three years, during which time he worked full-time as a call centre operator. He was not unionized. Under the terms of his employment contract, the plaintiff was paid at an hourly rate of $21.75. His hourly rate was broken down as follows in his contract: 

• $16.50/hr as base salary;
• $4.25/hr as a bonus; and 
• $1/hr as a bilingualism bonus. 

The plaintiff alleges he regularly worked overtime. According to him, Nordia is in breach of his employment contract and the ARLS, since his overtime pay (daily and on statutory holidays) was paid at 150% of his hourly wage of $16.50 and not his usual hourly wage of $21.75 provided for in his employment contract.

Superior Court decision

On March 18, 2023, Justice Lukasz Granosik of the Superior Court allowed the Application, finding, among other things, that the plaintiff had demonstrated an arguable case with respect to both causes of action.

The court first summarized the principles governing article 575 (2) of the Code of Civil Procedure,⁴ which requires the plaintiff to demonstrate an arguable, a prima facie case, thereby reiterating the low burden placed on the plaintiff at the authorization stage, who need only establish a [translation] "mere possibility of succeeding on the merits" to satisfy this criterion. 

As for the first cause of action involving Nordia's contractual liability under the employment contract, the court rejected the arguments put forward in defence, ruling they involved mixed questions of fact and law on the merits and that, taking the alleged facts as true, the plaintiff had demonstrated an arguable case as to his employer's compliance with its contractual obligations regarding overtime pay.

With regard to the second cause of action seeking Nordia's legal liability as an employer for non-compliance with the ARLS, which was alternative, the court concluded that the debate raised by the plaintiff was neither frivolous nor doomed to failure, and since it involved interpreting and applying the ARLS, it gave rise to questions of fact, and even mixed questions of fact and law, which can only be decided through trial, at which the parties could present full evidence. However, the Court noted that due to the one-year limitation period in section 115 of the ARLS, the definition of the proposed class should be amended to specify April 25, 2021, as the starting point for any claim by an employee or former employee under the ARLS.

Key Takeaways

This decision marks another step for Quebec class actions in labour and employment law. Given the recent strong interest in class actions raising issues between employees and employers, as well as the low threshold for authorizing class actions in Quebec, any employer that pays employees on an hourly basis may benefit from reviewing its internal policies and contractual terms relating to, among other things, pay and benefits.