Canadian Employment Law Class Actions: Potential Pandemic Claim Certified
The use of class actions for Canada employment law claims has traditionally been considered to be a tool used more in theory than in practice. This may change as a result of a recent decision from the British Columbia Supreme Court, which granted a certification order to a group of employees who have lost work during the pandemic.
In Escobar v. Ocean Pacific Ltd., 2021 BCSC 2414, the Court approved the use of the class action process for a group of employees of Vancouver’s prestigious Pan Pacific Hotel.
The representative plaintiff in the Ocean Pacific case is Romuel Escobar, who had worked as a concierge at the hotel. In their claim, the group of employees claimed that they had been terminated without notice and adequate compensation including group termination benefits mandated by the B.C. Employment Standards Act (“ESA”). As an initial procedural step, the group sought certification of a class through the B.C. Class Proceedings Act.
The group of employees argued before the Court that they were a proper class (and should thus be certified as a class) because of the applicable criteria, which they presented as follows: (a) the pleadings in their case disclosed a cause of action; (b) there is an identifiable class (ie. the group of employees) of 2 or more persons; (c) the claims of the class members raise common issues; (d) the class proceeding would be the preferable procedure for a fair and efficient resolution of the common issues; and (e) there is a representative plaintiff (Escobar) who will fairly and adequately represent the class.
The defendant Ocean Pacific responded by arguing that the case failed to satisfy any of the requirements for certification as a class action. The responding arguments included that the claim: (1) attempted improperly to sidestep the process for resolution of disputes as provided for under the ESA and as administered by the B.C. Ministry of Labour; (2) did not in fact raise common issues, since each individual case had unique features; and (3) Escobar was not a proper representative plaintiff since his own case was not representative of the circumstances of all other employees.
After providing a detailed review of relevant evidence and applicable law, Madam Justice Matthews agreed with the plaintiffs and certified the group of employees as a class.
While some of the outcome in the case is unique to how the particular employer dealt with its employees, there are also some arguments which were accepted by the Court which may be raised by other employees or groups of employees. In particular, all of the employees in the Ocean Pacific case successfully convinced the Court that they had a common issue regarding whether or not they had been constructively dismissed in the context of the pandemic. In the certification proceedings, they framed the issues as follows: “Did the Defendant constructively dismiss the Class members by dramatically reducing their hours due to the impact of the COVD-19 pandemic?” This is a specific question which literally millions of Canadian employees have at least the possibility of pursuing in the courts.
A further common issue which the employees and former employees of the Pan Pacific Hotel presented was whether or not the notice period which the employer might be obliged to provide to them is increased as a result of the pandemic. Again, this is a legal question which could be raised by virtually any employee in Canada who has been dismissed or claims constructive dismissal in the past 24 months.
A final issue to flag from this decision is the claim advanced by the Class Members that the employer had been dishonest in its communications. The claim the employees have advanced, which has not yet been proven, is that the hotel intentionally mislead them about the amount of work which would be available in the future. The allegation here includes an argument that the employer knew that the amount of future work would be reduced, so employees could not reasonably be expected to return to work, and yet the employer allegedly still acted as though future work would be available. This particular dynamic is likely not unique to one specific workplace – the pandemic has involved an ongoing process where “wait and see” scenarios have extended on much longer than anyone reasonable anticipated. This may mean that being critical in hindsight is not the proper approach to follow in assessing whether or not a broken or false promise might have been made many months earlier.
This decision has received significant attention in the business press and the legal community. While in theory it does not change the legal regime which applies to Canadian employee claims, it may well result in some increase in the use or threats to use the class action tool. This may become important as employers shift during 2022 to operationalizing their version of the “new normal” – with a more clear understanding of available work occurring just as certain government benefits may be reduced or eliminated, there will no doubt be a push on behalf of some employees and former employees to seek redress for work or pay which they’ve allegedly been denied during the pandemic. For employers, this decision also highlights the importance of ongoing and clear communication with employees, especially as circumstances and available work change.