Employment & Labour

Class actions for misclassification could clarify debate

By Mia Clarke, Associate Editor

A series of recently launched class-action lawsuits may help clarify the long-standing employee/contractor debate, Toronto employment lawyer Stephen Moreau tells the Law Times.

Moreau, a partner with Cavalluzzo LLP, says businesses often hire workers under agreements that describe them as independent contractors when, in fact, they’re employees under the law.

He recently launched a $20-million claim against a Toronto-based private high school on behalf of a number of its former sessional teachers.

The proposed class action “alleges that teachers classified as independent contractors, who were paid flat-rate fees to instruct courses, missed out on overtime, vacation pay and severance payments, as well as a host of other protections available to employees" under the Employment Standards Act (ESA), according to the online legal publication.

"The claim also alleges that other teachers — though properly classified as employees — were also denied ESA entitlements," Moreau tells AdvocateDaily.com.

In a statement of defence, the school denies the claims and says all of its workers were properly classified, says the Law Times article.

None of the allegations has been proven in court.

“Employers do have to be cautious,” says Moreau, “and what this case reminds us is that there are employers in more traditional industries trying it out for size and calling their workers contractors.”

If certified, the action could include “anywhere from 100 to 200 teachers per year” who have worked at the school since it opened in 2002, Moreau said in a previous AdvocateDaily.com article.

So far, more than 150 teachers have contacted him.

The proposed lawsuit is claiming $20 million, plus an unspecified amount for unpaid overtime, vacation and holiday pay that the teachers believe is owed to them because of the misclassification of their employment status, says an article in the Toronto Star.

The workers claim the school hired them as “independent contractors” instead of “employees,” leaving them without protection under the ESA, including the right to earn minimum wage and overtime pay, says the publication.

Moreau’s case is one of many class actions filed by workers for misclassification, says the Law Times article.

In this recent decision, for example, Ontario Superior Court Justice Paul Perell stayed an action by ride-sharing drivers who claimed they should be considered employees under the ESA rather than independent contractors to the company.

Perell’s decision didn’t comment on the merits of the claim, says the article, but stayed the action in favour of arbitration under a clause in the service agreement signed by all the drivers.

The ruling has since been appealed.

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