Check Out Time: Court Certifies Class Action For Dismissal Of Hotel Employees Due To The Pandemic

Published date03 February 2022
Subject MatterEmployment and HR, Litigation, Mediation & Arbitration, Contract of Employment, Unfair/ Wrongful Dismissal, Employment Litigation/ Tribunals, Class Actions
Law FirmMcMillan LLP
AuthorMs Joan Young, Juliana Ho and Kristen Shaw

Over the past two years, there have been many unexpected changes at the workplace because of the COVID-19 pandemic, with many employers across various industries electing to implement mandatory workplace vaccinations, make unilateral changes to the job responsibilities of their employees or terminate some workers altogether. These changes have resulted in some affected employees bringing litigation against their employers.

Recently, a group of hourly employees terminated for COVID-19 related reasons proposed to bring a class action proceeding against their prior employer. While class actions are not new in British Columbia, employment related class claims have been extremely rare. In this recent example, the BC Supreme Court (the "Court") certified the claim as a class proceeding, allowing a class of former hotel employees to bring a variety of claims collectively against their employer.

Facts

The representative plaintiff worked as a concierge at the Pan Pacific Hotel in Vancouver, BC, which is owned by the defendant, Ocean Pacific Ltd.1 The plaintiff alleges that, amongst other things, the defendant wrongfully dismissed him and all hourly rate employees due to COVID-19 related reasons. Rather than individually bringing wrongful dismissal claims against the defendant, the plaintiff sought certification from the Court to bring a class action proceeding on behalf of all regular hourly rate employees who had previously been employed by the defendant. In their proposed class action, the employees are seeking compensation for:

  • wrongful dismissal;
  • breach of the duty of good faith and honest performance in contract;
  • unjust enrichment concerning unpaid group Employment Standards Act termination benefits;
  • punitive damages; and
  • pre- and post-judgment interest.

In order to certify a class proceeding, five requirements must be met2 :

  1. the pleadings disclose a cause of action;
  2. there is an identifiable class of 2 or more persons;
  3. the claims of the class members raise common issues;
  4. a class proceeding would be the preferable procedure for the fair and efficient resolution of the common issues; and
  5. there is a representative plaintiff who will fairly and adequately represent the issues of the class, has proposed a workable plan for the class proceeding and does not have a conflict with the other class members on the common issues.

Courts will consider the extent to which a plaintiff has met these requirements under the Class Proceedings Act when coming to a decision about whether a class action may be certified and allowed to proceed to trial. In this case, the defendant said that the statutory requirements under the Class Proceedings Act were not met. Specifically, the defendant asserted that the representative plaintiff's claims do not disclose a cause of action, the class definition is too broad, the claims do not raise a common issue, and the plaintiff is not a suitable representative plaintiff.

Analysis

Cause of Action

In order to satisfy the first requirement under the Class Proceedings Act, the Court must consider whether, assuming all facts pleaded to be true, the pleadings disclose a cause of action, unless it is plain and obvious that the claim cannot succeed. 3

At certification applications, defendants can apply to strike the pleadings if they take the position that some or all of these requirements have not been met. In response, plaintiffs may propose to amend defective pleadings, especially when they come under scrutiny at a certification application. Although prior litigation heard in the British Columbia Court of Appeal has confirmed courts should approach requests for amendments in a "generous" way, the Court must also consider any prejudice to the defendant, the stage of the case and the opportunities the plaintiff has had to produce a viable claim. 4

In this instance, the defendant took issue with the proposed common issues, asserting that the claims pleaded did not give rise to common claims. The representative plaintiff proposed amendments to the pleadings, which the Court stated must be done with specificity. While the Court found that the representative plaintiff was unable to fix the problems with the pleadings entirely, the amendments were appropriate and were proposed early enough that the defendants would not suffer any prejudice if the amendments were allowed. 5

a. Damages Arising From Breach of the Duty of Good Faith and Honest Contractual Performance

The Supreme Court of Canada has held that there is a general duty of honesty in contractual performance, which means that parties should not lie or knowingly mislead each other about matters directly related to the contract; this requirement to act honestly is one of the most widely recognized aspects of the organizing principle of good faith. 6

In this case, the representative plaintiff proposed...

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