Common Ground? Class Action Updates
Ontario Court Approves Settlement Amount in Employee Misclassification Class Action
Date: March 2, 2023
In Phillip v Deloitte Management Services LLP et al, the Ontario Superior Court recently approved a $2.4 million dollar settlement in a class action alleging employee misclassification and breaches of the Employment Standards Act, 2000 (ESA).
The class action commenced nearly 8 years ago and involved approximately 500 individuals who provided document review and e-discovery services through independent contractor agreements with the defendants. The claim sought damages relating to an alleged failure to compensate document reviewers for benefits prescribed by the ESA including minimum hourly wage, overtime pay, vacation pay, as well as damages relating to CPP and EI payments. The class action was partially approved by the Court in 2017 and then fully approved in 2018.
This decision dealt with a motion seeking court approval of a $2.4 million dollar settlement amount, class counsel legal fees, payment to the Class Proceedings Fund, the distribution method and notice documents, as well as an honorarium of “no more than” $20,000 for the representative plaintiff.
In approving the settlement, Justice Belobaba relied on what he referred to as a “detailed and candid affidavit” filed by class counsel and focused his approval on two points. First, that there was good reason to doubt the recoverability of the CPP and EI payments claimed because the amounts had already been refunded. When these claimed amounts were deducted from the overall claim, the amount in issue fell well below the settlement amount. Second, Justice Belobaba noted that the settlement amount was achieved after two days of mediation before a highly experienced mediator who recommended the settlement amount and that there were no objections from the class members.
Justice Belobaba approved the remaining elements of the settlement, but only awarded the representative plaintiff an honorarium of $8000 on the basis that while his level of involvement was not “truly extraordinary” he did incur some personal and financial hardship.
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