Court File and Parties

COURT FILE NO.: CV-19-00618043 -00CP DATE: 20231129

SUPERIOR COURT OF JUSTICE - ONTARIO

RE: KABIR SINGH, Plaintiff AND: RBC INSURANCE AGENCY LTD. and AVIVA GENERAL INSURANCE COMPANY, Defendants

BEFORE: Justice Glustein

COUNSEL: Andrew Monkhouse and Alexandra Monkhouse, for the plaintiff Jeremy Devereux and Ted Brook, for the defendant RBC Insurance Agency Ltd. Paul J. Martin and Pavel Sergeyev, for the defendant Aviva General Insurance Company

HEARD: November 2, 2023

Reasons for Decision

Background

[1] Aviva Canada acquired RBC General Insurance Company (RBC General) as of July 1, 2016, and changed the company's name to Aviva General Insurance Company (Aviva General). Prior to the completion of the acquisition, RBC General’s insurance sales and distribution business was transferred to a new entity, RBC Insurance Agency Ltd. (RBC IA), which is a wholly-owned subsidiary of Royal Bank of Canada. [1]

[2] The proposed representative plaintiff, Deval Trivedi (Trivedi), worked for RBC General as a Property & Casualty Insurance Advisor, Field Sales (P&C Advisor) from September 2007 until July 1, 2016. Upon the acquisition, Trivedi’s employment was automatically switched to RBC IA, where Trivedi worked until June 9, 2017.

[3] P&C Advisors earned both a salary and variable compensation. All P&C Advisors were subject to the same compensation policy (the Compensation Policy) which stated that "[a]ll Variable Compensation components of the Plan have been established at a level that includes both Vacation Pay and Statutory Holiday Pay."

[4] The issue in the action is whether the terms of the Compensation Policy violate the employment standards legislation (ESL) of the seven provinces in which P&C Advisors were employed. The relevant ESL requires that variable compensation be treated as wages for the purposes of calculating the required vacation and public holiday pay. The P&C Advisors submit that the defendants Aviva General and RBC IA breached this requirement.

[5] In the Certification Decision, I granted the motion for certification by Trivedi against RBC IA, subject to modifications to the common issues and class definition as set out in the Certification Decision. Since Trivedi brought his claim against RBC IA within two years of the end of his employment with them, I held at para. 186 of the Certification Decision that (i) his claim disclosed a cause of action against RBC IA under s. 5(1)(a) of the Class Proceedings Act, 1992, S.O. 1992, c. 6 (CPA) and (ii) there was a basis in fact that at least some of his claims against RBC IA were not statute-barred, and as such, he was an adequate representative plaintiff under s. 5(1)(e) [2] for his claims against RBC IA.

[6] In the Certification Decision, I also certified the class action against Aviva General, subject to modifications to the common issues and class definition as set out in the Certification Decision. However, I held that such certification was conditional upon Class Counsel bringing a motion within 100 days for the appointment of a representative plaintiff who could plead and provide a basis in fact for a claim which was not statute-barred against Aviva General. [3] I held that:

(i) Trivedi had not met the test under s. 5(1)(a) because he had not pleaded any basis to rebut the statutory presumption under s. 5(2) of the Limitations Act, 2002, S.O. 2002, c. 24, Sched. B (the statutory presumption) that he discovered his claim against Aviva General when he received his last commission payment from RBC General and, in any event, no later than July 1, 2016. (ii) Trivedi had not met the test under s. 5(1)(e) because he led no affidavit evidence to establish a basis in fact to rebut the statutory presumption. (iii) Trivedi’s evidence on cross-examination “definitively” established that his action was statute-barred, as the test was set out in Stone v. Wellington County Board of Education (1999), 120 O.A.C. 296 (C.A.), at para. 10, leave to appeal refused, [1999] S.C.C.A. No. 336.

[7] Trivedi’s evidence on cross-examination for the certification motion was clear. He (i) understood that his vacation and public holiday pay was not calculated on his variable compensation, (ii) raised his concerns about that issue repeatedly at branch meetings, and (iii) was not satisfied with the response.

Nature of the Motion and Overview

Nature of the motion

[8] The present motion is brought by Trivedi to:

(i) substitute Binay Saroop (Saroop) for Trivedi as the representative plaintiff against Aviva General, and certify this action as a class proceeding against Aviva General and (ii) grant leave to (a) amend the draft statement of claim (the Draft Claim) and (b) amend the style of cause to Deval Trivedi and Binay Saroop v. RBC Insurance Agency Ltd. and Aviva General Insurance Company, and to allow the Draft Claim to be filed with the registrar.

Overview

Section 5(1)(a)

[9] Saroop has pleaded allegations in the Draft Claim that he (i) had “no conception that himself or anyone else was underpaid vacation and holiday pay”, (ii) “relied on Aviva General’s [4] representations that his pay was correct and in compliance with local employment standards legislation” and (iii) “only learned that he may have been underpaid vacation and holiday pay when he became aware of the [Certification Decision]” (at paras. 36-37 of the Draft Claim).

[10] If accepted as true, those pleadings disclose a cause of action. The allegations rebut the statutory presumption. Consequently, the s. 5(1)(a) test is met. Aviva General raises no s. 5(1)(a) objection on the present motion.

Section 5(1)(e): The cause of action issues

[11] Aviva General submits [5] that Saroop has not satisfied the requirements under s. 5(1)(e) to be an adequate representative plaintiff. [6]

[12] First, Aviva General raises “cause of action” issues, as on the certification motion. Aviva General submits that Saroop has no cause of action because:

(i) Saroop did not recall reading the Compensation Policy. Aviva General submits that Saroop “cannot manufacture a discoverability issue based on a document he has never read or relied upon”. (ii) “There is also ample reason to conclude that Mr. Saroop had personal knowledge that Mr. Trivedi and other P&C Advisors raised concerns about the payment of vacation and public holiday pay”.

[13] I do not agree. I find that Saroop established some basis in fact for a cause of action to rebut the statutory presumption.

[14] With respect to Aviva General’s first cause of action submission, there is some basis in fact that Saroop read the Compensation Policy.

[15] More importantly, even if Saroop did not read the Compensation Policy, he may be entitled to rely on the implied terms in an employment contract that an employer has complied with the ESL requirements, including vacation and public holiday pay based on both wages and variable compensation.

[16] With respect to Aviva General’s second cause of action submission, Saroop’s affidavit evidence is unequivocal that he (i) “had no conception that myself, or anyone else, was being underpaid vacation and holiday pay”, (ii) received his pay from RBC General on the basis that RBC General “was representing that my pay was correct”, (iii) “never raised any issue with my pay” while at RBC General, and (iv) “only learned that [he] may have been underpaid vacation and holiday pay when [he] became aware of the [Certification Decision]”.

[17] In his cross-examination, Saroop affirmed his core positions as set out in his affidavit that he (i) never discussed whether the Compensation Policy was contrary to ESL requirements for vacation and public holiday pay, and (ii) did not learn that of the issue until the Certification Decision. While Saroop stated on some occasions during his cross-examination that he “did not recall” certain conversations either about compensation or Trivedi’s complaints in particular, such evidence does not “definitively” establish that those alleged discussions took place. Consequently, there is a basis in fact for Saroop to set aside the statutory presumption. The court cannot “definitively” find that the case is statute-barred, based on the test in Stone.

[18] Trivedi did not provide direct evidence of discussions with Saroop. However, even if there had been direct contradictory evidence from Trivedi, such a contradiction should not be resolved on a certification motion. Unless the court can determine the limitation period with certainty, discoverability findings should not be made on a certification motion and should instead be considered at the individual issues stage: Amyotrophic Lateral Sclerosis Society of Essex County v. Windsor (City), 2015 ONCA 572, 387 D.L.R. (4th) 603, at para. 41.

Section 5(1)(e): The conflict of interest issue

[19] Aviva General submits that Saroop has a disqualifying conflict of interest because “Mr. Trivedi’s evidence was that he and other P&C Advisors raised concerns once or twice per year about their vacation and public holiday pay, and that they asked their manager – which Mr. Saroop admitted he was – why they were not being paid vacation and public holiday pay based on their variable compensation”, which “puts [Saroop] in a conflict of interest with those class members [who complained about their vacation and public holiday pay], who may assert that they relied on Mr. Saroop’s response (or lack of response) in not addressing their claims for vacation and public holiday pay” (the “conflict of interest issue”).

[20] I do not find that the evidence discloses a conflict of interest which prevents Saroop from adequately representing the class. Aviva General submits that P&C Advisors would necessarily be in conflict with Saroop because P&C Advisors would assert that they relied on Saroop’s alleged representations at branch meetings. However, based on the evidence, a conclusion on this motion that (i) Saroop made such representations to P&C Advisors and (ii) P&C Advisors relied on such representations (if they occurred) would be hypothetical and speculative.

[21] Saroop shares the same interest in obtaining compensation and has no conflict in pursuing the common issues of (i) whether the defendants breached the ESL, (ii) if so, whether such conduct constitutes a breach of contract, breach of trust, or unjust enrichment, and (iii) whether the class members are entitled to an award of aggregate damages.

Facts

[22] I rely on the evidence I set out at paras. 9-50 of the Certification Decision and do not repeat it in these Reasons.

Draft Claim

[23] Given the allegations in the Draft Claim, the s. 5(1)(a) issue is not before the court. Nevertheless, I set out the relevant allegations from paras. 36-37 of the Draft Claim:

During the time he worked for Aviva General, Mr. Saroop had no conception that himself or anyone else was underpaid vacation and holiday pay. He relied on Aviva General’s representations that his pay was correct and in compliance with local employment standards legislation.

Mr. Saroop pleads that he only learned that he may have been underpaid vacation and holiday pay when he became aware of [the Certification Decision].

Trivedi’s cross-examination evidence on the certification motion

[24] On the present motion, Aviva General relies on Trivedi’s cross-examination evidence on the certification motion. I repeat my summary of that evidence at para. 212 of the Certification Decision for ease of reference:

Trivedi was cross-examined by counsel for Aviva General. I summarize the relevant evidence as follows:

(i) Trivedi acknowledged receiving copies of an updated version of the Compensation Policy as provided by RBC IA. (ii) Trivedi "was part of the [RBC General and RBC IA] organization for the last 10 years" and "every now and then we have raised this matter with RBC" regarding "why we've not been paid on our variable compensation or vacation pay and all that. So, that sort of thing is always in our mind back then, because that's never been answered to the best of our knowledge and interpretations" (emphasis added). (iii) These matters were raised in conferences with RBC "management" or a "senior person" (a "manager or regional vice president and head of the department") in which Trivedi "asked questions about that", and "once a year or twice a year definitely it was a discussion by us with them." (iv) Trivedi agreed with the statement that "whatever you were told initially [in response to the inquiries] you were not satisfied with that response" (emphasis added). (v) Trivedi also agreed with the statement that "right up until the time you left, which I understand was June of 2017, I gather that was still in your mind an unresolved issue" (emphasis added). (vi) Trivedi had similar discussions with other P&C Advisors "on and around the time when we were going on vacations" since "these issues are always on everybody's mind that when ... especially producers who are making a good amount of money. When they were planning their vacations, and coming after the vacations when they saw their pay cheque" so "there was kind of a discussion in our eight o'clock morning meetings" (ellipsis in original; emphasis added). (vii) Trivedi also stated: "I can say when I was present in some of the meetings it's been raised by all my team members within the branch I worked for" since it was a "live issue" (emphasis added).

[25] In his cross-examination, Trivedi was not asked which branch managers allegedly participated in the discussions. His evidence was that the discussions took place “every now and then”, “once a year or twice a year”, and “there was kind of a discussion in our eight o'clock morning meetings", and “[w]hen [P&C Advisors] were planning their vacations, and coming after the vacations when they saw their pay cheque”.

Evidence on the present motion

[26] The proposed representative plaintiffs rely on affidavit evidence from Saroop filed for the present motion.

[27] Both parties rely on Saroop’s evidence from his cross-examination. [7]

[28] Aviva General also relies on affidavit evidence from Sarabjeet Bhaura (Bhaura), the Head of Human Resources for RBC IA, filed for the present motion. Bhaura was not cross-examined on his affidavit and his evidence was not contested.

[29] Trivedi provided no evidence on the present motion.

Saroop’s affidavit evidence

[30] Saroop worked for RBC General from June 7, 2010 to June 30, 2016. He was a P&C Advisor between November 1, 2012 until October 31, 2013. He was then promoted to Regional Manager with RBC General until July 1, 2016, and continued in that role with RBC IA until he resigned on April 13, 2017. [8]

[31] At para. 5 of his affidavit, Saroop states that he had no knowledge of any improper payment of vacation and public holiday pay:

During the time that I worked for Aviva I had no conception that myself, or anyone else, was being underpaid vacation and holiday pay, I received my pay from Aviva and understood that Aviva was representing that my pay was correct. I never raised any issue with my pay at that time, as I had no reason to believe that Aviva was incorrectly calculating my pay. I relied on Aviva’s representations to me that my pay was correct, and in compliance with local employment standards legislation.

[32] At paras. 6 and 7 of his affidavit, Saroop states that it was only upon becoming aware of the Certification Decision that he discovered the existence of a cause of action based on underpayment of vacation and public holiday pay:

I only learned that I may have been underpaid vacation and holiday pay when I became aware of the [Certification Decision].

Reviewing that decision, my own recollection, and discussing with Monkhouse Law I now believe that P&C advisors were underpaid during our time working for Aviva … put another way because the policies said that our pay was all-inclusive I agree with Mr. Trivedi that we were underpaid vacation and holiday pay.

Saroop’s evidence on cross-examination

[33] Both parties rely on Saroop’s evidence on cross-examination. I review that evidence below.

Evidence that Saroop did not participate in the branch discussions described by Trivedi

[34] In his cross-examination, Saroop was asked whether he participated in the discussions referred to by Trivedi in which P&C Advisors raised the purported failure of RBC General and RBC IA to pay vacation and public holiday pay on variable compensation as a “live issue that was always discussed at branch with his managers and I presume with you”.

[35] Saroop expressly denied participating in such discussions. He stated:

No. There were no such discussions, that I can tell you. Majorly, the discussions were, as I mentioned to you before, it was majorly around how much sales will get you, how many points, and eventually how much money we'll make. [Emphasis added.]

[36] The above evidence was consistent with Saroop’s earlier response in his cross-examination by counsel for RBC IA that “Majorly, the compensation conversations were around how much you will sell, how many points you will make and eventually, what will be your compensation at the end of the day” and “when it comes to a regional director’s role, you are more so, like in charge of communicating to them how much sales they will do and how much money they are going to make, in case if they sold that much of volume, in that case they will make that much of points and eventually make that much of commissions”.

[37] When asked whether he made any inquiries as a P&C Advisor when the Compensation Policy was introduced, Saroop answered that he “did not talk about that”. Saroop similarly stated that “No, we did not talk about “vacation and holiday pay”.

[38] When Saroop was asked whether Trivedi raised his concerns to Saroop about RBC General or RBC IA’s calculation of vacation and public holiday pay, when Trivedi was going on vacation, Saroop responded “No, he did not”.

[39] Saroop gave the following evidence which was consistent with his denial of participating in any of the branch discussions referred to in Trivedi’s evidence:

(i) As Regional Manager, his role with respect to reviewing compensation policies was to communicate with P&C Advisors how much money they would make depending on the volume of their sales. He stated that he was required to be familiar with RBC General and RBC IA’s compensation policies since he was “in charge of communicating to [P&C Advisors] how much sales they will do and how much money they are going to make, in case if they sold that much of volume, in that case they will make that much of points and eventually make that much of commissions”. (ii) When asked whether he “ever went to someone either superior to you or in the HR department, to discuss how the application of vacation and holiday pay worked under the compensation plan”, Saroop answered “No, I did not”. (iii) He “never knew how the [vacation and public holiday pay] is calculated”, and “never thought that there was anything wrong”. (iv) His answer was “no” when asked whether, as a hiring manager, he “ever [had] occasion to explain to anyone how the compensation plan with respect to vacation and holiday pay worked”. (v) He answered “very correct” when asked to confirm that his “very first knowledge” that “personal vacation and holiday pay may not have been calculated properly” was “sometime after March of [2023]”. (vi) When asked whether P&C Advisors “would come to you as their manager to explain the compensation guide to them as best you could”, Saroop’s response was “[i]n case if they had any specific questions, there was a 1-800 number where they can call”.

Saroop’s cross-examination evidence where he stated he did not recall certain alleged discussions

[40] Saroop was frequently challenged on his evidence that he had no conception that the Compensation Policy did not comply with minimum ESL standards. On certain questions, Saroop’s evidence was that he did not recall whether the events put to him took place, rather than denying that such events took place. I summarize that evidence as follows:

(i) When asked if he had a “recollection” of whether he discussed the “compensation plan” following an October 26, 2016 email he sent to P&C Advisors in which such planned discussion was raised, Saroop stated that “I don’t recall” because “it is more than six years, seven years [ago]”. [9] (ii) After denying that Trivedi had raised concerns with him about RBC IA’s calculation of vacation and public holiday pay when Trivedi was going on vacation, Saroop stated that “I don’t recall” such concerns being raised. (iii) When asked whether he was “saying that [he did not] recall the other team members raising these issues [about improper calculation of vacation and public holiday pay]”, Saroop’s evidence was “No, I don’t recall that”. (iv) When asked “what Mr. Trivedi talks about, you have no recollection of, correct?”, Saroop’s response was “I do not”. (v) When asked if he ever had a “discussion with his managers or others at RBC when he was a P&C advisor” about “how the vacation and holiday pay was calculated under the variable compensation aspect of your compensation plan”, Saroop responded “No. I don’t recall.”

[41] Saroop’s evidence was also that he did not recall whether he had read the Compensation Policy “applicable to the year that it was in respect of [his] variable compensation”.

Saroop’s answers to questions taken under advisement

[42] In response to a question taken under advisement that “you don’t dispute any of this evidence that Mr. Trivedi gave that has been extracted [in the Certification Decision]”, Saroop’s response was:

I cannot speak to Mr. Trivedi’s evidence, only my own. I cannot speak to his discussions with other managers or P&C advisors. The issue of vacation and holiday pay on variable compensation was never brought up to me while I worked for RBC General or RBC Insurance Agency and I was not aware that such an issue existed prior to learning about [the Certification Decision].

[43] In response to a question taken under advisement as to the representations upon which he relied (given his affidavit evidence that “[he] relied on Aviva’s representations to [him] that [his] pay was correct, and in compliance with local employment standards legislation”), Saroop’s evidence was that he “received compensation policies every year from [his] employer” and:

I understood that my employer represented to those working in sales that they respected all employment minimum standards and that they were paying vacation and holiday pay according to applicable laws.

[44] There were numerous questions taken under advisement during Saroop’s cross-examination. Aviva General did not bring a motion to compel answers on those questions. Saroop’s counsel provided answers to some of the questions taken under advisement. Saroop’s counsel also referred back to other questions when taking the position that the same question had been asked and answered elsewhere in the cross-examination.

[45] Saroop refused to answer several questions taken under advisement, based on privilege. Saroop took the position that his statement in his affidavit that he only learned of the improper vacation and public holiday pay after discussions with his counsel did not “open the door” to all questions concerning solicitor-client communications between Class Counsel and their client.

Bhaura’s affidavit evidence

[46] Bhaura set out the following uncontested evidence in his affidavit:

(i) Saroop was a P&C Advisor with RBC General from November 1, 2012 to October 31, 2013 and during that time was paid pursuant to the Compensation Policy. (ii) Effective October 30, 2013, Saroop became a Regional Manager at RBC General, a position he held until June 30, 2016 with RBC General. (iii) Effective July 1, 2016, Saroop became an employee of RBC IA as a Regional Director, and held that position until April 13, 2017 when he resigned from RBC IA. (iv) At all times as Regional Manager, Saroop (a) was not compensated under the Compensation Policy and (b) did not receive any commission-type payment from RBC General or RBC IA. (v) As a Regional Director with RBC General and RBC IA, Saroop’s responsibilities included: (a) overseeing one or more assigned branches, (b) coaching and developing employees in their branches, including P&C Advisors, (c) being familiar with policies including the compensation policies that applied to the P&C Advisors that he supervised, (d) ensuring that these policies were followed, and (e) responding to questions from employees, including questions from employees about compensation, with assistance from Human Resources where needed.

[47] Bhaura also attached emails to his affidavit which established that (i) Saroop received Compensation Policy documents as a Regional Manager and (ii) on October 26, 2016, Saroop advised Trivedi and other P&C Advisors in the Hurontario Street, Mississauga location, by email, that there would be a “Team Meeting” to review “attached Documents for detailed explanation of FY2017 Compensation”.

Issues

[48] Aviva General asks the court to find that Saroop is not an adequate representative plaintiff under s. 5(1)(e) of the CPA. Aviva General submits:

(i) Saroop has no cause of action because he did not recall reading the Compensation Policy. Aviva General submits that Saroop “cannot manufacture a discoverability issue based on a document he has never read or relied upon”. (ii) Saroop has no cause of action because “[t]here is also ample reason to conclude that Mr. Saroop had personal knowledge that Mr. Trivedi and other P&C Advisors raised concerns about the payment of vacation and public holiday pay”. (iii) Saroop has a disqualifying conflict of interest because “Mr. Trivedi’s evidence was that he and other P&C Advisors raised concerns once or twice per year about their vacation and public holiday pay, and that they asked their manager – which Mr. Saroop admitted he was – why they were not being paid vacation and public holiday pay based on their variable compensation”, which “puts [Saroop] in a conflict of interest with those class members [who complained about their vacation and public holiday pay], who may assert that they relied on Mr. Saroop’s response (or lack of response) in not addressing their claims for vacation and public holiday pay”.

[49] For the reasons that follow, I find that Saroop is an adequate representative plaintiff under s. 5(1)(e) because:

(i) Saroop established some basis in fact to rebut the statutory presumption, and as such he has a cause of action against RBC General. [10] (ii) Saroop established some basis in fact that he does not have a conflict of interest with other class members.

[50] I address each of these issues below.

Analysis

Issue 1: The cause of action issues

[51] I first consider the applicable law. I then apply that law to the evidence before the court on the present motion, in relation to the cause of action issues raised by Aviva General.

The applicable law

[52] I review the general principles of certification, the role of the court in determining discoverability at a certification hearing, the applicable threshold under s. 5(1)(e), and the law concerning discoverability of ESL claims.

General principles of certification

[53] At para. 89 of the Certification Decision, I followed the law on the general principles of certification as summarized by Perell J. in Price v. H. Lundbeck A/S, 2018 ONSC 4333, at paras. 81-83, rev’d on other grounds, 2020 ONSC 913 (Div. Ct.). I summarize those principles as follows (cited verbatim from Price):

(i) On a certification motion, the question is not whether the plaintiff's claims are likely to succeed on the merits, but whether the claims can appropriately be prosecuted as a class proceeding. (ii) The test for certification is to be applied in a purposive and generous manner, to give effect to the goals of class actions; namely: (1) providing access to justice for litigants; (2) encouraging behaviour modification; and (3) promoting the efficient use of judicial resources. (iii) The purpose of a certification motion is to determine how the litigation is to proceed and not to address the merits of the plaintiff's claim; there is to be no preliminary review of the merits of the claim. (iv) However, the plaintiff must show "some basis in fact" for each of the certification criteria other than the requirement that the pleadings disclose a cause of action. (v) The "some basis in fact" test sets a low evidentiary standard for plaintiffs, and a court should not resolve conflicting facts and evidence at the certification stage or opine on the strengths of the plaintiff's case.

[54] I repeat the conclusion I reached at para. 90 of the Certification Decision:

Consequently, it is not the role of the court to assess the merits of the plaintiff's claim on a certification motion. As Strathy J. (as he then was) stated in Penney v. Bell Canada, 2010 ONSC 2801, at para. 45, "[t]here is no assessment of the merits at the certification stage. Certification is a procedural motion focusing on the form of the action."

The role of the court in assessing discoverability issues on a certification motion

[55] In Amyotrophic, the court set out the general principle that temporal limits on a class definition, based on limitation periods, should be imposed only if the plaintiff cannot establish some basis in fact that a factual inquiry is necessary to determine discoverability. Strathy C.J. held, at para. 41: “where the resolution of the limitation issue depends on a factual inquiry, such as when the plaintiff discovered or ought to have discovered the claim, the issue should not be decided on the motion for certification”.

[56] Similarly, as I reviewed at para. 107 of the Certification Decision, the Divisional Court in Omarali v. Just Energy Group Inc., 2016 ONSC 7096, stated, at para. 6, that "[i]t was reasonable to leave the issues of time bars and discoverability to be determined later on the merits, rather than to determine these issues on a certification motion, which is procedural in nature".

[57] While the decisions in Amyotrophic and Omarali addressed the role of the court in determining discoverability in the context of temporal limits on the class definition, the general principle cited above applies equally to determining whether the claim of a proposed representative plaintiff is statute-barred.

[58] Just as restricting the starting date of the class definition to the presumptive start of a statutory limitation period constitutes a substantive decision that no class members outside the presumptive limitation period could rely on the discoverability principle, so is a finding that a proposed representative plaintiff’s claim is statute-barred.

[59] Further, applying the approach in Amyotrophic and Omarali is consistent with the “some basis in fact" test which sets a low evidentiary standard for plaintiffs, and provides that a court should not resolve conflicting facts and evidence at the certification stage or opine on the strengths of the plaintiff's case. A certification hearing is not a mini-trial or summary judgment motion on the merits of the requirements under s. 5(1).

[60] Consequently, based on the general principles of certification and the discussion in Amyotrophic and Omarali on the limited role of the court to assess discoverability, I conclude that if the plaintiff can meet the “low evidentiary threshold” to establish some basis in fact to rebut the statutory presumption, the test under s. 5(1)(e) will be met.

The applicable threshold under s. 5(1)(e)

[61] Unlike the test under s. 5(1)(a) which is only based on the pleadings, a proposed representative plaintiff is required to establish some basis in fact for a cause of action in order to be an adequate representative plaintiff under s. 5(1)(e): see my analysis of the Ragoonanan principle at para. 192 of the Certification Decision.

[62] However, given the “low evidentiary threshold” under the “some basis in fact” test, the courts should only find that the s. 5(1)(e) test is not met when it is “definitively shown” on the evidence before the court that a proposed representative plaintiff’s claim is statute-barred.

[63] I rely on the following passage from Stone, at para. 10, which I also set out at para. 194 of the Certification Decision:

Where a representative plaintiff, for reasons personal to that plaintiff, is definitively shown as having no claim because of the expiry of a limitation period, he or she cannot be said to be a member of the proposed class. The continuation of the action in those circumstances would be inconsistent with the clear legislative requirement that the representative plaintiff be anchored in the proceeding as a class member, not simply a nominee with no stake in the potential outcome. [Emphasis added.]

[64] The requirement that a plaintiff must be “definitively shown as having no claim because of the expiry of a limitation period” set out in Stone does not reverse the onus on a plaintiff to provide some basis in fact to rebut the statutory presumption. In the Certification Decision, I found that Trivedi had not led any evidence to rebut the statutory presumption. On that basis alone, he would not have met the s. 5(1)(e) requirement.

[65] Trivedi’s cross-examination evidence summarized at para. 212 of the Certification Decision was a further basis on which to conclude that he “definitively” had no claim because of the expiry of a limitation period.

[66] Consequently, if a proposed representative plaintiff provides some basis in fact that the limitation period has not expired, the court should only find that the claim of the proposed representative plaintiff is statute-barred if the “definitively shown” test is met. That approach is consistent with (i) the “low evidentiary threshold” under the “some basis in fact” test and (ii) the "purposive and generous" approach to certification "to give effect to the goals of class actions; namely: (1) providing access to justice for litigants; (2) encouraging behaviour modification; and (3) promoting the efficient use of judicial resources": Price, at para. 81.

The law concerning discovery of ESL claims

[67] An employer is required to comply with the minimum standards under the ESL, which is an implied term of an employment agreement. I rely on the following legal principles which are set out in the Certification Decision:

(i) “[T]the minimum standards mandated by the ESA in respect of wages (including vacation pay, public holiday pay and overtime pay) are implied terms of the employment contract of the plaintiff”: Certification Decision, at para. 69, citing Kumar v. Sharp Business Forms Inc. (c.o.b. Bell Label Ticket & Tag), [2001] O.T.C. 326 (S.C.), at para. 36. (ii) “Resort to legal action may be ‘inappropriate’ in cases where the plaintiff is relying on the superior knowledge and expertise of the defendant, which often, although not exclusively, occurs in a professional relationship”: Certification Decision, at para. 103, citing Fresco v. Canadian Imperial Bank of Commerce, 2022 ONCA 115, 160 O.R. (3d) 173, at para. 99. (iii) A trial judge can find that a limitation period does not run for an ESL claim until the employee becomes aware of their entitlement: Certification Decision, at para. 105, citing Evangelista v. Number 7 Sales Ltd., 2008 ONCA 599, 240 O.A.C. 389, at paras. 45-46.

[68] Consequently, in the Certification Decision, I held that an employment contract could contain an implied representation of compliance with ESL, through “words and action” such as “pay slips”, without an express representation of compliance with ESL. I followed the approach of Belobaba J. in Omarali v. Just Energy Group Inc., 2016 ONSC 4094, leave to appeal ref'd, 2016 ONSC 7096 (Div. Ct.). At paras. 106-08 of the Certification Decision, I stated:

In Omarali (S.C.), Belobaba J. dismissed, at para. 65, the submission of the defendants to restrict the class to those persons employed as of May 4, 2013, two years before the statement of claim was issued on May 4, 2015. Belobaba J. held that representations of the employer as to independent contractor status could extend discoverability. He stated, at para. 66:

I am not persuaded that the class should be narrowed at this stage of the proceeding. The defendants may well prevail on the limitations point but more evidence on the issue of reasonable discoverability is needed, particularly where the defendants themselves were continually representing to the sales agents through words and actions (e.g. pay slips) that they were ICs and not employees. On these facts, I prefer to follow the case law as summarized in the leading text on class actions, that "the limitations issue should not be resolved on a pleadings motion or on a motion for certification." [Emphasis added.]

The Divisional Court approved Belobaba J.'s approach, noting that "[i]t was reasonable to leave the issues of time bars and discoverability to be determined later on the merits, rather than to determine these issues on a certification motion, which is procedural in nature": Omarali (Div. Ct.), at para. 6.

Consequently, even though a potential class member in Omarali would have known all the facts required to establish that they were entitled to ESL benefits as an employee, the implied misrepresentation of the employer that they had properly classified them as an independent contractor could allow potential class members to raise a discoverability issue to be determined after certification.

[69] Aviva General does not submit that it was not bound by ESL minimum obligations. An employer governed by the ESL must provide a minimum level of vacation and public holiday pay, based on salary and variable compensation.

[70] Rather, Aviva General submits (as does RBC IA) that “by providing P&C Advisors with at least 15 days of vacation, the total amount they receive as vacation and public holiday pay is greater than the amount the class members would have received if the defendants had limited the P&C Advisors to the two weeks of statutorily mandated vacation time and pay based on total compensation (salary and variable compensation)”: see para. 147 of the Certification Decision.

[71] As I discussed at paras. 149-66 of the Certification Decision, there is a basis in fact that the common issues court could reject the defendants’ calculation submissions and find that the plaintiffs were underpaid ESL vacation and public holiday pay.

Application of the law to Aviva General’s submission that Saroop has no cause of action because he did not recall reading the Compensation Policy

[72] Aviva General asks the court to find, on the basis of Saroop’s evidence that he did not recall reading the Compensation Policy, that (i) he did not read the document and (ii) as such, he has no cause of action because he cannot rely on a document he did not read. I do not agree.

[73] First, on the evidence before the court, there is some basis in fact that Saroop read the Compensation Policy. Given Saroop’s evidence that he (i) received compensation policies both as a P&C Advisor and as a Regional Manager, (ii) sent an email on October 26, 2016 about a discussion about the Compensation Policy, and (iii) discussed compensation policies “majorly around how much sales will get you, how many points, and eventually how much money we'll make”, a court could find that Saroop read the Compensation Policy.

[74] If a court found that Saroop read the Compensation Policy (which Aviva General does not submit), a court could find that, as in Evangelista, the limitation period did not begin to run until Saroop became aware of his ESL entitlement.

[75] Second, even if the court accepted Aviva General’s submission that Saroop did not read the Compensation Policy, this does not lead to the conclusion that his action is statute-barred, let alone a definitive finding to that effect.

[76] The result of Aviva General’s position is that it would not be bound to comply with ESL requirements if Saroop did not read the Compensation Policy. However, that result is inconsistent with the settled law that ESL requirements are an implied term of any employment agreement, unless the employer provides for benefits greater than those under the ESL.

[77] Saroop states in his affidavit that “I relied on Aviva’s representations to me that my pay was correct, and in accordance with local employment standards legislation”, a reliance he bases on having “received my pay from Aviva and understood that Aviva was representing that my pay was correct”. Consequently, Saroop states that “I had no conception that myself, or anyone else, was being underpaid vacation and holiday pay” and “I had no reason to believe that Aviva was incorrectly calculating my pay”.

[78] Similarly, as discussed at para. 43 above, Saroop answered a question taken under advisement by stating that “I understood that my employer represented to those working in sales that they respected all employment minimum standards and that they were paying vacation and holiday pay according to the applicable laws”.

[79] Saroop’s position in his answer to the undertaking is consistent with his affidavit evidence. He does not assert that he relied on an express representation from RBC General in the Compensation Policy that his vacation and public holiday pay complied with ESL. Instead, he states that he (i) relied on Aviva General complying with its ESL obligation to pay, at a minimum, ESL vacation and public holiday pay on both wages and variable compensation, and (ii) did not become aware of any concerns of any improper ESL treatment until the Certification Decision.

[80] It was only when asked about whether “someone in particular made representations to you, sir?” that Saroop responded to the question (initially taken under advisement) that “I received compensation policies every year from my employer”. A court could find that those compensation policies contained the implied term of ESL compliance.

[81] Aviva General provided no authority to suggest that an employer is not bound by a contractual term (implied or express) simply because an employee does not read it, even if I accept Aviva General’s submission that Saroop’s evidence that he did not recall reading the Compensation Policy can be inferred as an admission that he did not read it, which I do not accept as I discuss above.

[82] The present case is very different from that of Trivedi, whose action against Aviva General was statute-barred not because he read the Compensation Policy, but instead because he (i) understood that vacation and public holiday pay were not paid by RBC General on variable compensation, (ii) raised those concerns, and (iii) was not satisfied with the answers he received. Consequently, the court found that he had not provided a basis in fact to rebut the statutory presumption, given both the lack of any affidavit evidence as to discoverability and his cross-examination evidence.

[83] In the present case, even if a court found that Saroop did not read the Compensation Policy, it cannot be definitively found that his claim would be statute-barred. Consequently, I find that Saroop has established some basis in fact to rebut the statutory presumption.

Application of the law to Aviva General’s submission that Saroop has no cause of action because “[t]here is also ample reason to conclude that Mr. Saroop had personal knowledge that Mr. Trivedi and other P&C Advisors raised concerns about the payment of vacation and public holiday pay”

[84] I first review the evidentiary record before the court and then apply that evidence to the facts of the present case.

Evidentiary record before the court

[85] At paras. 31-43 above, I set out the evidence relied upon by the parties as to Saroop’s knowledge (or lack thereof) that Aviva General was not paying vacation and public holiday pay on variable compensation.

[86] In brief, Saroop relies on his evidence that he did not participate in any such discussions.

[87] Saroop’s affidavit evidence is unequivocal that he (i) never knew about any concerns that Aviva General (then RBC General) was improperly paying vacation and statutory pay and (ii) only learned of such concerns upon review of the Certification Decision. He stated so in his affidavit, as set out at paras. 31 and 32 above.

[88] When directly asked on cross-examination about Trivedi’s evidence of the branch meeting discussions, Saroop’s answer was unequivocal: “No. There were no such discussions, that I can tell you.”

[89] Saroop maintained throughout his cross-examination that (i) he “never knew how the [vacation and public holiday pay] is calculated”, (ii) he never “[had] occasion to explain to anyone how the compensation plan with respect to vacation and holiday pay worked”, and (iii) his “very first knowledge” that “personal vacation and holiday pay may not have been calculated properly” was “sometime after March [2023]”.

[90] Aviva General relies on Saroop’s cross-examination (summarized at paras. 40-41 above) where he stated that he “did not recall” discussions at branch meetings, instead of categorically denying them.

Application of the law to the evidence before the court

[91] Aviva General relies on Trivedi’s evidence that he and other P&C Advisors raised their complaints as to the vacation and public holiday pay at branch meetings. Aviva General submits that based on Trivedi’s evidence, and Saroop’s evidence that he does not recall such a discussion, the court should find that Saroop failed to rebut the statutory presumption. I do not agree.

[92] The issue before the court is whether, on a review of the evidence, the court can definitively find that Saroop knew of the discussions referred to by Trivedi, such that Saroop’s claim would be statute-barred. The evidence before the court does not meet that test.

[93] On a certification motion, the role of the court is to determine whether the procedural requirements under s. 5 have been met. The court is not to treat the certification motion as a motion for summary judgment or a mini-trial.

[94] Consequently, following the principles in Stone, if the proposed representative plaintiff leads evidence to provide some basis in fact to rebut the statutory presumption, the court should deny certification based on the expiry of a limitation period only if it is “definitively” satisfied that the claim of the proposed representative plaintiff is statute-barred: see para. 10 of Stone.

[95] In the Certification Decision, I reached the “definitive” conclusion required under Stone and held that Trivedi could not be the representative plaintiff because his claim was statute-barred.

[96] First, Trivedi led no evidence to rebut the statutory presumption. On that basis alone the test in Stone would have been met.

[97] Further, Trivedi’s cross-examination evidence provided additional support for the test in Stone. Trivedi’s evidence was that he understood that RBC General was not paying vacation and public holiday pay on variable compensation, raised those issues at branch meetings, and was not satisfied with the answers from RBC General. Such evidence “definitively” established that his claim was statute-barred, and that Trivedi failed to rebut the statutory presumption.

[98] In the present case, however, the evidence is not “definitive” that Saroop’s claim is statute-barred.

[99] Trivedi was not asked on his cross-examination for the certification motion whether Saroop participated in any of the conversations in which Trivedi or other P&C Advisors raised the concern that Aviva General or RBC IA was not paying vacation and public holiday pay based on variable compensation.

[100] Consequently, on the evidence before the court on the present motion, I agree with the plaintiffs’ submission that Aviva General cannot “now [ask] the Court to conclude that Mr. Saroop’s clear evidence that he did not have conversations disqualifies him from representing the class against Aviva”.

[101] If Trivedi’s discussions at branch meetings only took place with managers other than Saroop (which is a potential finding based on the evidence before the court), Saroop’s evidence that he had no such discussions (or did not recall such discussions) would be consistent with the evidence of Trivedi reviewed in the Certification Decision.

[102] More importantly, even if there was direct evidence before the court from Trivedi that he raised concerns about vacation and public holiday pay with Saroop, that would result in a genuine issue of credibility which should not be determined on a certification motion. On the facts as discussed above, the credibility issue would prevent the court from finding “definitively” that Saroop’s claim is statute-barred.

[103] On the evidence, I reject Aviva General’s submission that, simply because Saroop stated on some occasions that he did not recall certain discussions and on other occasions denied such discussions, I should definitively find that Saroop attended the meetings at which Trivedi raised his complaints.

[104] Further, some of the questions to which Saroop responded “I do not recall” related to more general discussions about compensation and did not relate directly to alleged discussions about whether the vacation and public holiday pay was not calculated on variable compensation.

[105] It is not sufficient to provide the court with a few examples of a witness responding “I do not recall” for a court to find that the conversations alleged by another party took place. The only direct evidence about purported discussions is from Saroop, who denies them unequivocally in his affidavit evidence and on numerous occasions during his cross-examination.

[106] In such circumstances, an answer of “I do not recall” cannot be elevated to an admission that Saroop knew that vacation and public holiday pay was not based on variable compensation. By agreeing with some questions from Aviva General’s counsel that Saroop did not recall certain discussions, Saroop has not abandoned the position he clearly stated, on numerous occasions, that such discussions did not occur.

[107] Aviva General asks the court to draw adverse inferences about Saroop’s knowledge since his counsel took numerous questions under advisement and then later answered several of them in writing, while maintaining certain refusals on privilege and relevance issues. I would not draw such an inference.

[108] Aviva General did not bring a motion to compel answers to the questions taken under advisement. Upon my review of the questions taken under advisement, I agree with the position of Saroop’s counsel that privilege could be claimed on many of the questions. While Saroop took the position in his affidavit evidence that he only learned of the improper vacation and public holiday pay after discussions with his counsel, such evidence did not “open the door” to all questions concerning communications between Class Counsel and their client.

[109] Further, many questions taken under advisement sought to restate earlier questions. The approach of Saroop’s counsel to take those questions under advisement, answer those which on review were not repetitive, and cross-reference answers to earlier questions, was generally appropriate.

[110] Consequently, I do not draw the adverse inference sought by Aviva General.

[111] In summary, Saroop’s situation is entirely different from that of Trivedi. In the Certification Decision, I held, at para. 213:

Consequently, there is no basis in fact for Trivedi to rebut the statutory presumption that his claim against Aviva General was statute-barred. Not only did Trivedi understand the terms of the Compensation Policy, but he also disagreed with it, believed it to be wrong, challenged it frequently, and did not accept the responses from RBC General and RBC IA.

[112] To the contrary, there is no definitive evidence to establish any of the same findings against Saroop.

[113] For the above reasons, I reject Aviva General’s submission.

Issue 2: The conflict of interest issue

[114] Aviva General submits that Saroop is not an adequate representative plaintiff since he is in a conflict of interest. I do not agree.

[115] A proposed representative plaintiff may have a conflict of interest if the representative plaintiff and the class members are “differently affected depending on what relief the plaintiffs sought”. However, if “they all will receive the benefits of the employment legislation”, there is generally no conflict of interest: Sondhi v. Deloitte Management Services LP, 2018 ONSC 271 at para. 82.

[116] Aviva General does not submit that any of the proposed class members would be differently affected by the common issues. All P&C Advisors will receive the benefits of the ESL if a court finds that the Compensation Policy does not meet the minimum requirements for vacation and public holiday pay.

[117] Instead, Aviva General submits that:

The fact that for all but one year of his employment during the class period Mr. Saroop was in a management position in which he received, and presumably responded to, complaints from proposed class members about their vacation and public holiday pay, puts him in a conflict of interest with those class members, who may assert that they relied on Mr. Saroop’s response (or lack of response) in not addressing their claims for vacation and public holiday pay.

[118] However, there is no evidence before the court that Saroop made any representations to P&C Advisors at meetings, let alone that P&C Advisors relied on such purported representations and might seek to raise such alleged reliance at individual trials to extend discoverability.

[119] The fact that Saroop became a manager is not sufficient, on its own, to raise any potential conflict. Without evidence of any P&C Advisor as to any representation by Saroop, and without evidence as to any reliance by P&C Advisors on such an alleged representation by Saroop, Aviva General’s position is hypothetical and speculative.

[120] Further, Trivedi’s cross-examination evidence for the certification hearing was that he was not satisfied with the answers he received and that he continued to take the position that the Compensation Policy did not comply with the ESL. Trivedi does not suggest any reliance on any statements made by branch managers, let alone lead any evidence of a specific representation allegedly made by Saroop.

[121] Consequently, Aviva General’s submission is not supported by the evidence.

Conclusion

[122] For the above reasons, I grant the motion for leave to amend the Claim, allow the Draft Claim to be filed with the registrar, and substitute Saroop as the representative plaintiff for the claim against Aviva General.

[123] If Saroop is found not to be an adequate representative plaintiff, I would exercise my discretion to allow a motion to appoint a new representative plaintiff for the claim against Aviva General. There is no basis to conclude that a representative plaintiff cannot be found.

[124] In effect, Aviva General asks the court to dismiss the action against it, even though the ESL claims of P&C Advisors may not be statute-barred under the principles of law discussed above. I find that it is not in the interests of justice to dismiss such claims of the P&C Advisors who worked under the Compensation Policy that allegedly ignored minimum ESL standards, without a final opportunity for Class Counsel to find a suitable representative plaintiff who can bring the issues before the court.

[125] Consequently, if Saroop is found not to be an adequate representative plaintiff, I would permit the plaintiff to bring a motion to substitute a different representative plaintiff within 120 days (or as otherwise scheduled at a case conference or on consent). If such a motion is required, the plaintiff can bring a preliminary motion for production of records to assist in locating a new representative plaintiff, and I will hear that preliminary motion.

Order and Costs

[126] For the reasons above, I grant the relief sought.

[127] As I discussed at para. 234 of the Certification Decision, there was divided success on the certification motion. By way of example, the present motion was necessary because I held in the Certification Decision that Trivedi was not an adequate representative plaintiff against Aviva General. Conversely, the plaintiff was successful on the present motion.

[128] If the parties cannot agree on the costs for the certification motion and the present motion on a collective basis, the court shall convene a case conference so that a process can be put into place to address any outstanding costs issues. Counsel shall update the court of the status of any costs discussions within 60 days of these Reasons.

GLUSTEIN J. Date: 20231129

COURT FILE NO.: CV-19-00618043-00CP DATE: 20231129

ONTARIO SUPERIOR COURT OF JUSTICE KABIR SINGH Plaintiff AND: RBC INSURANCE AGENCY LTD. and AVIVA GENERAL INSURANCE COMPANY Defendants

reasons for decision Glustein J. Released: November 29, 2023

Footnotes:

[1] As noted at footnote 3 of my reasons dated March 2, 2023 in Singh v. RBC Insurance Agency Ltd., 2023 ONSC 1439 (the Certification Decision), Aviva General advised at the certification hearing that on the current record, Aviva General would be responsible for any claims against RBC General during the pre-acquisition period.

[2] Unless otherwise stated, all statutory references are to the CPA.

[3] Singh commenced his proposed class action on April 12, 2019.

[4] Saroop was employed by RBC General until July 1, 2016, but as noted in footnote 1 above, Aviva General advised at the certification hearing that on the current record, it would be responsible for any claims against RBC General during the pre-acquisition period.

[5] At the present hearing, RBC IA adopted the submissions of Aviva General but did not file written submissions and made only brief oral submissions.

[6] Aviva General does not submit that the proposed litigation plan is unworkable. Consequently, their s. 5(1)(e) submissions are limited to the cause of action and conflict of interest issues discussed below.

[7] The cross-examination evidence set out in these Reasons was obtained from cross-examination by counsel for Aviva General unless otherwise noted to have been obtained in the brief cross-examination by counsel for RBC IA.

[8] In his cross-examination by counsel for RBC IA, Saroop advised that he did not resign from RBC IA to go to a competing insurance agency (as Bhaura stated in his affidavit) but instead worked at CIBC as a mortgage broker. That evidence is not relevant to the issues on the present motion.

[9] In his cross-examination by counsel for RBC IA, Saroop agreed that he had discussed the “compensation plan in detail during the team meeting” following the October 26, 2016 email, but Saroop was not asked by RBC IA counsel about the content of those discussions, which was addressed by counsel for Aviva General in his cross-examination of Saroop.

[10] As I set out at para. 12 above, the cause of action issues are based on (i) the purported failure of Saroop to read the Compensation Policy and (ii) Saroop’s alleged knowledge of the concerns expressed by Trivedi and other P&C Advisors about the Compensation Policy not providing for payment of vacation and public holiday pay based on variable compensation.