Barrie Lawyers Discuss: Overtime Pay & Managerial Employees

Summary Authors: Antonio Meringolo – Littlejohn Barristers 

Ernewein v. Honda Canada 2017 ONSC 1181

Heard: January 5, 2017

Decision Released: February 17, 2017

Plaintiff: Marc Lemieux
Defendant: G. McGinnis

This is a motion for summary judgment in the context of a wrongful termination action seeking damages for retroactive overtime pay. 

This Plaintiff’s action for wrongful termination is seeking, among other damages, retroactive overtime pay from May 5, 1997 to March 7, 2012. Honda denies his claim on the basis that the retroactive overtime pay is statute bared by the Limitations Act, 2002, S.O. 2002 c. 24 Sched B. and argues that there is no genuine issue for trial as this Plaintiff’s position entailed supervisory job duties dis-entitling him from overtime pay under the Employment Standards Act. Honda brought this motion for summary judgment. They argued that this Plaintiff failed to meet the onus to establish why the two-year limitation period should not be applied to the time the Statement of Claim was issued. Honda further argued that their employment policy with respect to overtime pay was open and obvious, that this Plaintiff was aware of it and paid according to it. Honda argued that this Plaintiff took no steps whatsoever to ascertain whether he had a claim for overtime pay prior to being terminated.

This Plaintiff, prior to the motion, responded by bringing a cross motion for production of a ‘termination review document’, productions of the complete employment file for the retroactive overtime pay period and leave to amend the Statement of Claim to plead reasonable foreseeability and fraudulent concealment.

This Plaintiff argued that Honda concealed from him the availability of overtime pay. It was only after he was terminated that he did learn of his claim for overtime pay. This Plaintiff argued that Honda misrepresented the material facts with respect to his eligibility for overtime pay according to the Honda’s overtime policy. He had no reason to suspect that he was being treated improperly or incorrectly. This Plaintiff argued that despite his job title, he was performing non-supervisory tasks on a regular basis such that he was eligible, for the retroactive period in question, to receive overtime pay under the Employment Standards Act, Exemptions, Special Rules and Establishment of Minimum Wage, O. Reg 285/01 [7].

Di Tomaso J., held at [58] that:

Mr. Ernewein … relied on what Honda told him about his overtime pay. He had no reason to believe that Honda was wrong and there was nothing that would cause him to exercise due diligence in respect of any entitlement for overtime pay pursuant to the provisions of the applicable employment standards legislation. I agree that he only became aware of his potential claim for retroactive overtime pay after his employment was terminated on August 8, 2013. He acted expeditiously thereafter. He issued his Statement of Claim on March 7, 2014, at which time he asserted his claim for overtime pay going back to May 5, 1997, the date of his promotion.

Therefore, Honda’s motion for summary judgment was wholly unsuccessful and dismissed by Di Tomaso J.

With respect to the cross motion, this plaintiff sought among other things, production of a termination review document used by Honda in a meeting on August 8, 2013, by Honda’s senior management and in-house lawyer, to discuss the outcome of their investigation into this plaintiff’s alleged misconduct.

Honda objects to production of this document on the basis of solicitor-client privilege and that this document was prepared for the dominant purpose of contemplated litigation. This Plaintiff takes the position that the ‘termination review document’ was not prepared for the dominant purpose of seeking legal advice. Rather, this document was prepared primarily for the senior management team as information necessary for management to carry out a disciplinary function. While the document was provided to in-house counsel in addition to the senior management team, nevertheless, this document was not prepared for the dominant purpose of litigation.

Di Tomaso J., held at [75] that:

I find that the Termination Review Document was prepared primarily for the senior management team as information necessary for management to carry out a disciplinary function. Providing a copy of the Termination Review Document for in-house counsel in addition to the senior management team does not clothe that document with solicitor-client privilege.

In this regard, Master Short in Humberplex Developments Inc., v. StransCanada Pipelines Ltd held “an operational communication cannot be cloaked with privilege by copying it to a lawyer.” Master Short added that “if the document was prepared for purposes of simultaneous review by legal and non-legal personnel, it cannot be said that the primary purpose of the document is to secure legal advice and no privilege may be maintained at this stage.”

Di Tomaso J., pointed out that the ‘termination review document’ used by Honda at their investigative meeting, was prepared before a decision was made to terminate the employment of this Plaintiff.

With respect to the amendment issue on the cross motion, Di Tomaso J., granted leave for this Plaintiff to amend the Statement of Claim in order to specifically plead the doctrines of reasonable discoverability and fraudulent concealment.

With respect to the productions issue on the cross motion, Di Tomaso J., ordered that Honda produce records from January 1, 1997 to March 13, 2011, such that it is required to assist this Plaintiff in quantifying the retroactive damages for this claim.

It is important to note that Di Tomaso J., reiterated at [59] that:

I make no findings as to whether or not Mr. Ernewein is entitled to his overtime pay claim. That issue is not for me to decide. However, what is clear is that there is an issue of fact and credibility relating to the discoverability of Mr. Ernewein’s proposed claim. At the heart of this summary judgment motion is a factual dispute as to whether Mr. Ernewein, with reasonable due diligence, could have discovered his proposed claim against Honda, based on Honda’s policy, conduct, or documents received from Honda by Mr. Ernewein. I find that this is an issue that ought to be decided by the trial judge. Specifically, whether Mr. Ernewein’s claim for retroactive overtime is statute-barred is a genuine issue for trial.

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