Class action against BMO over vacation, holiday pay ‘provisionally’ certified by B.C. court

First Canadian Place in downtown Toronto, the headquarters of the Bank of Montreal. Photo: Linus Belanger/Unsplash

In February 2020, Paul Cheetham, a Vancouver-based former private wealth consultant at the Bank of Montreal (BMO), launched a class action lawsuit against the banking giant, challenging its payment structures concerning vacation and holiday pay.

Now, the Supreme Court of British Columbia has ruled that Cheetham is a suitable representative for the class, that his claim for breach of contract meets the criteria under the Class Proceedings Act (CPA) and that a class proceeding is the preferable procedure for this action.

Andrew Monkhouse, an employment lawyer and founder of Monkhouse Law who acted as counsel for the plaintiff along with Alexandra Monkhouse, called the decision “groundbreaking.”

“We were able to provisionally certify a national class action on behalf of many employees at BMO who have been allegedly denied vacation and holiday pay contrary to their contracts,” Monkhouse wrote in a LinkedIn post.

“The law on this area is quite complex and Justice Shergill produced a great decision after the 6 days of hearing that we had. This case is a big win for workers who can now have their day in court to argue that they were short changed their employment standards.”

Background

Cheetham, who earned a base salary in addition to commissions and bonuses based on his performance at BMO, claims that the bank owes him vacation and holiday pay. However, BMO counters that the variable compensation he received already accounted for such entitlements.

The crux of this legal battle centers around the Canada Labour Code (CLC). While BMO acknowledges that the CLC necessitates the payment of vacation and holiday allowances, it insists that these entitlements were embedded within the variable compensation offered to its employees.

Cheetham is seeking to be the spokesperson for a class of non-unionized employees, specifically those who held positions as either a Private Wealth Consultant (PWC) or a Mortgage Specialist (MS) with BMO from Jan. 1, 2010. These individuals, grouped under the term “Variable Compensation Employee”, are part of the lawsuit to demand what they believe to be their rightfully owed vacation and holiday compensations.

BMO has mounted a defense against the class action certification, stating that:

  1. The claims for unpaid employment benefits fall outside the jurisdiction of this Court.
  2. The claims from each class member are unique, making it impossible to provide a singular answer applicable to the entire class.
  3. Even if certification isn’t granted, the CLC already provides a means for aggrieved employees to seek redress.

The ruling

While stating it was satisfied that Cheetham is a suitable representative, and that a class proceeding is the preferable action. the court said the plaintiff must address several key concerns.

First, it needed to be amended to account for an email from Aug. 30, 2017. That email advised all PWCs that their total cash compensation, effective fiscal 2009, adhered to the CLC.

“This email provides some evidentiary basis that BMO had contracted with all PWCs that it would pay vacation pay under Part III of the CLC, from 2009 onwards to at least 2017,” the court said.

Second, the claim for breach of the duty of good faith must be amended as per paragraphs 126 through 134 of the court’s reasons to satisfy the requirements of s. 4(1)(a) of the CPA.

There was also commentary about common issues that need to be revised to meet the requirements of s. 4(1)(c) of the CPA.

Both parties are expected to reconvene for a subsequent hearing to establish timelines for submissions and to map out the forthcoming steps in this lawsuit.

For more information, see Cheetham v Bank of Montreal, 2023 BCSC 1319 (CanLII)

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