A class-action lawsuit by B.C. employees against their employer has been denied certification, with the court ruling that questions about common employer relationships typically require individualized analysis rather than class-wide determination.
The Supreme Court of British Columbia decision in Linza v. Metric Modular outlines important considerations for HR professionals and employment lawyers dealing with mass terminations and potential common employer liability.
Background of the case
B.L. applied to certify a class action against Triple M Housing Ltd. on behalf of approximately 100 employees whose indefinite term employment contracts with Triple M Modular Ltd. (operating as Metric Modular) were terminated between May and September 2020.
The plaintiff claimed the defendants operated as joint or common employers and were therefore jointly liable for damages stemming from the alleged wrongful dismissal of the class members. He also argued that termination clauses in their employment contracts were void for breaching the B.C. Employment Standards Act.
Common employer determination requires individual assessment
The court found that determining whether a common employer relationship exists cannot be addressed on a class-wide basis, as it requires examination of each employee’s individual circumstances.
“Whether an employment contract was formed involves the manifest objective intentions of the employee and the alleged employer in all the relevant circumstances,” the court explained. “The objective evaluation is applied to the individual circumstances and representations made to each particular employee.”
The decision highlights that each employee’s awareness of alleged representations would differ, making individual trials inevitable: “Housing would be entitled to question each employee as to their knowledge of the alleged circumstances and representations… as well as all the other potentially relevant circumstances which might inform that determination.”
These inquiries would extend to “each employee’s job title and duties, what may have been said to the employee at hiring and during the employment, whether the employee read the employment contract… who paid the employee, any interactions with representatives of Housing, and any involvement with the business of Housing.”
Termination clause analysis
The plaintiff argued that the employment contracts’ termination clauses were void because they:
- Impermissibly extended the probationary period
- Expanded the scope of just cause for termination
- Restricted group termination entitlements
- Allowed for improper calculation of termination pay
The court found that most of these claims could proceed, with the exception of the fourth claim, which was struck as “bound to fail” based on a plain reading of the termination clause.
The termination clause in question stated: “The Employer may terminate an Employee’s employment without just cause, and will fully discharge its severance obligations by providing such Employee with the statutory notice and/or pay in lieu of notice (at the Employer’s discretion), pursuant to the provisions of the BC Employment Standards Act, as amended from time to time.”
Class proceedings not the “preferable procedure”
While the court identified some valid common issues—including whether the termination clause was void and whether employees were terminated without cause—it ruled that a class proceeding was not the “preferable procedure” under the Class Proceedings Act.
The court determined that “the limited common issues do not predominate, will not establish liability, and will simply be the beginning of approximately 100 individual trials that would be more practically and efficiently addressed by separate actions.”
Critical to this finding was that the common employer question—the most important issue as it determines liability—would require individualized analysis for each class member.
“Resolution of the common issues in favour of the proposed class will simply serve as the beginning of approximately 100 individual trials on liability, being the common employer issue, and possibly… a full damages trial for wrongful dismissal,” the court stated.
Implications for employment class actions
The decision illustrates the challenges in certifying employment-related class actions, particularly those involving common employer allegations.
The court noted that while class actions can allow for cost-sharing among plaintiffs, “that sharing becomes illusory if the litigation turns into, as it must in this case, individual trials for each class member.”
The decision emphasized that judicial economy would not be achieved because “although approximately 100 actions would not have to be commenced, there would be 100 individual assessments on liability, and possibly on damages… There are little, if any, savings.”
The ruling suggests that employment relationships often involve individualized circumstances that make them poorly suited for class proceedings, even when there are some common issues among the proposed class members.
For HR professionals and employment lawyers, the case reinforces that the common employer doctrine requires careful examination of individual employment relationships rather than broad, categorical assessments.
The court ultimately found that “the preferable procedure is individual claims, whether in the Supreme Court or in the Provincial Court,” suggesting that employees with potential common employer claims may be better served pursuing individual actions.
For more information, see Linza v Metric Modular, 2025 BCSC 646 (CanLII).
