$2.5M class-action settlement gives private school teachers their due

By Paul Russell, LegalMatters Staff • While the gig economy is here to stay, that doesn’t mean employers can treat contract workers as regular employees without paying overtime or other amounts required by law, says Toronto employment labour lawyer Stephen Moreau.

“It is now increasingly commonplace for companies to use contract labour. With the gig economy – where people are hired to complete a focused task or ‘gig’ –  everyone is now a contractor, it seems” says Moreau, partner with Cavalluzzo LLP.

Working on contract offers some benefits to employees, he says, such as flexibility with hours and a degree of control over how much they work.

“However, the reality is that some of these gig jobs mask the reality that many contract workers are doing the work as regular employees, although not receiving the proper pay or benefits,” he tells LegalMattersCanada.ca.

Private school teachers receive large settlement

Moreau was recently successful in reaching a $2.5-million settlement in a class-action lawsuit involving teachers at Blyth Academy in Ontario, most of whom were paid as contractors with limited benefits, although they were providing regular teaching duties.

According to a Toronto Star article, the class-action settlement affects between 1,000 and 2,000 teachers who worked at the private school during four academic years from September 2015 to September 2019.

A former teacher who filed the suit in 2018 told the Star she regarded her job at Blyth as “precarious” because employees were treated as independent contractors without access to protections under the Employment Standards Act, including the right to a minimum wage, overtime, vacation and paid statutory holidays.

“Employers want control over how their workplace functions and they want to tell people what to do,” says Moreau. “And when employers do that, they create an employment relationship where they have obligations to meet, whether they are calling the workers ‘employees’ or something else.” 

During the time in question, a minority of teachers at the school were considered full-time employees, while the rest were treated as independent contractors, he says. In 2015, the teacher who initially filed the lawsuit was paid $7,000 for 10 weeks of teaching, which required 80 hours of work each week, including class preparation and other out-of-class tasks.

“If you look at the hours they work, teachers at the school weren’t even making minimum wage,” says Moreau. “You can fix that by topping up how much they are paid, or you can pay them for their actual hours of work.”

Many industries use contract workers unfairly

The settlement will compensate teachers for those overtime hours and other statutory minimums, and serve as a warning to others about properly classifying individuals according to their legal entitlements, he says.

“We know this sort of practice is very common in the private school field,” says Moreau, adding it is also a problem in other professions.

“There is ongoing litigation against some well-known companies, banks, investment firms, utilities, transportation providers, as well as accounting firms, who are under scrutiny for employing people but not calling them employees,” he says.

Anyone working on contract – but in essence doing the job of a regular employee for an extended period – should contact a labour lawyer for advice, Moreau recommends, especially if there is a possibility of bringing in others for a class-action suit.

“If you are in a gig job, there is a real possibility that your legal entitlements are not being properly met,” he says. “That is worth exploring with legal counsel.”

Along with agreeing to pay the $2.5-million settlement, Moreau says Blyth has agreed to take a new approach to staffing, ensuring that most of the teachers hired will be regular employees.

Employers can be urged to change behaviour

“Blyth is moving past the point of relying heavily on contractors,” he says. “It has also committed to changing its workplace structure so teachers are not required to work so much overtime.

“When you bring a class action, you have the potential to change an employer’s behaviour and the way they do business,” he adds.

Moreau acknowledges that while the settlement is a wake-up call to employers, the problem with undervaluing contract workers will persist.

“The gig economy is here to stay. Employers have bought into it, and so have some employees,” he says. “Whether they should or not is a philosophical question, but some people just think that is just the way it is.”

According to the Star article, teachers who taught at least one course at Blyth Academy may be eligible for compensation and can access documents and get other details at cavalluzzo.com.

Individual claims will be paid out on the basis of course load and teaching history, Moreau says, adding the settlement includes a $25,000 fund for teachers who worked prior to the 2015 academic term.