Employment Law Author: J. Geoffrey Howard A story editor who worked on a season of well-known “unscripted” series entitled “Property Brothers” has filed a class action asserting that she and other production professionals working for industry giant Cineflix as contractors were legally employees.  Lead Plaintiff Anna Bourque and her law firm assert that Cineflix and all of its production companies are one “common employer” and that the workers were employees and thus owed millions in back wages, overtime pay, vacation and statutory holiday pay and employer Canada Pension Plan contributions. This is the first time a Canadian content producer has been hit with a class action.  If the court first agrees Bourque can sue on behalf of all the workers and then upholds her claim that they were employees and thus entitled to back wages under the Employment Standards Act, Cineflix will be hit with a massive retroactive wage bill. The lawsuit is not without its challenges, however.  Cineflix can be expected to vigorously defend the claim, including by asserting:
  1. each of its production companies is a separate employer and Cineflix the parent company is not liable for their alleged wages;
  2. the status and claims of each worker are too diverse and should not be mass adjudicated in a class action;
  3. the workers were not legally employees but, in fact, true contractors. Certainly many were admittedly billing through companies and many had other clients before, during and after working for a Cineflix production—strong factors favouring contractor status;
  4. even if they were employees, the workers may be exempt from some Employment Standards Act entitlements such as overtime or not have qualified for others such as stat premium pay.
Meanwhile, some Cineflix workers may oppose the class action which, if successful, would jeopardize their tax status as self-employed contractors entitled to deduct a broader range of expenses than employees. If declared to be employees as requested in the lawsuit, they could end up being reassessed by CRA and ordered to pay thousands of dollars in additional income tax. Given the potential threat of more class actions other major production companies need to review their engagement and pay practises with contractors to ensure those paid as contractors truly meet the legal test.  Those hiring production workers in B.C. will be relieved to know that under a B.C. Court of Appeal decision, workers are not able to sue in the courts to enforce the B.C. Employment Standards Act, unlike Ontario employees.  Although a lead claimant or law firm might try to orchestrate mass ESA claim filings in B.C. instead of a class action in the courts, the B.C. ESA only permits wage claims to be filed within 6 months of termination and only for wages earned going back 6 months, making each claim relatively modest. Whether or not any specific person working on your project is an employee or an independent contractor is determined through context specific analyses and the application of a nuanced legal test.  Referring to someone as an ‘independent contractor’ in your services agreement will not on its own be determinative, or protect you from liability for payroll taxes and related penalties if it is found they were in fact an employee. To better understand your organization’s exposure to these claims and how to structure your engagements of contractor production workers to reduce this risk, you can contact me at: J. Geoffrey Howard; ghoward@meplaw.ca; 604 891-1184 or contact: Arthur Evrensel; aevrensel@meplaw.ca; 604 891-1157