Temporary workers from the Philippines who worked at Denny’s restaurants in B.C. have won a settlement worth $1.4million that is the first of its kind in Canada.
A group of temporary workers from the Philippines who worked as cooks and servers at Denny’s restaurants in B.C. have won a settlement worth $1.425 million that is the first of its kind in Canada.
The BC Supreme Court approved the settlement because Denny’s failed to honour its contracts with the workers. This included offering them less than a full week of work, not paying overtime pay and failing to reimburse them for agency fees and airfare to Canada.
The judgement which was released May19, caps a two-year battle by the 77 workers to have the terms of their employment contracts honoured. It is the first case in Canada where contract workers have launched such an action. They are typically reluctant to take legal action for fear of reprisal by their employers.
Denny’s brought the workers to Canada under the Temporary Foreign Workers Program (TFWP) beginning in 2006. The federal program lets employers hire workers for up to 24 months to provide labour in areas where there are shortages.
In some cases, work permits can be renewed and workers may apply for permanent resident status.
The case began when Alfredo Sales was fired in August 2010, a week after he filed a claim with the British Columbia Employment Standards branch seeking repayment from Denny’s for his airfare.
It became apparent to Sales’ Vancouver lawyer Charles Gordon that other Denny’s employees were in a similar situation. Gordon, a partner with Glavin Gordon Clements, launched a class action on behalf of 77 workers in January 2011 suing Denny’s western Canada parent Northland Properties.
“Many of these people were still working for Denny’s so they never would have gone to court on their own. That’s why a class action made sense,” Gordon says.
The first hurdle was certification of the class action. This involved getting permission from the B.C. Supreme Court to have all the claims dealt with at the same time.
If the class action had not been certified, each employee would have had to bring a separate case. Certification also tends to benefit plaintiffs as it brings pressure for the action to be settled before trial.
Madam Justice Shelley Fitzpatrick agreed to the certification in March, 2012
Documents filed with the Court revealed that the workers had contracts which guaranteed either 37.5 or 40 hours a week of work, but they frequently did not get that many hours. Also, when they worked overtime, they were not paid at the overtime rate.
Nor were the workers reimbursed for their flights from the Philippines to Canada as promised, a cost of about $1,000 per person. In addition, an agency retained by Denny’s charged applicants agency fees prohibited by the province’s Employment Standards Act of $5,000 to $6,000 per person.
A year after the certification, Denny’s agreed to a settlement. Although 19 of the original 77 people dropped out before the case settled, the judge decided to include them because of the way the company treated them.
About $850,000 of the settlement was earmarked for the wages and fees. The rest was for arbitration, auditing and legal fees plus several court ordered charitable donations to worker support groups.
To date, each class member has received about $7,000 representing the agency fee plus airfare, even if they are no longer working or residing in Canada. The rest will be paid when a court-appointed auditor reviews Denny’s payroll records to determine how much is owed to each plaintiff.
It is expected that these amounts will be paid to class members within the next few months, says Gordon. He also says that the case sends a powerful message to both employers and temporary foreign workers.
“If employers are not living up to the terms of their employment contract, there is a way that workers can pursue them.”