It is well known that in Ontario, there is a two-year limitation period for commencing a claim. However, as I wrote about previously, there are some exceptions and limits, so you cannot assume that any claim commenced after more than two years will be statute-barred.
One such limit is based on “discoverability”. Section 4 of the Limitations Act, 2002 provides that the two year period begins to run on “the day on which the claim was discovered.” A claim is “discovered” on the day that the person with the claim knew or ought to have known the facts giving rise to the claim, and this is not always the same as the day that the events occurred.
Pursuant to section 5(2) of the Limitations Act, 2002, a person is presumed to have known the facts giving rise to the claim on the day that the facts arose, unless the contrary is proved. Therefore, an employee who commences a claim based on facts that occurred more than two years earlier would have the burden of proving that they did not know or ought to have known of these facts until some time after the facts occurred.
The Courts have held that in an employee’s wrongful dismissal claim, the two-year limitation period begins to run on the date that the employer dismisses the employee without reasonable notice. However, in the context of different types of employment law claims, the date it is “discovered” can be long after the date that the events took place.
Mischaracterization of an Employee as an Independent Contractor
The recent decision of Brown v. Procom Consultants Group Ltd. concerned a class action claiming that a group of employees were mischaracterized as independent contractors, and were therefore entitled to payments required under the Employment Standards Act, 2000 (the “ESA”), including vacation pay, public holiday pay and overtime pay. The defendant sought to advance the argument that the claims were statute-barred as the employees had been classified as independent contractors and had not been receiving the ESA payments for more than two years before the claim was brought.
In that case, the proposed representative plaintiff admitted that during her time working for the company, and for more than two years before the claim was commenced, she was aware of the following facts:
- she was treated as an independent contractor, not an employee;
- she did not have the ability to work for other clients during the contract;
- she was told when and where to perform her work duties;
- she was required to obey direction from her superiors;
- she had standard hours of work;
- she did not receive public holiday or premium pay;
- she did not receive vacation pay; and
- she had colleagues who were sometimes required or allowed to work more than the ESA overtime threshold without overtime pay.
Based on the above facts, it appeared that the proposed representative plaintiff knew of the facts giving rise to her claim for more than two years before her claim was commenced. However, the Court sided against the defendant on that issue. The Court found:
“it is arguable that an employer’s representation that the worker is an independent contractor is sufficient to delay discoverability until the worker can reasonably know that he or she has been misclassified”.
In other words, the fact that the company told the employees that they were properly characterized as independent contractors may be enough to delay the date in which the employees “knew or ought to have known” that they were actually employees. This is especially true where an employee is reasonably relying on the superior knowledge of the employer.
Accordingly, the Court allowed the claim to proceed. It should be noted that the decision was with respect to a preliminary motion (in this case, a motion to substitute the representative plaintiff in the proposed class action), so no final decision was made on the issue of discovery or the limitation period. However, the Court found that the claim was “tenable” and should not be dismissed at an early stage based on the limitation period.
Other Types of Employment Law Cases
Similar reasoning has been applied in other types of employment law cases. In the Court of Appeal decision of Evangelista v. Number 7 Sales Limited, the Court upheld an award of public holiday and vacation pay going back to 1996, despite that the lawsuit was not commenced until 2004. The trial judge found that the employee was not aware of his entitlement to vacation or public holiday pay before 2003 – the first time the employer paid it to him. Therefore, the Court agreed that the two-year limitation period did not begin to run until 2003.
Further, in the case of Fernandes v Goveas, 2016 ONSC 1992, a live-in caregiver and housekeeper was awarded damages for underpayment of her salary and overtime for the entirety of her nine years of employment. The Court found that in the specific circumstances of the case, it was reasonable for the employee to not have discovered her claim until after her employment ended.
The law surrounding limitation periods is not always straightforward, and it is best to retain a lawyer to deal with those issues. If you are an employee, we can help determine if you have a tenable claim and help take steps to secure your rights.
If you are an employer, we can assist you in responding to a claim that may be out of time and statute barred.
If you have any questions about your situation or if you would like to get legal advice, please feel free to contact us.