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Recently, GoodLife Fitness Centres Inc. (“GoodLife”) reached a $7.5 million settlement through mediation with its current and former non-management employees. The settlement includes payment for preparation and administrative work, overtime at time-and-a-half instead of straight time, and implementing a new record-keeping system, and can be broken down as follows:
• $5.5 million to personal trainers who worked from Oct. 12, 2014 to Dec. 31, 2017;
• $1.05 million to other non-managerial staff who worked from Oct. 12, 2014 to Feb. 28, 2018;
• $800,000 for fitness advisers, who worked from Oct. 12, 2014 to Feb. 28, 2018; and
• $150,000 for club opening specialists who worked from Oct. 12, 2014 to March 30, 2017.
In addition, GoodLife will pay the cost of the mediation and $1 million in legal fees. The settlement is scheduled and expected to be approved in court, in June 2018. As of this blog post the case has not officially settled because that requires court approval, or certified for the purpose of settlement. However, the settlement looks to be a relatively fair one for each side and so is quite likely to be approved.
In October 2016, a $75 million class action was filed for unpaid wages (including overtime) against GoodLife in Ontario. This action was eventually expanded across Canada, and the settlement also applies to workers in British Columbia, Alberta, Saskatchewan, Manitoba, New Brunswick, Newfoundland, Nova Scotia, and Prince Edward Island. It does not include Fit4Less workers, or personal trainers at GoodLife clubs in Toronto, Ajax, and Peterborough for the period from December 5, 2017 onward.
This settlement happens at a time when several Canadian employers have found themselves defending class action claims that seek substantial sums of money in unpaid overtime. In March 2015, for example, Deloitte LLP was hit with a $384 million class action on behalf of at least 418 lawyers who worked at a document-review company, ATD Inc., that Deloitte had acquired the previous year. The class claimed that they were improperly classified as contractors rather than employees of the company and sued for unpaid overtime, vacation and statutory holiday pay. The class was certified on January 16, 2018, and the lawsuit remains underway.
In sum, it is apparent that employers today face potentially significant exposure for underpaying or withholding pay for work performed or overtime hours worked, and violating statutory overtime provisions and overtime policies. Employers would be wise to implement clear overtime policies and accurate record keeping systems for all hours worked by their employees.
About the Author: Miguel Mangalindan is an associate lawyer at Monkhouse Law where he practices Employment, Human Rights and Disability Insurance Law.
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