Court Certifies Class Action Against eHealth by Employees

The Court recently released its decision on a certification motion of a class action, Perrenoud v. eHealth Ontario.  Employees are suing eHealth because of its decision last year to suspend performance bonuses and merit-based pay raises.  It's a case of the clash between politics and contract law.

In May 2011, the Toronto Star broke a story that eHealth was still giving bonuses and pay raises despite a broader government salary freeze.  eHealth promptly announced that it was killing the bonuses and pay raises.

This can be difficult, particularly when you've already told the employees exactly how much they're going to be getting, as eHealth had in this case.  So a couple of eHealth's employees hired a lawyer and filed a class action, making four allegations:

1. eHealth breached their contracts by cancelling the bonuses payable in 2011;
2. eHealth breached their contracts by cancelling the bonuses payable in 2012;
3. eHealth breached their contracts by cancelling the merit-based pay raises in 2011; and
4. The Province was liable for inducing breach of contract.

The claim against the Province failed, because the judge found that the Minister of Health telling eHealth to reconsider its position doesn't rise to the level needed for that particular tort, but the other three claims are arguable, so the judge certified the class action.

It's interesting to watch class actions in the employment context.  This isn't the first, but they are rare, and inspire a certain caution for prudent employers establishing or changing policies, particularly regarding remuneration.

*****

This blog is not intended to and does not provide legal advice to any person in respect of any particular legal issue, and does not create a solicitor-client relationship with any readers, but rather provides general legal information. If you have a legal issue or possible legal issue, contact a lawyer.