Ontario temp agency being sued $800M for ‘shortchanging employees on vacation and public holiday pay’

TORONTO – An Ontario temp agency is being sued for what a class action law suit claims they shortchanged temporary workers out of vacation and public holiday pay.

Monkhouse Law is seeking to certify an $800-million class action against Procom Consultant Group, a temporary placement agency. The action will test the real-world applicability of a decade-old Ontario employment law, which states that those working through temporary placement agencies are in fact employees of the placement agency and entitled to overtime, vacation and holiday pay.

“In 2009, Ontario passed an amendment to the Employment Standards Act (ESA) which states that people working for temporary help agencies are employees, but it appears that Procom, one of the largest, has not changed its practices,” said Andrew Monkhouse, founder of Monkhouse Law.

“Even today, 11 years after these rules were passed, those working through temporary help agencies generally do not get their statutory employment entitlements.”

Although Ontario law specifically says that temporary placement agencies must treat workers as employees the claim alleges that Procom Consultant Group has ignored this law for a decade, says the law firm.

statement of claim has been filed in the Ontario Superior Court of Justice to certify the lawsuit. It has been filed on behalf of individuals who were assigned work as independent contractors by Procom, Canada’s largest temporary placement agency, from 2009.

In the suggested representative case Anna Brown was assigned to the Ministry of Transportation as an IT consultant. She worked alongside full-time employees and also worked overtime but did not receive extra pay, nor benefits.

The suit alleges that the company violated employment laws by claiming that Anna Brown and other workers were independent contractors when the law clearly states that they must be counted as employees.

According to the statement, Anna Brown and others like her were assigned to work for clients and had to sign a contract stating they were independent contractors. Procom also prohibited them from entering into employment agreements with the client companies where they’d been placed. Their contracts attempt to even state that if they are found to be employees that the employees themselves will have to pay any damages, something Andrew Monkhouse says appears to be reprisal for starting a claim, invalid under Ontario law. The suit alleges the supervision and control imposed on them created an employment relationship with Procom. 

Under the ESA, a temporary placement agency is a worker’s employer when the person is assigned to do work on a temporary basis for a client, and the worker is entitled to holiday and overtime pay. The law was modified in 2009 to provide that those working for temporary help agencies are employees and entitled to minimum statutory protections.

During debate in the  Legislature, MPs stated, “You have governments and employers in general that are trying to find ways around the legality of the law, and they have found one in the temporary employment agencies. The same way that governments, both federally and, I believe, provincially as well, used to use casual employment, you now have companies in the government and the private sector using the same thing with casual employees. The loophole needs to be closed … .”

The lawsuit alleges that workers relied on Procom to advise them properly regarding their employee status and eligibility for vacation, public holiday and overtime pay, but the company failed in its statutory duties by incorrectly informing workers they were not employees of the firm. Allegations in the statement of claim must still be proven in court. 

Here is the full statement.

“Procom knew or ought to have known that the workers were being placed in temporary positions under the guise of being independent contractors,” Monkhouse said. “It’s a classic example of people being told they are contract workers and losing the protections of being employees.”

The suit alleges that Procom acted in a callous manner by not resolving the issue when it came to light and that the company also attempted to avoid paying back-wages to the affected employees.

The Ontario Labour Relations Board (OLRB) has already ruled against Procom in a similar scenario. The company had sought to have a claim for wages rescinded from a consultant because Procom  had entered into a contract for service and therefore the individual was not a temporary employee. However, the OLRB ruled the individual was an employee and therefore was owed wages.

The class action is the sixth filed by Monkhouse Law against a Canadian company for shortchanging employees on vacation and public holiday pay. Class actions were previously filed against the Approval TeamBank of MontrealRBC Insurance Agency Ltd. and Aviva Insurance Co., RBC Life Insurance Co., and Medcan Health Management Inc.

Former Procom employees can have a confidential conversation about the class action by contacting Alexandra Monkhouse at 416-907-9249 ext. 211 or Individuals can also submit their information on the Monkhouse Law website to be sent updates on the case.

Toronto-based Monkhouse Law is an employment law firm that specializes in: wrongful dismissal, human rights law, labour law, employment insurance claims, and denied long-term disability claims. Monkhouse Law has a strong history of representing employees in class actions, including having started the first Canadian contractor misclassification case of Sondhi v. Deloitte in 2015 and having successfully certified an employee misclassification class action for solar panel sales representatives in 2019.

Dana Tentis photo

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