As it stands, Ontario's Ministry of Labour (MOL) has an enforcement problem. In recent years, they have conducted far fewer workplace investigations. While 22,434 were conducted in 2018-2019, between then and now, the figure has sat between 8,807 and 18,965.
This is not due to a decrease in the workforce or an increase in unionization (labour law sits outside the class action regime). Ontario's labour force increased by 12.5% between 2019 and 2025; the percentage of unionized workers increased by just 1.53% during that same period.
The private class action bar has stepped in to fill the gap. In 2020 and 2021, particularly low MOL investigation figures coincided with especially high numbers of employment class action filings; 18,965 investigations coincided with 6 filings, 11,200 with 15, and 8,807 with 8. The MOL is slowly recovering, and the number of employment class actions is stabilizing to a rate of 0 to 4 annually.
The last few years have shown the importance of a robust class actions regime to facilitate access to justice for workers (and behaviour modification for employers), especially in the face of disruptions to government services.
However, class proceedings are inherently risky and increasingly costly to litigate. If a potential payout is too small, certain groups of workers are left without access to justice. The effect is that workers at small and medium-sized workplaces have been disproportionately burdened by the MOL's shortcomings.
The solution may lie in one of two potential reforms:
- A selective no-costs or costs-subsidized regime.
- A provincial ombudsman.
Selective No-Costs or Costs-Subsidized Regimes
The LSO's 2019 Report for Class Action Reform sounded the alarm that Ontario's two-way costs regime has had a chilling effect on plaintiff claims. In order to promote access to justice, certain jurisdictions have a modified no costs program. In British Columbia, Manitoba, and Newfoundland and Labrador, save for vexatious cases, there are no adverse costs at any stage after and including certification. The Federal Court’s system is even more plaintiff friendly, as there are generally no adverse costs during class proceedings.
In an employment context, there is a structural imbalance in resources; an unorganized group of workers is at a disadvantage against an employer who controls their livelihood and work conditions. This impact is compounded by the fact that most of Canada's private sector employees don't work for large corporations; combined, small and medium businesses employ 63.63% of them. Smaller groups of workers are less economically viable to represent and are often less able to amass the resources needed to conduct complex class action litigation.
No Costs or Modified Costs
Creating an adverse costs exception or modified costs rule in an employment context would address this imbalance. Under the latter reform, courts would compare the employer's assets to the estimated size of the class and median income of class members in assessing costs. This would help standardize the risk assessment of class actions and increase certainty for both sides of the bar.
This reform is not unprecedented. Since 2018, employment class actions in England have been heard on a no costs basis at the Employment Tribunal. This is an exception to the rule; adverse costs are generally awarded in other types of English class actions. This change led to a 344% increase in claims and was moderated by a bar on vexatious litigation.
Cost Indemnity Fund
A final variation could be the creation of a cost indemnity fund paid for jointly by workers and employers.
The idea is that when employment class actions fail, this fund could be accessed by plaintiff counsel to minimize risk. It would, in effect, be a social safety net for vulnerable employees who want to attempt to enforce their rights, funded in a way akin to EI or the CPP. The one structural difference is that it would serve an access to justice function.
A Provincial Ombudsman
A provincial Ombudsman could be tasked with prosecuting class actions on behalf of employees. Similar institutions exist in countries such as Sweden and Finland.
In Sweden, two government agencies can bring forward class actions: the Consumer Ombudsman (CO) and the Environmental Protection Agency (EPA). They must prove that either a) a private group or organisation is not likely to bring the action or b) there is a particular public interest in starting a group action. The CO and EPA are personally immune to adverse costs; if costs are ordered, the state foots the bill, not the agency.
The Finnish example is perhaps more salient. Finland’s Consumer Ombudsman (FCO) is, by law, the only entity that can bring forward a class action. While there is technically room for other public actors to get involved (“an organisation promoting the collective interests of consumers designated by the Ministry of Justice as a qualified entity”), these have yet to come to the forefront. They also operate with an opt-in rather than an opt-out procedure.
Finland's inaugural class action legislation came into force in 2007, and for over a decade no cases were brought forward. That was set to change in 2019, when the FCO threatened to launch a case against two instant loan companies for charging exorbitant interest rates.
However, both companies settled with the FCO on generous terms; they agreed to the FCO's compensation claims, thereby making a class action unnecessary. Litigation was also considered against other similar companies; however, all targeted companies ended up settling with the FCO. This shows that the FCO had a powerful deterrent effect, thereby promoting judicial economy by incentivizing companies to settle in full rather than go to court against presumably well-resourced government counsel.
A similar institution exists in Quebec. The province's "Option Consommateurs" is an independent non-profit that receives indirect government funding through some provincial and federal governmental offices. It has initiated several important class actions in the province that are broadly in the public interest. While not quite a provincial ombudsman, the governmental funding of organizations like it in Ontario could act as an intermediate step or model towards developing a fully public body.
Conclusion
Non-unionized workers are in a lurch. Only the top percentile of employees can independently afford legal representation. The bottom percentile qualifies for legal aid. Low to middle income workers fall in between, not serviced by even partial payment assistance despite their lack of high-income status.
Cost changes would increase cost certainty and access to litigation for all. A provincial ombudsman would address unmet public interest needs. By lobbying for meaningful but not unprecedented change, the class action bar could modernize and improve the way Ontario does employment class actions.
About the author
Christian D'Ambrosi is an articling student at Koskie Minsky LLP.
Any article or other information or content expressed or made available in this Section is that of the respective author(s) and not of the OBA.