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Class action appropriate for multiple wrongful dismissal claims
March 1, 2005

An Ontario court recently approved a procedure for proceeding in a wrongful dismissal class action against K-Mart. The claim involved approximately 1000 former employees of the retail chain whose employment had been terminated following purchase of the Canadian K-Mart chain by the Hudson’s Bay Company.

The court certified the plaintiff employees as a class in 1999, and granted summary judgment on the basis that their claims raised the following common issues: (a) all had been dismissed without cause; and (b) all were entitled to damages for K-Mart’s failure to provide them with reasonable notice of dismissal.

In certifying the class, the court recognized that the quantum of damages and mitigation issues would have to be assessed individually. As a result, a consensual process was developed under which individual cases would be heard by referees.

When the consensual system proved slow and costly, the plaintiffs asked the court to order a more effective method for assessing the individual damage claims. In response, K-Mart sought an order decertifying the proceeding on the ground that dealing with the claims by way of class action had proven to be unworkable.

The court declined to decertify the proceeding, and confirmed that the class action was an efficient and appropriate way to deal with the common issues. The court adopted the plaintiffs’ proposal to amend the referee process by increasing the number of referees and appointing referees to hear claims in geographic areas where individual claimants resided. The orders of the referees will be reviewed by the court and will be governed by the laws of the provinces in which they are made.

Webb v. 3584747 Canada Inc. 2005 No. 98-GD-43927, February 11, 2005