I have just checked and it works for me (using kernel 2.6.18-028stab051).
Could you try using 2.6.18 (i.e. stable) kernels, or 2.6.24? Note that 
2.6.20 (as well as 2.6.22) is frozen and unsupported.

Tim Hudson wrote:
> I've got openvz setup and operating nicely with three VEs (ubuntu7.10, 
> centos4,
> redhat9) - but shell job control does not work in any of them.
>
> ^Z should suspend the current command inside the VE when in a shell 
> where you've
>  ssh'd into the VE - but instead it remains inside the current 
> process. I've
> checked stty settings and they appear equivalent in both the VE and host.
>
> Have I missed enabling something which is mentioned in the 
> documentation or is
> this a known issue?
>
> I'm using 2.6.20-ovz008-openvz1 (built from source) following 
> instructions for
> how to build when using Ubuntu as the host OS.
>
> Any pointers to how to resolve this would be appreciated.
>
> Thanks,
> Tim.
>