Gig Workers in Canada Found to be Employees and Allowed to Unionize
December 02, 2020
Like many other jurisdictions Canadian law is playing catch-up to the “gig economy”, where apps and other technologies have allowed organizations to enter unique contractual relationships with individuals for services.
One of the most popular examples in Canada is the legal relationship between food delivery app services, and the couriers they contract with to pick up the food from the establishment and deliver it to the customer. In general, these types of relationships are managed through the delivery service’s phone app, run by an algorithm it develops.
Food delivery couriers found to be economically dependent, protected by labour laws. Earlier this year, the Ontario Labour Relations Board, in CUPW v Foodora Inc (OLRB case no 1346-19-R), for the first time considered whether a courier for a food delivery service was an employee as understood under the Labour Relations Act. Couriers were found to be dependent – as opposed to independent contractors, and therefore considered “employees” as understood under the Ontario Labour Relations Act and, as a result, able to unionize.
Foodora couriers were found to be “economically dependent” on and had an “obligation to perform duties” for the delivery service, aligning more closely with an employment-structured relationship, as opposed to that of an independent contractor. One of the important factors was the delivery service’s control over shifts, including where they were offered, their length, how many couriers could work on one shift, and the permissible geographical zones where couriers could operate. In addition, the delivery service paid the couriers like employees, i.e. weekly based on the time they worked the previous week. And, unlike independent contractors, the couriers could not set their charging rate, nor build their own client-base. Furthermore, The OLRB determined there was a certain expectation from the company to the couriers. The Board found that “once a courier is assigned an order, they are expected to accept it and make the delivery.” The failure to do so, if not properly justified, could result in disciplines.
The delivery service countered by arguing that, unlike employees, couriers should instead be viewed as economically independent because they were expressly allowed to work for other food delivery app services while still working for Foodora. The OLRB rejected this argument, finding instead that an individual’s choice or ability to work one or more part-time jobs was not a relevant factor for determining economic independence in the circumstances.
What’s next in employment law for Canada’s gig economy?
For organizations in Canada with “gig”-type relationships, it may be wise to carefully consider how such relationships are structured and managed, and whether any issues should now be addressed considering the OLRB’s ruling. For some, the potential consequences flowing from this decision may be more severe than for others. In Foodora’s case specifically, the saga came to a definitive end when, shortly after the OLRB’s decision was released, Foodora ceased all operations across Canada. The company largely cited strategic and pandemic-related reasons for choosing to exit Canadian markets.
While this decision is certainly cause for pause and careful consideration, not all gig-type relationships will necessarily fall within the “employee” paradigm under Canadian employment and labour laws. Indeed, it is possible that under different circumstances, contractors working in the gig economy could be found to be economically independent contractors. Perhaps the law in Canada just hasn’t seen an app for that, yet.
This article was contributed by John Mastoras, Senior Partner of Norton Rose Fulbright Canada.