Precedent Setting Decision for the GIG Economy
The precedent setting decision by the OLRB sets the gig economy in the direction of unionization, trail blazing for other such delivery services such as Skip the Dishes and Uber. (https://www.cbc.ca/news/canada/toronto/foodora-couriers-are-eligible-to-join-union-labour-board-rules-1.5475986).
Top image: https://www.foodora.ca/
Bottom image: https://www.cupw.ca/en/foodsters-win-major-victory-workers-gig-economy
On February 25, 2020, the OLRB made the decision that couriers delivering for the popular Foodora are dependent contractors. After days of evidence presented to the Board, the Board sided with CUPW stating the Foodora couriers are dependent contractors as defined in the Employment Standards Act. The Board took the position that despite the “gig economy” label, the case shared similar issues to that of older cases involving couriers (OLRB, Feb 25, 2020 para. 172). The significance of the decision on all gig workers is that more providers in the gig economy will be encouraged to come forward to gain their status as dependent workers. The dependent contractor allows for the right to unionize. Unionization for this group of employees will change their employee rights and, strengthen negotiating power for otherwise precarious work.
After analyzing the evidence provided by Foodora couriers, the Board was able to gather information on the operations to determine the relationship between the couriers and Foodora. The Board determined the relationship mirrors that of employee/employer. The evidence showed the dispatchers, by way of the Foodora App, were managing the couriers by scheduling and managing shifts and availability. Foodora couriers testified they feared retribution for working with more than one delivery service (ie. Skip the Dishes, etc.), and were subject to escalated discipline for failing to uphold the rules and regulations set out in their contract as examples (OLRB, Feb 25, 2020 pp 63, 124 – 127).
This precedent setting case will pave the way for more job security for those currently struggling to make ends meet with precarious employment in the gig economy.
Foodora couriers are eligible to join union, labour board rules, (February 25, 2020), The Canadian Press
Canadian Union of Postal Workers v Foodora Inc. d.b.a. Foodora (2020) OLRB 1346-19-R
Tiffany Johnston 
Hi Tiffany,
This is a fascinating story you chose. In a previous EMPR course we discussed whether these type of gig food delivery drivers should be dependent contractors or not, but the Foodora course was still making its way through the court system. I am not surprised to see that the court determined they were dependent contractors.
The leading case in Canada on the distinction between employees and independent contractors is McCormick v Fasken Martineau DuMoulin LLP, 2014 SCC 39. In McCormick, the Supreme Court of Canada identified two key considerations: 1) the extent to which the employer controls the worker’s working conditions and 2) the extent to which the worker is economically dependent on the employer. The Court characterized the relationship between these considerations as “synergistic” or mutually reinforcing.
A later decision of the Ontario Court of Appeal, Keenan v Canac Kitchens, 2016 ONCA 79, identified five considerations, one of which is whether the worker works exclusively for the employer. I think this factors is key in determining whether gig type workers are employees because these companies (Skip, Uber, Foodora) require their drivers to work exclusively for them and follow their unique set of rules. It’s also fairly obvious in most cases that the employee is economically dependent on the service provider.
As a person known to be pro-union, I think that the option for these gig economy workers to unionize is exceptionally important, especially in a precious work environment where it is easy for them to be taken advantage of. Strength in numbers and the support of qualified employment relations officers will certainly ensure these workers are provided with at least the basic rights they are entitled to.
But in addition to unionizing, they are also now afforded other rights under the Employment Standards Act, such as notice of termination of pay in lieu. So now the skeptic in me wonders how this will play out in the real world. Unionization in smaller industries can have a detrimental effect. I know of a small, local home care agency who had to close when the employees were certified for unionization. Their profit margins were small to begin with, and the cost of unionization would have made the company unprofitable.
Do you think that these courier services will continue to be profitable if their relatively large front-line workforce begin to unionize?
Or more importantly, do you think that some creative legal and business minds will be able to creatively tweak the work environment to create a system which could no longer be considered to be a dependent contractor or employee relationship?
References:
Boissonneault, R. “Employees, Dependent Contractors and Independent Contractors: What’s the Difference?: What misclassification can mean to you”. Cavalluzzo Law Firm Blog. Retrieved from https://www.cavalluzzo.com/resources/blog/post/item/employees-dependent-contractors-and-independent-contractors-what-s-the-difference.
Employment Standards Act, 2000, S.O. 2000, c. 41.
LikeLike
Thank you Stephanie, for taking time to review my post and provide insightful feedback.
You raise some interesting questions. After reading your comments on profitability post-unionization, I also wonder how Foodora will manage to deduct and pay union dues. Currently, I do not believe there are source deductions taken from the income earned by the couriers. Having to pay into source deductions, and ultimately, pay union dues, will increase the cost of business immediately. On top of that, there would need to be additional manpower and/or technology to facilitate the act of calculating, imposing and remitting the deductions. This may raise the issue of being less profitable to operate in the manner they currently do. Deductions aside, the cost of unionization will definitely increase the fees for the service customers are paying. Who knows whether increases in fees would impact customer’s willingness to use the service or whether they will look for better more affordable services.
As for a creative solution, there may be a way to eliminate some of the structure put in place that seems to create that dependence for the workers, however, the removal of the structure would lead to a high risk of decline in service standards. Additionally, Foodora would be forced to let go of the reigns. They would have less accountability from the workers, and following from that, less incentive for the gig workers to do a good job. The current system on the app being used is coordinating the business, and is attempting to create standards and expectations for Foodora customers.
Your questions are definitely tough ones!
LikeLike