The “Gig Economy”: this is the name that has been given to the current state of the world of work in North America, if not most of the Western world. The term connotes the changing approach to work that involves individuals relying on different – “non-traditional” – jobs (whether one or more) that focus on choice and flexibility for the worker.
Choice and flexibility are not words commonly associated with unionization, but in a recent decision of the OLRB, the Canadian Union of Postal Workers got one step closer to being certified as the bargaining agent for the various couriers of food delivery company Foodora working in Toronto and Mississauga. The latest step in the unionization campaign that took place last summer and culminated in a vote in August is the determination of the status of the couriers under Labour Relations Act, 1995 (the “Act”) that was delivered in a decision from Vice-Chair Matthew Wilson released on February 5, 2020.
Chief among the issues raised by Foodora when the application for certification was filed was whether the food couriers qualified as employees under the Act. Foodora’s argument was that the couriers were in fact independent contractors and not employees – arguing that the couriers control and are responsible for the “tools” of their work (from bikes to food bags) and have significant flexibility with their shifts and working times. Seemingly, this is an argument that would fit with the supposed nature of the gig economy.
The OLRB did not accept Foodora’s argument, instead finding that the couriers were in fact “dependent contractors”: a category of worker that has existed in labour law for over 50 years and is, crucially, akin to having employment status for the purpose of the Act. To make that determination, the Board asked, at paragraph 80:
[d]o these individuals more closely resemble the relationship of an employee or that of an independent contractor? This is a comparative analysis - 18 - that focuses on a range of factors in the labour relations context. It has always been, and continues to be, a factual determination.
In this case, the Board’s factual determinations were focused on the amount of control exercised by Foodora in various areas, including most significantly the control afforded to Foodora through the use of the App, stating at paragraphs 96-98:
The Board cannot ignore the significant disparity in the importance of the tools to the delivery of food. Just as the Board would not treat a shovel brought by the employee to the job site as equivalent to the backhoe provided by the contractor, the Board cannot treat the App as an equivalent to the bicycle and smart phone.
The software developed and owned by Foodora in the form of an App is the lynchpin in the process to deliver food. …Through the App, Foodora controls payment by the customer, makes payment to the restaurant, and calculates the amount earned (including tips) by the courier.
The App also allows Foodora (not the courier) to generate customer lists and information; an inventory of restaurant customers; and goodwill and brand recognition. The App as a tool enables Foodora to continually develop and grow its business. This is not available to the courier who performs the service as determined by Foodora through the App.
A second factor given significant weight by the OLRB in its decision was the “level of dependence” between the courier and Foodora. Despite Foodora’s argument for independence on the basis that the couriers were free to work for other (food courier) companies, the OLRB instead accepted the Union’s contention that the couriers were dependent on Foodora based on the “network of incentives and prohibitions to steer and control the behaviour of the couriers”, including the control over shifts (timing, structure, location and ability to swap or substitute) and specific expectations and consequences when orders are accepted.
In reconciling this determination with the “Gig Economy” the OLRB said that this is simply a new version of similar issues with which it has dealt in the past;
This is the Board’s first decision with respect to workers in what has been described by the parties and the media as “the gig economy”. However, the services performed by Foodora couriers are nothing new to the Board and in many ways are similar to the circumstances of the Board’s older cases. This is not the Board’s first case examining the relationship of couriers. The Board has been tasked with the same questions about dependent contractors in various sectors including transportation and construction. Such cases have always been fact-based inquiries that require a balancing of factors. This case is no different in many respects.
From an employer’s perspective, the main takeaway is that the context is key to any determination of employment status: as always, it is the substance of the relationship that matters and not the terminology. This is especially true as employers and employees alike contemplate the new and emerging trends in the Gig Economy, and the team at CCPartners is here to help you avoid unnecessary exposure and to ensure your organization is protected now and in the future.
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