Written By Jordan Fremont, Archana Ravichandradeva and Lori Sterling
In its February 25, 2020, decision in Canadian Union of Postal Workers v Foodora Inc. d.b.a Foodora, 2020 CanLII 16750 (ON LRB), the Ontario Labour Relations Board (OLRB) found that Foodora Inc. couriers working in Toronto and Mississauga are dependent contractors, eligible to be unionized under Ontario's Labour Relations Act. The decision is significant in the labour relations context due to the nature of the work being performed, as this was the first time the OLRB decided a case on workers within the "gig economy" who had been engaged to provide services as independent contractors and not as employees. Though dealing only with the narrow issue of whether Foodora Inc. couriers are "dependent contractors" under the Labour Relations Act, the OLRB applied the traditional test for distinguishing between employees and independent contractors. The decision provides an indication of how courts and other decision makers in Canada might approach these issues when evaluating employment-related rights and obligations of "gig economy" workers in other contexts (i.e., under employment standards legislation, pension standards legislation, income/health tax legislation, and for employment insurance and Canada/Quebec pension plan purposes).
The Canadian Union of Postal Workers had sought to be the exclusive bargaining agent for Foodora couriers working in Toronto and Mississauga under the Labour Relations Act, on the basis that these Foodora couriers are "dependent contractors". This is a defined term under the Labour Relations Act that describes a category of work between traditional employment and independent contractor status, which provides such workers with the ability to unionize. The OLRB considered the nature of Foodora's business in light of the Labour Relations Act definition of "dependent contractor", with the key question being whether the relationship more closely resembles that of an employee than that of an independent contractor (measured by whether a worker has been engaged to perform services as a 'person in business on his own account', with an opportunity for profit and risk of loss being hallmarks of independent contractor status). Significant facts and factors considered by the OLRB include:
- The use, or right to use, substitutes: Couriers are not allowed to engage substitutes as a way to increase their revenue/profits.
- Ownership of instrumentalities, tools, equipment, appliances etc.: Even though Foodora couriers used their own transportation and insulated carry bags, Foodora's delivery app is the most significant tool.
- Evidence on entrepreneurial activity: Foodora couriers cannot rely on 'customary entrepreneurial tools' to enhance their ability to make a profit, such as the ability to advertise or promote skills.They are limited to what Foodora allows them to do.
- Economic mobility or independence: There is a complex system of incentives and restrictions placed on the courier during their duties. Foodora exercises significant control over the couriers by determining when they pick up and deliver orders, restricting their ability to decline orders, and controlling when the couriers can do work.
- The extent of integration: The couriers are heavily if not entirely integrated into Foodora's business, and function as the "service side" of the business. The couriers do not develop independent relationships with the restaurants or the clients, and Foodora itself determines the nature of the service relationship. The OLRB described couriers as a "cog in the economic wheel".
- Control of the manner or means of the work: Couriers must work within the parameters established unilaterally by Foodora, and the app permits the company to closely monitor every move of the courier to ensure its service standard is met.
In its conclusion, the ORLB stated that "[t]he couriers are selected by Foodora and required to deliver food on the terms and conditions determined by Foodora in accordance with Foodora's standards. In a very real sense, the couriers work for Foodora, and not themselves…", and "[a]s the evidence bears out, couriers more closely resemble employees than independent contractors."
Implications for the Gig Economy
Governments, courts and tribunals are playing catch-up with the "gig economy", in which services are provided on a "piece-work" basis, often through an app or internet platform (i.e., digital platform based work).
In the Foodora case, the OLRB liberally applied the traditional tests for determining worker status, with the result that certain Foodora couriers were found to be "dependent contractors" and therefore eligible for unionization. The decision is reflective of a broader trend towards the extension of employment (or employment-like) rights to forms of work where the economic-status of a worker is closely tied to the particular business that has engaged that person. In the context of work specifically within the "gig economy", the decision is consistent with outcomes in California, the United Kingdom and, most recently, France, respecting the status of Uber drivers, all of which concluded that the drivers are in an employment relationship with Uber.
As many such "gig economy" businesses are grounded on models that contemplate the delivery of services through independent contractor (and not employment or dependent contractor) relationships, it can be expected that recent court and tribunal decisions which extend employment-type rights to workers will have impacts on how these businesses continue to operate. In the meantime, governments are wrestling with the policy issues raised by these and other new forms of work. For example, in a December 2019 letter from Prime Minster Trudeau, the federal Minister of Labour was mandated to, amongst other things, work with colleagues and through established legislative, regulatory and Cabinet processes to "[d]evelop greater labour protections for people who work through digital platforms, whose status is not clearly covered by provincial or federal laws" (see our February 2020 post, The Next Round of Federal Labour Reform: Minimum Wages and Employment Standards). However, the timing and extent to which federal and/or provincial governments address these issues for digital platform or other "gig economy" workers remains to be seen.