Labour Standards, Worker Rights, and Unionization in the Gig Economy

In a decision released on June 26, 2020, the Supreme Court of Canada ruled that Uber’s arbitration clause, which required drivers to resolve disputes through mediation and arbitration in the Netherlands, was invalid (Uber Technologies Inc. v. Heller, 2020 SCC 16). In doing so, the Supreme Court also upheld the authority of domestic courts to deal with disputes between Uber and its drivers. Combined with the decision of the Ontario Labour Relations Board (“OLRB”) earlier this year to classify Foodora couriers as dependent contractors, this marks a significant shift in the gig economy.

The “gig economy” is characterised by temporary, short-term work and most recently popularized by companies using mobile apps or websites to provide on-demand services to customers. The work consists of small, quickly-completed tasks that workers can opt in to completing, then move on to the next “gig”, compared to a traditional job with a fixed schedule and a single employer, completing work for projects that may span weeks or months. “Gig” work is not new, but is becoming increasingly common with workers who need an additional source of income using apps like Uber, Lyft, Instacart, and Foodora to take on hours of work outside their regular 9-to-5 jobs. However, gig workers have historically been categorized as independent contractors, depriving them of the legislative rights and protections afforded to dependent contractors and employees – one being the right to unionize.

Due to the abundance of short-term and part-time jobs within the industry, unions have traditionally had difficulty growing and maintaining union membership in the food services sector. This trend is shared by other sectors where employment tends to be unstable, making long-term commitments to investing in union dues as well as building the relationship between the union and the workers extremely tough. Overall, unionization rates in Canada have been falling steadily since the 1980s, but with more and more young workers experiencing job insecurity and suffering from low wages and worsening work conditions, unions may be the key to ensuring that employees preserve their rights in the labour market.

The OLRB’s February 2020 decision in relation to Foodora workers is crucial because independent contractors are not included within the definition of “employee” used in the Labour Relations Act (the “LRA”), meaning that they do not have the right to unionize. However, the LRA does apply to dependent contractors, meaning that the OLRB’s decision was a major step forward for gig workers in Ontario. Foodora subsequently announced their withdrawal from the Canadian market in late April, leaving hundreds of workers without a source of income during a pandemic. Foodora claims that their decision had nothing to do with the workers’ push for unionization, though the truth of that claim is certainly suspect.

Companies like Foodora and Uber, among others, who have historically treated their workers as independent contractors, are able to offload the costs associated with equipment, repairs, gas and insurance, payroll taxes, and healthcare and pension benefits. All those costs are borne by the workers themselves, who already receive low wages and cannot always be certain of how many hours they’ll work in a month. However, because gig workers are isolated – they work individually and have no shared space with others in their role – it’s challenging for these workers to organize and make their collective voices heard. If unions can gain traction in the gig economy, it would not only offer support to gig workers but also lessen the threat to unionized jobs in other sectors that may be tempted to move towards less traditional employment structures to reduce labour costs.

On a wider scale, precarious and non-standard work is one of the biggest issues facing workers today. Employees who are not permanent and full-time often receive lower wages than permanent employees performing the same work. Furthermore, the proportion of employees in part-time and temporary employment is growing both in Ontario and federally. The large majority earn low wages, work uncertain hours, and change employers frequently. The ability of companies to contract out individual tasks such as packing orders, driving, delivery, and cleaning to freelance workers is partially a result of workers’ lack of bargaining power in employer-employee relationships.

Foodora couriers had already cast a sealed vote in 2019 to determine whether the Canadian Union of Postal Workers (CUPW) would be certified as their exclusive bargaining agent, but those votes could not be counted until after the OLRB’s ruling. On June 16, 2020, it was revealed that nearly 90% of couriers had voted in favour of unionization, indicating the workers’ desire for more bargaining power, better health and safety standards, and fair compensation. That sentiment is echoed by workers across the country in similar situations of precarious employment. The rulings in Heller and with respect to the Foodora couriers’ status as dependent contractors, as well as the dedicated work of both those couriers and CUPW, have paved the way forward for workers to push for better labour standards and fair pay. For all workers who feel they lack a voice in the workplace, unions are still the best bet to advance your cause.

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