In the Ontario Labour Relation Board’s (“OLRB”) first decision concerning workers in the “gig economy”, the OLRB held that Foodora Inc. (“Foodora”) couriers are “dependent contractors” under the Labour Relations Act, 1995 (“LRA”). As dependent contractors, Foodora’s couriers are entitled to organize and be represented by a trade union.
In making its assessment, the OLRB analyzed the facts against OLRB jurisprudence examining the relationships of couriers in various sectors and concluded that “the services performed by Foodora couriers are nothing new”.
The essential question is: do these individuals’ relationships with Foodora more closely resemble employment relationships or those of independent contractors?
In determining that the couriers’ relationships more closely resembled employment relationships, the OLRB held, among other things:
- Foodora couriers are not permitted to subcontract the delivery services to substitute workers. As such, a Foodora courier is much like an employee who is limited to his/her own skill and labour.
- The most important tool used by the courier is the “App” and the “App” is the lynchpin in the food delivery process. Because the App is exclusively developed, owned and controlled by Foodora, a courier more resembles an employee who is permitted to use the company’s software than an independent contractor.
- Hard work does not equate to “entrepreneurial activity”. A courier’s opportunity to make more money by working harder, faster and more efficiently cannot be conflated with entrepreneurial activity.
- The fact that the couriers work for competing service providers while working for Foodora is not determinative of the couriers’ economic dependence on Foodora. What is important is not the actual economic circumstances of the individual courier, but whether the structure of the relationship between the courier and Foodora is such as to draw the conclusion that the terms and conditions of the relationship render the courier economically dependent upon Foodora. A courier working for multiple service providers is not unlike an employee working multiple part-time jobs. The determination of economic dependence or independence must only be made in the context of the courier’s relationship with Foodora. In assessing economic dependence, the OLRB did not confine itself to a numerical measurement because the statutory definition of “dependent contractor” does not call for a numerical measurement.
- Foodora has the right and ability to steer the couriers’ behaviour and control how the couriers perform the work through a network of incentives and prohibitions. The exercise of control over the couriers lends more favourably to a conclusion that the couriers are dependent contractors.
- With no ability to negotiate or alter their fees, the Foodora couriers are more like employees who receive a standard wage rate (or piece rate) than independent contractors, who have the ability to vary their fees to suit their needs and/or the environment.
This represents a new challenge for the “gig economy” in Ontario as the OLRB has now opened the door for workers in this sector to unionize. It remains to be seen, however, whether unions will be able to offer a sufficient incentive for workers to want to walk through that door.
We encourage employers who regularly engage “independent contractors” to contact counsel to review their agreements, practices and policies with respect to engaging independent contractors to ensure that such individuals are properly classified as independent contractors.
In the meantime, stay tuned for updates as the legal landscape concerning workers in the “gig economy” continues to evolve.
This article provides only general information about legal issues and developments, and is not intended to provide specific legal advice. Please see our disclaimer for more details.