Mar 4, 2020

A new battle is taking place on the gig economy front, where technology is reshaping traditional employment relationships. Workers for Foodora have won the right to unionize in a carefully reasoned, 40-page decision by the Ontario Labour Relations Board (“OLRB”). A different union has announced that it is applying on behalf of Uber drivers on similar grounds.

Internet platform companies such as Foodora and Uber classify their drivers as being self-employed independent contractors. That means that they are not entitled to any of the legally required benefits for employees, such as minimum wage, statutory holiday pay, overtime, or termination pay.

Given that the Employment Standards Act ("ESA") relies on the week common law definition of who is an employee, it may be difficult to obtain ESA benefits for such workers. However, even if the workers do not meet the common law test of being employees, they may still be eligible for unionization under the definition of being “dependent contractors.”

Ontario’s Labour Relations Act (like the statutes in many other provinces, and the Canada Labour Code) allows union membership for an intermediate category of worker known as a dependent contractor. The Act defines a dependent contractor as a person

…whether or not employed under a contract of employment, and whether or not furnishing tools, vehicles, equipment, machinery, material, or any other thing owned by the dependent contractor, who performs work or services for another person for compensation or reward on such terms and conditions that the dependent contractor is in a position of economic dependence upon, and under an obligation to perform duties for, that person more closely resembling the relationship of an employee than that of an independent contractor.

Dependent contractors have some characteristics of independence, such as owning their own vehicles. Nevertheless, they get much of their pay from one company that has substantial control over how they work.

One advantage that unions have in going into this battle is that there is a long line of cases at the OLRB in which it has “invariably found taxi drivers, even if they own their cab and even if they sometimes hire replacement drivers, to be dependent contractors”[1] as opposed to independent contractors.

Similar rulings have been made for delivery and courier drivers who own a vehicle. The employer will often claim that they are independent, because they have the option of turning down work. When reviewing such a claim, the OLRB examines the actual behaviour, and may find that this freedom “is illusory at best.”[2]

Each case is decided on its own facts, so the outcome is never a foregone conclusion. In its decision in favour of union eligibility for the Foodora workers, the OLRB put a great deal of emphasis on the Foodora “app” as being the most important tool, more important than the vehicle owned by the driver or rider. This app also contributes to a high degree of control over the workers, as their every move is tracked by GPS.

Foodora attempted to rely on the argument that it did not require its workers to be exclusive to it. The evidence showed that some of the workers also occasionally worked for competing food delivery services, such as UberEats and Skip-the-Dishes. The OLRB rejected the relevance of this.

As remarked on in the decision, this is the first ever gig economy case decided by the OLRB, but there is a long history of other cases dealing with part-time workers. “The fact that couriers had other sources of income is not necessarily indicative of economic independence. It is not uncommon for individuals to have multiple part-time jobs.”

In the case law of the OLRB, economic dependence is determined by the structure of the relationship, not how much of the worker’s income comes from that employer. In so doing, the OLRB distinguished a recent decision of the Ontario Court of Appeal, which stated that being a dependent contractor requires “a certain minimum economic dependency, which may be demonstrated by complete or near-complete exclusivity.”[3] The OLRB held that the Court of Appeal was relying on a common law definition of dependent contractor. That definition does not impact on the OLRB, which has its own statutory definition.

The OLRB also placed emphasis on the degree of control exercised by Foodora when the worker is on the job. Workers are assigned shifts, and once on a shift they are obligated to complete it. This principle would apply to a wide range of on-call and roster workers. They may have the right to turn down a job, but once they have accepted it, they are under the same type of discipline as a regular employee.

The application for Uber workers to unionize is quite different from Uber Technologies Inc., et al. v. David Heller, where the decision of the Supreme Court of Canada is pending.[4] That case is about whether an agreement requiring Uber drivers seeking employee benefits to go to individual arbitration is enforceable. If Mr. Heller is successful, his class action will still have to overcome the jurisprudence noted above, finding that taxi drivers are usually dependent contractors rather than employees. The class would have to show that Uber’s app enforces a greater degree of control than has been typical for taxi drivers. Even if the Supreme Court were to rule against Heller, it is unlikely to affect the union’s application for certification.

Once union representation is certified by the OLRB, the employer is required by the Labour Relations Act to negotiate in good faith a first contract with the union, superseding the previous individual contracts with the “app users.”

The OLRB is an administrative tribunal whose statute has a strong privative clause. Direct appeals to a court from an OLRB decision are not available. It is possible, however, to seek judicial review to quash an OLRB decision by arguing that it was unreasonable.


[1] City Cab, ABC Taxi (Brockville) and Safedrive Inc. v. Retail, Wholesale Canada, Canadian Service Sector Division of the United Steelworkers of America, Local 1688, Ontario Taxi Union, 2001 CanLII 8088 (ON LRB), <http://canlii.ca/t/6rmz>.

[2] Teamsters Local Union 938 v 1022804 Ontario Inc. o/a Motor Express Toronto, 2019 CanLII 78509 (ON LRB), <http://canlii.ca/t/j23s8>.

[3] Thurston v. Ontario (Children’s Lawyer), 2019 ONCA 640, at para. 23.

[4] https://www.scc-csc.ca/case-dossier/info/af-ma-eng.aspx?cas=38534