Advocates call for legislation to rectify misclassification of gig workers

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Image: Victor Avdeev/Unsplash

Foodsters organizer Ivan Ostos doesn't think he's asking for anything too radical.

What he is asking for is government legislation to make it easier for app-based gig workers to win worker protections: the right to minimum wage, workers' compensation, vacation pay, the right to unionize and other benefits that come when a worker is classified as an "employee."

"In a rich post industrial country like Canada, we're acting like this is the future, like you go on your app and you do your work on your phone. In reality we went backwards [in terms of labour law]," he said.

This is part two in a series that examines the state of the gig economy in Canada. Part one looked at how workers who believe they should be classed as "employees" rather than "independent contractors" are fighting for reclassification through the courts. Part two looks at why some unions and workers say Canada should adopt legislation to rectify the misclassification of workers.

Ostos and his fellow Foodora workers challenged the default status of "independent contractor" they had under Foodora at the Ontario Labour Relations Board (OLRB). After two years of organizing, they won: the OLRB reclassified them as employees, affording them the right to unionize.

The labour board decision may have set a precedent for other app-based gig workers doing similar work to be reclassified as employees. However, the onus is on groups of workers and those organizing them to bring legal challenges forward. It's a time-consuming, costly and impractical process before workers even get to court.

"If I learned anything through the Foodsters campaign, it's that the framework for union drives in Ontario is just so skewed in the favor of employers," said Ostos.

The certification process in Ontario was made more difficult in the Mike Harris era in the late nineties. The most frustrating part about the certification process, said Ostos, is the issue of employee lists, which, prior to Harris, were available to organizing workers.

Without access to that list, workers have a hard time knowing the size of their potential bargaining unit. This means they can't ever be certain that they've reached the threshold of support needed for certification (40 per cent). This challenge is particularly amplified with a workforce as geographically scattered and unknown to each other as app-based gig workers.

Organizing one group of gig workers at a time through individual legal battles in provincial courts can be a slow and limiting process, and lacks consistency across provinces.

Even so, Brendan McCutchen, a labour lawyer representing the United Food and Commercial Workers (UFCW) and Toronto-based Uber Black drivers at the OLRB, said it's simply the best available option right now.

"The Ontario political climate is not such that we can expect much legislative activity around the gig economy right now," said McCutchen, referring to a provincial government that has already made sweeping and regressive changes to its labour law.

That's why Jan Simpson, president of the Canadian Union of Postal Workers (CUPW), thinks there should be federal legislation that provides protections against gig workers being misclassified.

"I think in Canada we are sometimes so hindered by provincial labour laws. A victory in Ontario doesn't mean a victory in another province, but it offers a starting point for us to update the Employment Standards Act. I think of gig workers -- what they need and deserve is for the federal employment laws to end the misclassification," said Simpson.

In 2019, the Liberal Party of Canada ran on a platform that included a promise to develop federal rules for the gig economy.

"[W]e will move forward with new federal labour code protections, including: greater labour protections for gig workers who work through digital platforms; these are often contract or freelance workers (such as drivers for ride-sharing companies) whose status is not clearly covered by provincial or federal laws," the party promised.

According to a spokesperson for Minister of Labour Filomena Tassi, formal consultations on how to best implement these protections have been delayed as a result of the pandemic.

"As we wait for formal consultations to begin, the Minister of Labour has been holding informal consultations on the topic of gig and contract workers. Further consultations will be planned once public health guidelines permit," read a statement from the minister's office.

MP Anthony Housefather is the parliamentary secretary to the minister of labour. In an interview, Housefather said the government recognizes that federal labour standards need to respond to the emerging needs of gig workers on digital platforms.

Housefather declined to answer whether he thought gig workers were misclassified as independent contractors or not, because the matter was currently before Ontario courts, he said. He did indicate that current federal labour standards provide insufficient protections, particularly when it comes to workplace health and safety, for gig workers on digital platforms.  

"When the Canada Labour Code was originally drafted, I don't think anybody ever envisaged the percentage of the workforce that would be in the gig economy," he said.

Housefather said he did not want to suggest any specific solution before the consultations were completed and all voices on the matter had been heard. However, he said the results of the consultations, and how the government acts in turn, "has to be in a way that better protects these workers."

The spokesperson for minister Tassi also said there would also be a jurisdictional scan of how other governments have been responding to the digital gig economy.

NDP employment critic Daniel Blaikie said his party has not raised the issue of digital gig economy legislation with the government to date, because the focus has been on the pandemic response. He did say he thinks the government needs to seriously consider undertaking legislation such as California’s Assembly Bill 5 (AB5). Simpson and Ostos both said they thought AB5 could be impactful in Canada, too.

AB5 puts the onus on employers to prove its workers are independent contractors by way of a three-pronged test that considers how much freedom a worker has over their work, or how much they rely on the hiring entity to conduct the work. Under AB5, app-based gig workers are considered employees.

And yet, in California, it's not quite that simple.

As recently as February, Uber was estimated to be worth US$69.3 billion. In March 2019, Forbes pegged Lyft's value in the realm of US$20 billion.

In California, Uber and Lyft have each spent US$57.3 million and US$48.9 million respectively on a campaign in favour of proposition 22: an election day referendum that if passed, would exclude app-based transportation and delivery drivers from being considered "employees" under the Californian labour law AB5.

AB5 requires app-based companies to recognize their drivers as employees rather than independent contractors, thereby allowing workers protections and benefits like minimum wage, sick leave, and workers' compensation. Essentially, if forced to comply with AB5, the likes of Uber and Lyft would have to pay drivers and couriers more.

Despite their enormous valuation, companies like Uber and Lyft consistently report losses in the billions. According to Forbes contributor David Trainer, even before AB5, Uber's path to profitability remained unclear.

"Uber (along with Lyft (LYFT)) have built their businesses by selling rides and deliveries below cost to gain market share, all the while classifying drivers as contractors in order to avoid paying full benefits and keep costs lower," Trainer wrote this September.

Legislation such as California's AB5 threatens that already fragile business model, which is why efforts to reclassify workers as employees are met with heavily funded opposition from the rideshare companies through the prop 22 "yes" campaign.

In addition to the US$106.2 million contributed by Uber and Lyft, tens of millions from other delivery companies like Doordash and Postmates put the campaign’s total at US$199.4 million.

In contrast, the union-backed "no" campaign has raised just over US$11.3 million.

Further, reporting from CNET indicates that the rideshare and food courier companies have been involved in a "complex campaign" that includes social media harassment of advocates for AB5. 

Uber did not respond to emailed questions from rabble.ca about its position on the classification of their workers in Canada nor about the allegations of harassment as reported by CNET.

Lyft responded in an emailed statement that said the majority of its Canadian drivers drive less than 20 hours a week and rely on the flexibility of rideshare companies to work when they want to supplement their incomes.

"What we've seen in other markets is that they overwhelmingly do not want to be employees," read the statement.

Simpson compared the battle in California to that of David and Goliath.

"It's nothing new to any of us who organize because these multinational companies would spend millions of dollars on legal fees and intimidation," she said.

Housefather said he has confidence in Canada's political financing system in that it does not allow for corporations to have the same kind of financial leverage on politics that they do in the United States.

"We have a system where we need to make sure that we listen to all stakeholders. And that big money, corporate interests don't outweigh the voices we hear from workers. Everybody needs to be heard, everybody needs to be fairly treated," Housefather said.

Simpson did identify corporations' abilities to invest in lobbying activities as something of a challenge, however.

Lyft registered one instance of lobbying the federal government over the past 12 months on the issue of labour, in which the lobbyist discussed "an appropriate transportation regulatory regime" with MPs, ministers, and their staff.

Uber has registered three lobbying communications with the federal government over the same period.

In Ontario, Uber registered four new in-house lobbyists in August. Their profiles indicate they will be lobbying on legislative proposals, and are lobbying on "issues relating to the provision of smartphone applications to connect users with transportation and delivery providers; and the future of work as it relates to Marketplace Platform Entities and independent work."

Simpson said that any organizing and advocacy for gig workers needs to take a multi-pronged approach.

"We all know that lobbying and legislative change takes a while. We still have to focus on that but we cannot let the organizing stop," she said.

Ostos said that while legislation has the potential to be helpful for gig workers looking for worker protections, the risk is always that a change in government can remove those protections just as easily as they were brought in.

"That's why I think it's so important that workers advocate for themselves in the form of unions or other ways of worker empowerment. That is what protects workers the best," said Ostos. 

Chelsea Nash is rabble's labour beat reporter for 2020. To contact her with story leads, email chelsea[at]rabble.ca.

Image: Victor Avdeev/Unsplash

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