(416) 214-5111

The traditional workplace model has been significantly disrupted in recent years. This is an important issue for individuals and a concern for legal advisors, including employment lawyers in Toronto and across Canada.

The definition of a “job” has broadened significantly such that it has become increasingly difficult to determine whether a person is an employee or a contractor for one or more organizations.

The changing landscape of the labour market has also led criticism by many that employee rights are being eroded to the benefit of Canada’s highest earners. Governments and their related agencies appear to be responding to this criticism by strengthening the rights of individuals working in alternative arrangements to the traditional employer-employee structure.

Food Couriers Found to be Dependent Contractors

A recent and prominent example of the response of government is the Ontario Labour Relations Board’s recent ruling that Foodora Inc. (Foodora) couriers are dependent contractors within the definition of the Labour Relations Act (the Act), and therefore have a right to seek certification under the Act.

In August 2019, couriers working for the app-based food delivery company, Foodora, voted on whether to join the Canadian Union of Postal Workers (CUPW).

The main issue the Ontario Labour Relations Board was asked to determine was whether Foodora couriers met the definition of “dependent contractor” under the Act or, as argued by the Company, they were independent contractors, and therefore not covered by the applicable legislation. This determination was a key factor in determining whether these workers have a right to unionize.

Types of Employment Relationships

There are various kinds of working relationships in the Canadian labour market. One is the independent contractor which is considered a self-employed individual who is excluded from employment and labour legislation. These workers are expected to have autonomy over how and when to perform the job and are essentially operating a business of their own. By contrast, an employee’s relationship with the employer is one of subordination. Finally, there are dependent contractors who, while they have some independence, generally have less control over their working conditions and are in a position of economic dependence.

Where an employer treats an individual as an independent contractor rather than an employee or dependent contractor, they can be subject to a range of liabilities including:

  • Orders to provide payments owed under the Employment Standards Act, 2000 (“ESA”) including in relation to unpaid wages, vacation accrual, holiday pay, notice of termination, and severance pay (when applicable);
  • Common law reasonable notice of termination; and/or
  • Missing payments ordered by the Canada Revenue Agency for income taxes, CPP, and EI, and/or related interest and penalties.

Further, a finding that a worker is a dependent contractor or employee may create an opportunity for those in the workplace to unionize.

How to Determine who is an Employee or Dependent Contractor

Courts and related bodies (i.e. labour boards) regularly review working relationships to determine if they should be characterized as employee-employer, dependant contractor, or independent contractor.

Typically, a review of the working relationship will include an assessment of factors such as the degree of control and independence; whether the worker bears a financial risk and has a chance to profit. The test under the Act when making this determination focuses on a range of factors in the context of the working relationship. It is a highly fact-based determination and therefore it is handled on a case-by-case basis.

In the Foodora case, the OLRB made its decision by assessing in detail the activities of the couriers. The Board specifically considered eleven elements of the couriers’ working conditions in concluding that the workers are, in fact, dependent contractors.

The Foodora decision represents a potential shift in how employment relationships between “gig” workers and their app-based companies may be viewed.

The case makes clear that employees who are working as independent contractors (including freelancers, “gig” workers, and others), may be entitled to additional protections under the law, depending on what the actual day-to-day realities of their jobs entail. This can have significant implications with respect to a range of matters including but not limited to termination of employment and claims for wrongful dismissal.

If you have questions about your relationship with the organization or organizations you work for, or in relation to issues such as being disciplined, harassed or fired, please contact Toronto employment lawyers, Sultan Lawyers at mlahert@sultanlawyers.com or here. We can help provide clarity and guidance and will ensure that you are protected at work.

Return to Blog