Written by David Doorey, York University
As the Ontario government prepared to announce a new “gig” worker law that the Minister of Labour boasted would “lift up the lives of thousands of gig workers in Ontario”, a decision came down that an Uber Eats driver is already an “employee” under the Ontario Employment Standards Act.
The decision is terrible timing for the Conservative government, which desperately wants to present its new law as a bold step forward for digital platform workers. However, the truth is that if Uber drivers and other similarly situated “gig” workers are already “employees” (as I and many others believe), then a new law that carves them out of existing legal entitlements for “employees” is a regressive step that would make the workers worse off than they are at present. I have made this argument before.
The point is demonstrated by the latest decision finding that an Uber Eats courier is an “employee”. As described below, the finding of “employee” status led to an order for Uber to pay the courier close to $1000 for various violations of the ESA, including a failure to pay the minimum wage for all hours that the courier was “waiting or holding himself ready to work”. [Congratulations to friends of the Law of Work blog Ryan White and Cole Eisen for a big win.]
As I understand the proposed new Ontario law, only “engaged” time is counted as working, meaning the time that a driver is actively completing an order. As a result, an Uber Eats driver like Sharma would be entitled to less wages under the government’s new law than they are already entitled to under the existing ESA. This is a windfall for Uber and platform companies, not an advance for workers. There may be other rules in the legislation that are new and helpful for workers, such as a requirement for platform companies to provide written reasons for de-activation of a driver from the system. However, insofar as the law removes platform workers from existing entitlements under the ESA, the law is hardly a great leap forwards for workers’ rights.
The recent decision was issued by an Employment Standards Officer and Uber has already announced that it will appeal to the OLRB. Assuming that the ESO decision is upheld and the OLRB ultimately decides that digital platform workers are “employees” under the ESA, it is unclear what effect the new law will have. The Minister suggested in this article that he was aware of the decision and that the new law would raise the floor and “not set a ceiling”. That is cryptic. Surely Uber and other platform companies will argue that the new law signals an intention by the legislature to create a separate model for calculating hours worked by platform workers and therefore that earlier findings that waiting time counts as “work” should be disregarded.
Summary of Employment Standards Officer Decision in Sharma v. Uber
Sharma has driven for Uber Eats since 2020. The incident that gave rise to the ESA complaint involved a decision by Uber to “adjust” Sharma’s payment by $195.22 after Uber alleged that a technical issue had resulted in Sharma being overpaid for two rides. Under the ESA, it is unlawful for an employer to deduct pay from an employee except in very narrow circumstances. This argument required the ESO to decide whether Sharma was an “employee” for the purposes of the ESA.
[The ESO rules that there are three related Uber companies that are involved when a worker accepts the Uber agreement on their App. She rules that these companies are related businesses for the purpose of Section 4 the ESA. This post will focus on the employment status issue]
As I have explained before, there’s always been a strong argument that Uber drivers (and other gig workers) are “employees” under the Ontario ESA. That’s because “employee” is interpreted broadly to sweep in as many workers as possible who more closely resemble employees than they do true entrepreneurs. I have predicted that with the right facts, the OLRB would rule that an Uber driver is an “employee”. This ruling by the ESO does not surprise me.
The ESO applied various common law tests. Firstly, she considered the “organization test”,which asks whether the work performed by the worker is integral to the organization’s business. Here is where Uber made its usual argument that all it does it provide a technology and that delivery is only one part of its business. The ESO was not impressed by that argument. In concluding that an Uber Eats courier is integral to Uber’s food delivery business, the ESO wrote:
It can be held that the claimant is an integral part of the Uber Eats business line as without the delivery providers, Uber Eats delivery services could not be offered. The delivery providers equally rely on Uber Eats to provide the App in order to perform their deliveries with the company.
Secondly, she applied the “four-fold test”,which considers the following four factors:
Control: The ESO ruled that while an Uber Eats driver has discretion over when to log onto the system and some discretion over whether to accept any particular order, overall once a driver logs into the Uber system, Uber exercises considerable control over how the work is performed:
“In order to perform work for Uber, the claimant is required to go through a specific hiring process, attend mandatory training and demonstrate that he is adhering to Covid-19 safety protocols. When working online it can be held that the respondent has a considerable amount of control that is exercised through the App. The App informs the claimant the details of the delivery, the routes/timeframes, fees and handles the complaints process. In addition, Uber Eats reserves the right to de-activate and suspend accounts for breaches of their agreements and guidelines in place. The claimant has provided detailed evidence demonstrating scenarios where warnings and disciplinary actions were taken. Based on a review of the evidence on file, I find the element of control to be indicative of an employment relationship.”
Materials/ownership of tools: While the worker provides the bike/vehicle and smart phone, “the App is arguably the most important tool for performing deliveries. Without the App, there is no connection between the customer, the restaurant, and the claimant to provide the service”. Therefore, this factor is indicative of employment status.
Chance of Profit: Uber sets the rates and there is no possibility of negotiation over these rates. The only control the driver has over income is to work harder. This is not indicative of entrepreneurship and this factor also is more indicative of an employment relationship.
Risk of Loss: The risk of loss is assumed by both parties, so this factor is not determinative of employment status.
In the end, the ESO ruled that considering all these factors, Sharma more closely resembled an employee.
Once it was determined that Sharma is an “employee” of Uber Eats, the ESO turned to the various violations of the ESA. Several violations were found:
- Uber does not have a regular pay day, which violates Section 11(1).
- The withholding of the $195.22 by Uber constituted an unlawful deduction from wages contrary to Section 13(1). An employer cannot just deduct money from an employee’s pay whenever it believes it has made an administrative error, unless the employee agrees in writing to the specific amount being taken back. That did not happen here.
- Uber failed to keep a record of the daily hours worked by Sharma contrary to record keeping rules in Section 15(1).
- There was one period during which Sharma did not have a full 24 hours off work contrary to Section 18(4) and one period in which no 30 minute eating period was taken contrary to Section 20(1). Note that in assessing these hours of work standards, the ESO referenced the fact that under the ESA, work is “deemed” to be performed when the worker is “waiting or holding oneself ready to work” (see Regulation 285/01, s. 1.1)
- Uber violated Section 23(1) by failing to pay the Minimum Wage. The amount ordered was $325.07. According to the ESO:
During the audit, it was revealed that the claimant did not consistently receive minimum wage for his hours worked. Minimum wage violations were found in 16 pay weeks between December 2020 to December 2021. The lowest hourly wage rate paid was $3.41 during the December 27, 2021, to January 02, 2022 pay week.
- Uber violated Sections 26 and 28(1) by failing to pay Sharma holiday pay for 12 holidays he worked during the relevant period of December 14 2020 to January 2, 2022. Amount ordered: $351.56 plus $47.52 for premium pay.
Therefore, in the end Uber was ordered to pay $919.37 for various violations of the ESA. We will watch how the OLRB deals with this case and others before them that raise the question of employee status of digital platform workers. However, this ESO decision confirms that there is a very strong case that these workers are already “employees” under employment standards legislation. This reality colours all debates about new legislation to regulate work in the digital platform economy.
New laws, such as the one proposed by the Ontario government, need to be assessed based on a starting presumption that these workers are presently covered by ESA legislation and that the companies are violating the laws daily. If that is the case, then why would governments intervene to legislate fewerlegislative protections under the guise of helping workers? There may be sensible reasons to create some special rules for certain types of atypical work. Reasonable people can debate these issues. But we must start from a position of honesty and full disclosure. We cannot pretend that laws are protecting workers when in truth those laws are taking existing rights away.