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Common Law of EmploymentEmployee Classification

What Does Uber’s Decision to Treat Drivers as ‘Workers’ in UK Mean for Canada?

by David Doorey March 17, 2021
written by David Doorey March 17, 2021

Written by David Doorey, York University

Yesterday Uber announced to great fanfare that it intended to abide by a recent ruling of the UK Supreme Court finding that its drivers are “workers” as defined in British employment protection statutes. The Court’s finding entitled Uber drivers to statutory entitlements under the National Minimum Wage Act, the Working Time Regulations, and various other protections from reprisals under the Employment Rights Act in Britain.

In its announcement yesterday, Uber said that it would begin paying the minimum wage and holiday pay and that all drivers would be enrolled in the company’s pension plan. There were however significant caveats in the fine print. The minimum wage will be calculated “after expenses” but based only on time “after accepting a trip request”.  The question of whether gig drivers should be considered working and therefore entitled to be paid for time spent waiting to receive a trip is a contentious one being fought worldwide. The UK Supreme Court states quite clearly that Uber drivers are working while logged into the app and waiting for a ride:

For the purpose of the Working Time Regulations 1998, “working time” is defined….in relation to a worker, as “any period during which he is working, at his employer’s disposal and carrying out his activity or duties”.  There is no difficulty in principle in a finding that time when a driver is “on call” falls within this definition.

The Court side-stepped the trickier question of who is responsible for paying the minimum wage when the driver is simultaneously logged into multiple apps at once, finding that there was no evidence before the court that this happened and that the issues would need to be decided based on the factual record.  Uber’s announcement indicates that it intends to ignore the Supreme Court’s finding and pay only for the time after the driver has accepted a ride.

In this short post, I want to think about the events in the UK through a Canadian employment law lens. What is the Canadian equivalent of the British “worker” category and what would it mean in Canada if Uber (and other platform companies) agreed that its drivers fall within this category or a Canadian tribunal ruled the same.

The UK Worker Category

I learned British Employment Law many years ago in my graduate studies at LSE, but mostly I now harass my British colleagues (Hello Alan Bogg, Ruth Dukes, and others!) about the law.  Here is a basic overview of the central issue raised in the Uber decision. A “worker” is defined in Section 230 of the Employment Rights Act in typically convoluted and circular language similar to that found in employee classification language in Canada. The UKSC summarized the law as follows:

The effect of these definitions, as Baroness Hale of Richmond observed in Bates van Winkelhof v Clyde & Co LLP [2014] UKSC 32; [2014] 1 WLR 2047, paras 25 and 31, is that employment law distinguishes between three types of people: those employed under a contract of employment; those self-employed people who are in business on their own account and undertake work for their clients or customers; and an intermediate class of workers who are self-employed but who provide their services as part of a profession or business undertaking carried on by someone else. Some statutory rights, such as the right not to be unfairly dismissed, are limited to those employed under a contract of employment; but other rights, including those claimed in these proceedings, apply to all “workers”.

Uber drivers were found to fall within the “worker” category.  As Alan Bogg explains in this excellent summary of the decision, the UK Supreme Court adopted a purposive approach to the interpretation of worker protection statutes which looks beyond the strict contract language to the broader context in assessing whether the protections should extend to the workers in question.

A similar approach has guided Canadian courts and tribunals in the interpretation of employment standards legislation.  As noted by the Supreme Court of Canada in the 1998 decision Rizzo v. Rizzo Shoes, “since the ESA is a mechanism for providing minimum benefits and standards to protect the interests of employees, it can be characterized as benefits-conferring legislation.  As such, according to several decisions of this Court, it ought to be interpreted in a broad and generous manner. Any doubt arising from difficulties of language should be resolved in favour of the claimant.”

Employee Classification in Canada

At a general level, Canada also recognizes three categories of worker: employees, dependent contractors, and self-employed entrepreneurs (independent contractors).  Figure 4.1 from my text The Law of Work maps out these categories. These categories align roughly with the British categories of employee, worker, and independent contractor.  However, this description over-simplifies the reality that there are in fact dozens of categories of worker recognized in Canadian employment law statutes.  That is because there are loads of rules and exemptions that create special legal regimes for different sorts of “employees”. To provide just one of many examples, different rules apply to workers employed on alpaca farms than apply to workers on ostrich farms.  I will come back to this point shortly.

Similar to the “worker” category in Britain, “dependent contractors” in Canada are entitled to some but not all of the legal entitlements that protect “employees”.  In the common law, ‘dependent contractors’ are treated like employees for the purpose of entitlements to receive “notice of termination.” Courts have reasoned that a dependent contractor stands in a position similar to an employee in the sense that they are economically dependent upon one or maybe two businesses for all of their work. This is the lesson of cases like Keenan v. Canac Kitchens.  It’s an interesting question whether an Uber driver is a “dependent contractor” in the common law and therefore entitled to damages for failure of Uber to provide notice of termination if the driver is removed or suspended from the platform.  Given that “exclusivity” or near exclusivity is a key element of the test for dependent contractor in the common law, a driver’s argument would likely be weaker if they drive for a variety of platforms.  I’m hoping to see a wrongful dismissal lawsuit filed one day by an Uber driver so we can see how a court deals with that question.

The “dependent contractor” category is explicitly recognized in some of Canada’s collective bargaining legislation.  For example, section 1 of the Ontario Labour Relations Act defines an “employee” as including a “dependent contractor”. Dependent contractor is then defined as follows:

“dependent contractor” means 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;

The benefit of this approach is that a dependent contractor is treated identical to an employee: for the purposes of the statute, a dependent contractor is an employee. The practical result is that dependent contractors enjoy all the same rights and protections as employees to join unions and engage in legally regulated collective bargaining.  The 2020 Ontario Labour Relations Board decision finding that Foodora couriers are “employees” and covered the LRAwas not a surprise to those well versed in the scope of the dependent contractor category.  I would be surprised if the OLRB does not similarly rule soon that Uber Black drivers are also employees.

Much less clear is whether Uber drivers are “employees” under employment standards legislation and entitled to minimum wage, holiday pay, and various other protections offered employees. The uncertainty arises because employment standards legislation in Canada does not explicitly define “employee” as including dependent contractors.  There are decisions finding taxi drivers and other contractors to be “employees” for the purposes of employment standards, but those cases tend to involve clearer facts than your typical Uber case.  For example, taxi drivers are employees when the dispatch company owns the car and taxi licence and “leases” it out to a driver. It is harder to find employment standards decisions finding employee status when the driver is an owner-operator who owns their own vehicle and can decide when or if to work at all and can drive for multiple dispatch companies at once, which is analogous to the Uber driver.

I’m not suggesting that Uber drivers cannot possibly meet the definition of an “employee” in Canadian labour standards law. Facts will matter.  This very issue is raised by the ongoing class action litigation in Heller v. Uber.  My point is simply that it is not a slam dunk that the British decision finding that Uber drivers are “workers” and therefore entitled minimum wage and holiday pay translates to Canadian labour standards.  The case would have been made immeasurably more straightforward in Ontario had the government adopted the recommendations of the Changing Workplaces Review to expand the definition of employee in the Employment Standards Actto include “dependent contractors” along with adoption of a reverse onus requiring the company alleging that a worker is not covered by the legislation to prove the person is an “independent contractor”.

If Uber drivers are found to be “employees” for the purpose of employment standards legislation in Canada, new questions arise.  For example, is an Uber driver a “taxi cab” driver?  In Ontario, Regulations define a “taxi cab” as a vehicle, with seating accommodation for not more than 9 persons exclusive of the driver used to carry persons for hire”. That seems to apply. A taxi cab driver is not entitled to overtime pay and public holiday provisions don’t apply, but is entitled to other statutory labour standards, including the minimum wage. In calculating hours worked in Ontario, an employee is “deemed” to be working when work is “permitted or suffered to be done by an employer” or,

(b) where the employee is not performing work and is required to remain at the place of employment,

(i) waiting or holding himself or herself ready for call to work, or

(ii) on a rest or break-time other than an eating period.

This language mirrors quite closely the UK language noted above and there is certainly a strong case to be made that it would include an Uber driver who is logged onto the Uber app and awaiting the assignment of a ride. I doubt that Uber could successfully argue here that a driver is only working after they accept a ride and then during the ride.  I do think though that the law would need to sort out who is employing a driver when they are sitting in a parking lot signed into two or three apps at once.  It can’t be that all three platforms are required to pay the employee for the same waiting period. Probably the simplest and most sensible solution is to assign the wage obligation to the platform that offers the ride that is accepted by the driver. That approach links the expense to the revenue in a sensible manner.

So where does this leave us?  If Uber drivers were treated as “dependent contractors” in Canada, then they might entitled to common law reasonable notice of termination, depending on how courts apply the “exclusivity” factor in assessing if the driver is an independent or dependent contractor.  They would be entitled to unionize and be covered by collective bargaining legislation in at least some provinces.  However, it is less clear whether dependent contractor status can do the work to gain Uber drivers access to employment standards legislation in Canada.  That much remains to be seen.  Governments could, of course, end the uncertainty by proactively extending labour standards coverage to platform workers like Uber drivers.  There are a number of ways that this could be done–adding dependent contractor to the definition of “employee”, introducing a new broader test like the ABC Test used in California, or by developing a separate category that regulates platform drivers (see my discussion of the “Autonomous Worker” category initially proposed by Harry Arthurs).  All we know for certain is that the debate over the legal status of Uber Drivers is far from over in this country.

David J. Doorey, “What Does Uber’s Decision to Treat Drivers as ‘Workers’ in UK Mean for Canada?” Canadian Law of Work Forum (March 17 2021): https://lawofwork.ca/uberworkerstatus/

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David Doorey

Professor Doorey is an Associate Professor of Work Law and Industrial Relations at York University. He is the Director of the School of HRM at York and Director of Osgoode Hall Law School’s executive LLM Program in Labour and Employment Law and on the Advisory Board of the Osgoode Certificate program in Labour Law. He is a Senior Research Associate at Harvard Law School’s Labor and Worklife Program and a member of the International Advisory Committee on Harvard University’s Clean Slate Project, which is re-imaging labor law for the 21st century

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Kovintharajah v. Paragon Linen & Laundry: When Failure to Accommodate Child Care Needs is “Family Status” Discrimination

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CanLawWorkForumCLWF@CanLawWorkForum·
17 Mar

New on @CanLawWorkForum from Prof David Doorey (@TheLawofWork)

#Uber #WorkerClassification #EmpLaw

David J. Doorey@TheLawofWork

Lots of chatter about Uber announcing it will kind of, sort of treat drivers as "workers" in the UK.

How does the UK's "worker" category compare to Canada's "dependent contractor" status? Some thoughts in my new post here on @CanLawWorkForum:

https://lawofwork.ca/uberworkerstatus/

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CanLawWorkForumCLWF@CanLawWorkForum·
10 Mar

Good day to reflect back on this recent timely post explaining the PRO Act that would dramatically alter U.S. labor law.

For labor law students:

What changes in the PRO Act are already law in all or parts of Canada?

David J. Doorey@TheLawofWork

A primer for Canadians by ⁦@Harvard_Law⁩’s Jonathan Levitan on what is contained in the U.S. Protecting the Right to Organize (PRO Act) which recently passed in the House south of the border.

(From ⁦@CanLawWorkForum⁩) https://lawofwork.ca/amp/bidenagenda

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RSandillRicha Sandill@RSandill·
24 Feb

@SCLSclinic and I were so fortunate to represent this client last year. I am thrilled that this decision brings more clarity for family status accommodations rights amidst a pandemic that has tested parents, caregivers, and families like never before. https://twitter.com/CanLawWorkForum/status/1364605259071561730

CLWF@CanLawWorkForum

New from @RSandill (counsel for applicant), discussing important new "family status" discrimination decision from OHRT:

"Kovintharajah v. Paragon Linen & Laundry: When Failure to Accommodate Child Care Needs is “Family Status” Discrimination"

https://lawofwork.ca/13360-2/

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