Written by David Doorey, York University
Yesterday, the Ontario government dropped a final report of the “Ontario Workforce Recovery Advisory Committee” (OWRAC). There will be lots of discussion of the Report on blogs (including this one), social media, and the real media in the days to come. In this quick piece, I will focus on one little part of the Report. That part is discussed on pages 65 to 68 and culminates in Recommendation 15:
Create and recognize the dependent contractor category for gig or platform workers in the app-based space and give this category of worker basic employment rights, such as termination pay, minimum wage, minimum or core benefits, regular payment of wages, pay stubs for pay accountability and notice of termination with severance entitlement.
The text preceding this Recommendation notes that “69% of Ontario residents” want “technology platform or gig workers” to receive to be treated “the same as traditional workers” when it comes to employment law entitlements. If the OWRAC acted on that strong mandate, the recommendation would be simple: add language to the ESA making it crystal clear that “technology platform” or “gig” workers are covered by the ESA. Full stop. Is that what Recommendation 15 does?
The Recommendation appears to call for the addition into the Employment Standards Act of “the dependent contractor category”. We know what a “dependent contractor” is because it has existed in common law and under the Labour Relations Act for many years. As I will discuss later, there is good reason to believe that many “platform app workers” are already covered by the ESA, but adding “dependent contractor” to the definition of employee under the ESA would certainly end any doubt about that.
However, the OWRAC doesn’t stop at recommending “dependent contractor” be added to the ESA. The Recommendation inexplicably goes on to include a “such as” list of examples that includes some ESA entitlements but not others and includes wishy-washy language like “minimum or core benefits” that lacks clarity. A “such as” list is usually intended to be non-exhaustive. However, why include a non-exhaustive list of legal entitlements at all? Why not just leave out everything from “such as” onwards?
That is precisely what the Changing Workplaces Review recommended (Recommendation 125). The CWR recommended simply that, “The definition of employee in the Employment Standards Act, 2000 should be expanded to include a dependent contractor defined, as in the Labour Relations Act, 1995”. The Ontario government has been sitting on this recommendation for years without any action. The CWR also recommended a reverse onus, placing the burden of proof on a business to prove that a worker is NOT an employee. How the OWRAC failed to recommend that the government re-instate the reverse burden (which the Tories repealed in 2018) is beyond me. A reverse burden appears in virtually every proposal for addressing employee misclassification. I can only assume the OWRAC didn’t want to embarrass the Conservatives by proposing a law they just repealed, what with the embarrassment of the partial reinstatement of sick days already stinging.
By adding the non-exhaustive list, the OWRAC elected to leave the Recommendation unnecessarily vague. The government can now treat this as an exhaustive list, exempt platform workers from ESA entitlements not listed (hello hours of work, overtime, etc.), and assert that they “are just following the recommendations of the Committee”. I presume this is precisely the plan so watch for any Bill coming out of this Report to carve out platform workers from certain ESA entitlements.
Let’s now unpack Recommendation 15 a little more. In the Report, the OWRAC states that “while an employee and an independent contractor are defined and recognized in the act, a third category of worker merits attention.” First, I don’t know what the OWRAC is talking about. Show me where the ESA defines an “independent contractor”. Second, the idea of a so-called “third category” is hardly knew to the Canadian law or to the ESA. Thousands of Ontario employees already fall into a “third” category, by which I presume the OWRAC means a category of worker that is entitled to some but not all entitlements provided in the ESA.
The ESA is a labyrinth of rules and exemptions that carve out special legal regimes for all sorts of workers. Grab a coffee and read through some of the 21 current Regulations to the ESA if you want to immerse yourself in the weird world of employment standards coverage and “third categories”.
[There’s already over 20 regulations that create dozens of special “third” categories of employees in Ontario]
Regulation 285/01 alone carves out special legal regimes for dozens of jobs. For fun, try to figure out how the ESA treats taxi drivers—remember them, the workers who used to drive you around before Uber and Lyft arrived? Are they entitled to minimum wage? Overtime pay? How about managers? They are clearly employees, but what parts of the ESA don’t apply to them? And what is a “manager” anyways? These workers, and many, many others, are governed by a “third category” of worker classification. They are “employees” and therefore covered by the ESA, but only partially. The government cherry-picks which ESA entitlements apply to them and which don’t. Therefore, it is a fallacy to think our current ESA recognizes only two categories of worker, “employees” and “independent contractors” and that the OWRAC is proposing a “new” third category.
So, what is the OWRAC really saying here? The Report states that “under a proposed third category, some workers for platform-based apps would be considered dependent contractors while retaining some of the flexibility—such as time allocation across multiple employers and work hours.”
Let me put this into plain language. The proposal is to expressly include “some” (?) platform workers under the ESA, but then to cherry-pick which ESA rights apply to them. For example, it is easy to imagine the government adding a section to the ESA near the front that adds “dependent contractor” to the definition of “employee” just like is done in the Labour Relations Act and as recommended by the CWR. However, my guess is that won’t happen and instead the government will fandangle the revision so that it only applies narrowly to “platform-based app” workers defined in some manner and not all dependent contractors. We’ll see.
Then, once the app workers are brought into the ESA, the government can clarify that their entitlement to coverage under the ESA is subject to Regulations (as “prescribed”). The government then either introduces a new Reg specifically for these workers or revises existing Regs to define the scope of app workers’ entitlements.
There are lots of examples of the former technique already. For example, here is the special Regulation for “Public Transit Services”. I assume that a Reg for platform-based app employees would exclude the workers from various parts of the ESA, including maybe hours of work, overtime pay, and who knows what else. That Regulation will also probably address one of the elephants in the room, which is how minimum wage and “working time” is to be calculated. Does it include waiting times? Only time spent after a driver “accepts” a call? These are among the most important questions, but the OWRAC avoids them entirely by simply stating that the workers should be entitled to a minimum wage of some sort.
To place all of this in context, it is useful to understand how the law presently treats platform-based app workers. I have been tweeting about this, but I can elaborate a bit here. The OWRAC’s proposals presume that these workers are not presently covered under the ESA and therefore that the addition of “dependent contractor” would provide these workers with more legal rights than the presently enjoy. However, that is by no means clear. Indeed, I think there is a very strong argument that when the OLRB turns its attention to the status of Uber drivers in upcoming cases already before it, it will find that they are already “employees”.
It is true that the ESA, unlike the LRA, does not expressly include “dependent contractor” within the definition of “employee”. However, in practice, when you read the OLRB decisions on employment status under the ESA closely, it seems that workers who are treated as “dependent contractors” at common law and under the LRA would also be ruled “employees” under the ESA. The reason is that the OLRB has noted, correctly, that the ESA is remedial social policy that should be interpreted broadly to capture as many workers as possible. Recall the Supreme Court of Canada’s words in Machtinger v. HOJ Industries:
The harm which the Act seeks to remedy is that individual employees, and in particular non-unionized employees, are often in an unequal bargaining position in relation to their employers…. Accordingly, an interpretation of the Act which encourages employers to comply with the minimum requirements of the Act, and so extends its protections to as many employees as possible, is to be favoured over one that does not.
The OLRB has commented many times that given the remedial nature of the statute, the scope of “employee” should be interpreted more broadly than under the common law tests for “employment”. For example, this passage from a case called Majestic has been cited on multiple occasions:
Referee Burkett held [in Majestic] that the common law tests were not appropriate for interpreting the scope of the Act when the Act was clearly designed to expand upon or enhance the protections of the common law.
[See for example discussion in Seventy-Five Hundred Taxi]
During the CWR consultations, the Ontario Ministry of Labour’s own Employment Standards Program claimed that “a comparison of the results of worker status cases decided under the ESA and the LRA reveals that the expansive definition of employee under the ESA that is given by the Program, Ontario Labour Relations Board and courts likely captures the types of relationships that would fall into the dependent contractor category under the LRA.”
The point is important. If the ESA already covers app platform-based workers, then the argument can be made that the OWRAC is proposing to take away existing entitlements that these workers should already be receiving but are not because the platform companies are mischaracterizing them as independent contractors. The OWRAC proposal would be taking away existing entitlements because its’ Recommendation 15 seems to be suggesting that some ESA entitlements should not apply to the platform workers, although specifically which entitlements should be excluded is never clarified.
But even this much is uncertain. For example, if Uber drivers are already covered by the ESA, do they fall within the existing definition of a “taxi cab”:
“taxi cab” means a vehicle, with seating accommodation for not more than nine persons exclusive of the driver, used to carry persons for hire
Does that capture an Uber driver? If so, then in fact a third category of ESA entitlement already exists for Uber drivers. That category excludes employees from overtime pay and public holidays, but not from minimum wage and hours of work laws.
There is a lot more I could say about the Report, but this post is already too long. I will just conclude by noting that the OWRAC leaves for me more questions than it answers about how the government might decide to regulate platform-based app work. The Report ignores entire key areas that need to be addressed and is vague even in terms of what it does deal with. I also don’t find it helpful to talk about new “third categories” of workers, as if this is some new concept. As I noted, we’ve always had “third categories” in Canada. There is definitely an argument that the government should abolish all of the special rules and exemptions for occupations found in the ESA and therefore all third categories. I see no reason why an Uber driver should be treated differently than a taxi driver under the ESA. It’s the same job using only slightly different technology. Therefore, if we are arguing that Uber drivers should be entitled to coverage under all ESA entitlements, then we need also to be arguing at the same time for removal of long-standing special rules that apply to taxi drivers.