Labour Board rules that Foodora couriers can unionize

March 2, 2020 | Greg Bush, Catherine Phelps

In Canadian Union of Postal Workers v Foodora Inc., released on February 25, 2020, the Ontario Labour Relations Board (the “Board”) held that Foodora couriers can unionize under the Labour Relations Act, 1995 (“Act”) on the basis that they are “dependent contractors”, a category of workers falling in between the traditional categories of employee and independent contractor. In this highly anticipated decision, the Board stepped into the modern era and offered clarity on the status of individuals working in the “gig economy”.

The Board’s decision followed a certification application filed by the Canadian Union of Postal Workers (the “Union”) to become the exclusive bargaining agent for a group of Foodora couriers working in Toronto and Mississauga.

The Union argued that Foodora’s couriers, who deliver food to customers through the company’s app-based delivery service, are dependent contractors with the right to unionize under the Act.  Foodora, on the other hand, argued that its couriers are not employees but, rather, independent contractors, meaning they are unable to unionize. The distinction between a dependent contractor and an independent contractor is significant as the term “dependent contractor” is defined in the Act and the definition of “employee” in the Act specifically includes “dependent contractor”.

The Board considered a range of well-established factors to determine the nature of the relationship, including:

  • the use of or right to use substitutes or subcontractors to perform the work;
  • the ownership of tools, equipment, appliances, or the supply of materials;
  • the degree of entrepreneurial activity and opportunity;
  • the ability of the individual to sell their services to the market generally;
  • the individual’s economic mobility or dependence;
  • the individual’s ability to negotiate or alter their fees;
  • the extent to which the individual is integrated into the organization; and
  • the degree of control of the manner and means of performing the work.

The Board found that the vast majority of these factors favoured the conclusion that Foodora couriers are dependent, rather than independent, contractors:

  • Foodora’s couriers do not substitute or subcontract their work to other individuals, nor does Foodora permit them to do so.
  • While couriers are required to supply several tools to perform their work, including their delivery bag, smart phone, bicycle, helmet, and, on occasion, a car, the Foodora app itself, which was exclusively owned, developed, and controlled by Foodora, is the “lynchpin” in the company’s operations and the single most important part of the delivery process.
  • Couriers do not have the opportunity to increase their compensation through anything other than their labour and skill. The Board held that merely “working harder” (and earning more money) does not transform the work into an entrepreneurial activity. Foodora’s operations also restrict couriers’ ability and opportunity to make a profit since they are not able to advertise or promote their service, skill, or ability, including to the restaurants or customers who contract with Foodora.
  • When a courier accepts a shift, they are expected to give priority to Foodora. While they are permitted to deliver for other courier services or have other jobs, Foodora requires that its service standards be given priority. There was also evidence that the couriers were not aware that they were able to work for other competitors, though some did this but made efforts to ensure Foodora was not aware of the work for competitors.
  • Foodora controls virtually every aspect of a courier’s relationship with the company, including the offering and structure of shifts, the courier’s obligations once they accept a shift, and the courier’s mobility during the shift. Foodora offers couriers no opportunity for job promotion, skill enhancement, or development.
  • All Foodora couriers share the same terms and conditions as determined by Foodora and have no independent opportunity to vary their rate.
  • Couriers are heavily, if not entirely, integrated into Foodora’s business as Foodora’s revenue depends entirely on the reliable and timely delivery service of the couriers. Foodora’s couriers are merely a “cog in the economic wheel” of the Foodora operation and are an integrated component to the financial transaction.
  • Foodora has implemented numerous controls on the generation and flow of work. Couriers perform their work under the watchful eye of Foodora’s dispatchers and risk being penalized for conduct ranging from unreported “mis-clicks” on the app to failing to show up for a shift.

Throughout its decision, the Board highlighted the ways in which Foodora controls almost every aspect of the couriers’ relationship with the company. Central to Foodora’s operation is its app, through which the company can organize its workforce, keep tabs on the couriers’ performance, and administer a progressive discipline regime. The Board ultimately concluded that “[in] a very real sense, the couriers work for Foodora, and not themselves.”

The Board acknowledged that this is its first decision with respect to workers engaged in the gig economy. However, it stressed that the analysis was no different in many respects from other cases in which it has considered the status of workers. Though the gig economy has given rise to novel work arrangements, this decision suggests that the Board will use the same tools to assess the status of workers employed in this economy.

Please contact us if you wish to discuss how this decision may affect your company’s operations.

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