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To Be or Not To Be (An Employee): Employment Standards vs the Gig Economy

A Manitoban plaintiff has filed a class action lawsuit against the homegrown delivery service company, Skip the Dishes, reviving the debate over whether contractors for online services are truly independent contractors or are actually employees entitled to protection under employment standards legislation. Skip the Dishes operates an Uber-style online service that connects restaurants and hungry customers by facilitating food delivery through its website and mobile apps.

In July, Charleen Pokornik, a delivery driver for Skip the Dishes filed suit in the Manitoba Court of Queen's Bench, claiming that she and her colleagues are actually employees of the company, and that as a consequence, they are covered by the standards provided in provincial employment standards codes, such as minimum wage, overtime, and holiday and vacation pay.  If the action is certified in Manitoba, it will potentially impact contractors with the company in each jurisdiction where it operates, including British Columbia.

Traditionally, independent contractors have been excluded from the purview of employment standards protections. In B.C., the Employment Standards Act, R.S.B.C. 1996, c. 113 (the "ESA") only applies to "employees." To determine whether a worker is an employee, decision-makers take a holistic approach that looks at a variety of factors including, but not limited to:

  • control and direction over work;
  • ownership of tools and equipment;
  • ability to subcontract;
  • exclusivity of service;
  • the degree of financial risk; and
  • the opportunity for profit. 

In McCormick v. Fasken Martineau DuMoulin LLP (2014 SCC 39), the Supreme Court of Canada placed particular emphasis on the degree of control over the worker exercised by the alleged employer and the corresponding dependency of the worker.

The Skip the Dishes suit places before the courts the question as to whether facilitating services between consumers and restaurants creates the necessary degree of control and dependency to be considered employment under employment standards legislation. The question is compounded by the fact that genuine employers, including large restaurant chains, are frequently the beneficiary of these services, which alleviate the need for them to retain their own delivery employees.

A recent independent review of the ESA (discussed in our previous post here), recommended maintaining the existing exclusion of independent contractors from the act, despite acknowledging monumental shifts in the economy since the ESA was established. However, the project committee recognized that the inequality in bargaining power suffered by some independent contractors may require legislative intervention designed to protect those workers.

In Ontario, concerns about the exclusion of independent contractors led to an amendment to that provinces employment standards code (discussed in our previous post here) making it illegal to misclassify an employee as an independent contractor. Although there will be no decision on the merits of this case for several years, businesses who rely largely on independent contractors should take note that similar challenges could be on the horizon. Such businesses may want to take this opportunity to review their relationship with workers classified as independent contractors in order to determine to what extent indices of employment exist.

All members of our Labour, Employment & Human Rights Group at Lawson Lundell LLP have extensive experience in this area and would be happy to assist your business with any questions you may have with respect to determining the status of workers, drafting contracts of employment, and observing employment standards minimums.

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Lawson Lundell's Labour and Employment Law Blog provides updates on the most recent legal developments impacting the Canadian workplace and offers practical tips for employers. We cover a range of topics, including labour relations, employment law, collective bargaining, human rights, employment standards, employment equity, workers' compensation, business immigration, privacy, occupational health and safety and pensions and employee benefits. 

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