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At Foodora, A New Twist In Battle Over Contract Labor

An intensifying battle between the food delivery company Foodora and its Toronto drivers could result in Canada's first unionized app-based workforce. That would lend fuel to a global movement aimed at improving working conditions of contractors in the fast-growing gig economy.

In August, Foodora's Toronto couriers voted on whether to join the Canadian Union of Postal Workers (CUPW). But the results remain sealed until the Ontario Labor Relations Board weighs in on several issues, including whether couriers are employees or independent contractors, and whether all of the couriers had a right to vote.

A board hearing is underway this week.

Setting a precedent

The union drive marks a watershed moment for tech-enabled gig-economy workers, said Sara Slinn, a professor of labor and employment law at Osgoode Hall Law School, a program housed at York University in Toronto.

"It is important from a legal precedent point of view, and it is important from a general labor and capital regulation perspective about how to conceptualize platform work," Slinn said. "More immediately, it's important for these particular workers and the particular employer."

Founded in Munich in 2014, Foodora acquired Canadian food delivery services Hurrier in 2015, with a rebrand following a year later. The company operates in five countries worldwide, and has a presence in seven Canadian cities.

Foodora did not respond to FreightWaves' request for comment. But in a statement, the company pushed back against the Ontario organizing effort, arguing a successful drive would undermine its operations.

"A third-party business would interfere with our current open-door policy at our Toronto office, where our couriers can drop by at any time to discuss their challenges or issues with us," the company said. "Their feedback, whether in person, by phone or email, directly influences the features and developments to the platform that we continue to push for from our global team."

Jan Simpson, CPUW's national president, begged to differ. In an email sent to FreightWaves, she said the union would offer workers a much-needed safety net.

"As gig work continues to grow, we are left with a large group of workers who are completely unprotected," Simpson wrote. "All workers deserve rights and protections, and the Foodora unionization vote will set a precedent for labor rights for years to come."

A broader debate

The union campaign fits into a broader debate unfolding around the globe about how to classify gig-economy workers. In a landmark decision, California lawmakers on September 10 passed a controversial bill, AB 5, which will require app-based companies like Uber and Lyft to provide employee benefits to their contract workers.

The organizing effort also highlights an important difference between U.S. and Canadian labor laws, a distinction that may foreshadow the next phase of worker organizing in the states.

The dependent contractor

Drawing a contrast with U.S. practice, Slinn said a worker category known as the "dependent contractor" is solidly enshrined in Canadian statute. Falling somewhere between a full-time employee and contract worker, a dependent contractor refers to an individual who operates as an independent business but works primarily for one company.

Like Canadian employees, dependent contractors are entitled to receive notice and severance pay before being let go.

According to Slinn, the general trend in Canadan courts leans toward finding that dependent workers meet the legal definition of an employee. In Ontario, where the Foodora case is being adjudicated, the governing legislation explicitly states the term employee includes dependent contractors.

That framework supports the union campaign, which hinges on reclassifying the company's independent contractors as employees. To get closer to that goal, CUPW is seeking to redefine the couriers as dependent contractors, an effort the union has undertaken successfully in the past.

"We have dealt with this type of employer before, and we have won," Sampson said.

Foodora itself has done battle with unions in other parts of the world — and lost. The company pulled out of Australia last year after being hit with lawsuits from organized labor.

Mixed political signals

Whether workers will prevail in Ontario is unclear. Last year Premier Doug Ford rolled back provisions that supported independent contractors. But other political winds are blowing in the union's favor.

Slinn cited a recent case in Nova Scotia involving a film industry contractor working short-term jobs with a limited number of employers. Even though he had more than one employer, Slinn said, the court found that he was a dependent contractor because he was working within one industry and a well-defined set of companies.

"There is a recognition that the nature of work and the nature of the economy is changing," Slinn said.

If the labor board unseals the vote and certifies the union application, Foodora drivers can commence collective bargaining, Slinn said, and "the employer is required by law to recognize them."

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