On December 9, the Ontario Workforce Recovery Advisory Committee (OWRAC) released its final report on “the future of work” in the province. This past June, the OWRAC, set up by Ontario Minister of Labour, Training and Skills Development, Monte McNaughton, was tasked with studying ways to improve skills and training development and “ensure our labour and employment policies reflect the rise of knowledge and technology sectors.”
At the time, I warned that this committee would likely not bode well for workers, particularly app-based workers, whose employment status I assumed would be a primary topic of consideration for the committee. I and others argued that the lack of any labour representation on the OWRAC, combined with its extremely short consultation period of only four weeks, likely spelled bad news ahead.
Chair of the OWRAC, Rohinton P. Medhora (the original chair, Susan McArthur, left her post to run as a Conservative Party candidate in the last federal election), writes in the preamble to the new report that, “The idea of the committee was very much to bring expertise to the table, listen and learn.” With such a truncated consultation process, this is hard to believe.
Additionally, the committee was struck on the heels of an active lobbying initiative by Uber to launch what it termed “Flexible Work+” in Ontario, a plan to maintain gig workers’ independent contractor status in exchange for providing a few small economic perks. Uber and other technology companies, fresh from the Proposition 22 victory in California, were taking their fight against employment law global.
In this context, it was relatively safe to assume that a committee largely made up of tech and finance people was unlikely to propose much by way of employment law reforms to benefit workers. It brings me no pleasure to report that the OWRAC’s release is largely as expected. Instead of advocating for improving the pay and working conditions of gig workers by granting them full benefits and protections under the Employment Standards Act (ESA), the OWRAC offers a vague and entirely unworkable series of faux solutions.
The committee’s final report makes 21 recommendations for employment law and other public policy reforms. Many of these suggestions deal with skills, training and other “workforce development” issues. I will largely leave these aside — except to note that the report frequently uses the supposed “labour shortage” currently gripping the economy to frame these issues. There’s nothing like some mild tightening of the labour market and modest wage pressure — both good news for workers — to send employers and their advocates into a frenzy.
I want to focus on the portion of the report on employment status. Given what a hot-button issue this has become with the growth and spread of the so-called “gig economy,” employment status continues to be a key battleground for labour advocates.
In the lead up to this section of the report, the OWRAC seeks first to protect the status and “flexibility” of “highly skilled” and “well-compensated” independent contractors. This tells us something about the OWRAC’s priorities. The committee says that it would like to see the provincial government clarify the status of these workers — particularly in light of the divergent definitions of “employee” between the Canada Revenue Agency and the ESA.
The committee is correct to point out that there’s a huge range of workers who currently fall under the “independent contractor” umbrella. This is one of the major challenges when crafting policy to protect such workers. A small subset of them do quite well on their own and have little interest in social protection. The OWRAC’s fear, I presume, is that too wide an application of “employee” status will somehow harm the position of the most economically privileged group of contractors.
On the other hand, it’s worth pointing out that courts have long recognized employment standards legislation should be interpreted as broadly as possible. The reason for this is that the ESA is “remedial social policy,” meant to protect vulnerable, non-unionized workers with low individual bargaining power. This public interest purpose of the legislation should never be overridden out of concern for how a wide application of the law might limit the flexibility of the most privileged substratum of contractors.
However, the recommendation which has, rightly and understandably, received the greatest attention since the report’s release deals with the employment status of gig or “app-based” workers.
This recommendation (number 15, for those reviewing the report) reads as follows: “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.”
“Recommendation 15” has rightly been subjected to much criticism by others already, but let’s delve a little deeper into the many issues with the OWRAC’s proposal.
To start, the “dependent contractor” category has a long history in Canadian common law and labour relations. Essentially, its purpose is to aid those who sell their labour to one or more contracting entities on whom they’re structurally dependent. Those classified as dependent contractors are covered by the Ontario Labour Relations Act, for example, and can form or join unions in order to increase their bargaining power with the businesses who contract their services. On the other hand, dependent contractors are not covered by the ESA, which sets minimum standards for non-union employees such as the minimum wage, working time regulations, vacations and holidays, and rules governing termination and severance.
In effect, the OWRAC is calling for what has been referred to as a “third category” between an independent contractor (basically a self-employed person operating their own “commercial enterprise”) and an employee with access to full employment and labour law protections. Although it was celebrated as a victory for gig workers at the time, this is essentially what happened in the United Kingdom when in February the Supreme Court ruled that Uber drivers there are “workers” and not self-employed. Under U.K. labour law, “workers” constitute a sub-category without the full rights and protections of an “employee” (though they are entitled to the minimum wage).
Next, the recommendation suggests that “dependent contracting” gig workers should be entitled to “basic employment rights,” whatever this is supposed to mean. The ESA does not set out some employment standards as “basic” and others as “superfluous.” The recommendation then lists minimum wage, pay stubs, termination pay, termination and severance protections, and something they call “core benefits,” which has no correspondence to anything in the Act. What this implies is that the OWRAC imagines that gig workers, once classified as dependent contractors, will only be covered by a portion of the ESA. It’s unclear to me whether their list of “basic rights” is a full recommendation of what to give app-based workers access to or just an example.
What immediately stands out is that no mention is made of standards addressing the regulation of working time in OWRAC’s recommendation. This is a glaring omission given how central the fight over time has been to gig work and its legal status thus far.
For example, are Uber drivers “working” while they wait for customers, or only when they are driving passengers? If app-based workers aren’t covered by the ESA’s provisions around working hours, how exactly will it be possible to determine whether or not they’re being paid the minimum wage, or whether or not they’re receiving correct vacation pay as a percentage of their earnings? A carve-out from one standard (e.g., working time) can easily domino into an undermining of entitlements under other standards. This is why “partial rights” can be so problematic.
The committee seems to be suggesting that bringing “dependent contractors” under the ESA and providing them with some subset of rights and entitlements through the Act would be an innovation in this regard. This is entirely false. Ontario’s ESA and its attendant regulations are already full of special rules and exemptions that limit entitlements to particular classes of employees on an occupational or industrial basis. In other words, there are already “subcategories” of employees covered under the ESA but not entitled to all of the Act’s protections. What the OWRAC is basically saying is “give gig workers some, but not all, employment rights.” But it’s not clear which ones exactly they think these workers should have, or what their rationale is.
Beyond this, the committee is silent on the question of dependent contractors who aren’t “gig workers.” If, as they suggest, all gig workers are dependent contractors, it doesn’t follow that all dependent contractors are gig workers. As I mentioned above, dependent contracting predates app-based work by decades. Is the OWRAC suggesting that the addition of “dependent contractors” to the ESA should include only those performing app-based work? If so, what is the reasoning behind excluding all other dependent contractors from employment standards protections? There isn’t any such reason.
The simple solution to all this mess is to include gig workers as employees with full rights under the ESA. If the objective is to protect app-based workers to the same degree as all other employees in the province, this is the obvious course of action. Indeed, it’s the solution that the Ontario Federation of Labour, the Canadian Labour Congress and most importantly, organized gig workers themselves demand.
Labour law professor David Doorey has argued that gig workers are likely already covered by the ESA, in which case the tech companies are just violating the law and the government is not doing anything about it. If this is correct, adding language to the ESA that explicitly says “gig workers are employees” would suffice — along with directing the Ministry of Labour to start enforcing the law, of course. Dependent contractors could then also be included under the ESA, but this wouldn’t bear on whether or not gig workers are covered.
How Ontario Premier Doug Ford’s Conservative government chooses to act on the recommendations from the OWRAC report remains to be seen. For labour and the left, the fight to ensure that gig workers have full employment rights continues. Unsurprisingly, the OWRAC report does nothing to advance that struggle.
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