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Employment status is the only fair future for gig workers


Last week, Uber announced its plan to lobby Canadian governments for an exemption from employment protections for its drivers. Uber claims this would be justified by its proposal for a system requiring it and other gig employers to provide “self-directed benefits” drivers can earn based on their hours worked, along with unparticularized “additional training and tools”.

Uber’s pitch purports to pit flexibility against employment status, but this is a false dichotomy. Employment status would not require Uber drivers to work any minimum number of hours. As employees, Uber drivers could continue to enjoy flexibility, while being afforded the same protections as other employees. Under Uber’s proposal, drivers would be denied core employment protections, including minimum wage, overtime pay, the reimbursement of expenses to ensure their real wages exceed these minimums, and employment insurance.

Uber suggests that it cannot provide its proposed benefits unless it receives its proposed legislative exemptions. But the fact is that nothing prevents Uber from providing these benefits right now. The more likely explanation is that Uber does not want to provide these benefits, because doing so would make it all the more obvious that its drivers should be classified as employees.

Although the details of Uber’s proposal are murky, it is clearly modelled after California’s Proposition 22, the ballot initiative on which Uber and other gig employers spent upwards of $224 million USD to exempt their drivers from employment status in exchange for limited, app-based driver-specific benefits.

Proposition 22 is a dangerous precedent, but there is an important distinction. Unlike in California, Uber and its allies cannot spend hundreds of millions on a ballot initiative to obtain their exemptions, but must instead convince governments across Canada to legislate these changes.

Canadian governments should be loathe to adopt Uber’s proposal. History will reflect poorly on politicians that entrench gig workers’ status as a sub-minimum wage underclass.

Yet while Uber’s proposal must be rejected, that does not mean governments should do nothing. To the contrary, there are important actions they should take right now.

First, governments should proactively enforce the law to ensure gig workers receive basic employment protections. The ongoing failure to act is inexcusable.

Second, reform is needed to simplify the test for employment status. Let us be clear: we are confident that Uber drivers and others gig workers are properly classified as employees under current law. We believe that Uber also knows this to be true, which is why it is mounting its lobbying campaign. However, the determination of employment status in Canada involves complicated, multi-factoral tests which place the burden on workers to challenge their status. Employers like Uber know that most workers will not undertake this challenge.

Fortunately, there’s a better approach that’s already used to determine employment status in many jurisdictions across the United States. Known as the “ABC test”, it provides that a worker is an employee unless the hiring entity can establish that A) the worker is free from its control, both factually, and under the terms of the contract for performing the work; B) the worker performs work outside the usual course of its business; and C) the worker is customarily engaged in an independently established trade, occupation, or business of the same nature as that involved in the work performed. The ABC test also typically contains a business-to-business exemption recognizing that bona fide business relationships are not employment relationships.

How does this test work in practice? Imagine a hypothetical pizza shop. If the pizza shop contracted a plumber to fix its toilet that worker would properly be classified as an independent contractor. Similarly, the ABC test would not capture the pizza shop’s business contracts with its suppliers. However, if the pizza shop tried to (mis)classify its pizza chefs or delivery drivers as independent contractors, the ABC test would properly recognize that these workers are employees and entitled to basic protections. The strength of the ABC test is that it provides predictability and clarity to workplace parties. What is more, by shifting the onus on employers to establish that individuals are not employees, it removes some of the barriers employees face in enforcing their rights.

Gig workers around the world are fighting for employment status and fairness at work – and winning. Most recently, the UK Supreme Court ruled that Uber drivers are workers and not self-employed. Our elected officials should support gig workers by enforcing the laws on the books and clarifying their status as employees, not pull the floor out from under them.