The Federal Government has just completed its public consultation on “gig work”. Gig work is defined by that consultation as short-term work or one-off projects through digital platforms.
We offer the following three observations on what makes this a key moment to be addressing gig work and the so-called gig economy.
First, the COVID-19 pandemic exposed the inadequate floor of protections for gig workers and other Canadian workers denied employment status and the workplace protections that come with it.
Second, gig economy giants like Uber have started proposing their own schemes for classifying their workers: schemes which ensure that they are not employees and give them some minimal benefits – precluding those workers receiving the benefits and protections that all other employees view as the very minimum standard for any decent work. This is a clear sign that these employers know change is coming and are trying to fight it off with false promises.
Third, worker misclassification is nothing new, and the problems facing gig workers today mirror those facing other workers in Canada for generations. The origins and development of the so-called “gig economy” have been studied in some detail, and this research reveals that gig work – from the perspective of decent working conditions and fair wages – looks a lot like what used to be called piece work, casual labour, part-time work and project-based work – that is, the growth of what is called precarious work or non-standard employment.
There are many policy responses to the growth in precarious work and the social and economic challenges it brings. There is one law reform that we say can make a significant and immediate difference to millions of workers in the gig economy and beyond, and that is to clarify and simplify the legal test for the presence of an employer-employee relationship.
The problem with the existing tests is that they involve complicated, multi-factoral tests which place the burden on workers themselves to challenge and prove their status. Gig employers – like all employers – know that most workers will not have the time or resources or power to be able to undertake this challenge. As a result, the improper misclassification of gig workers and others in our economy as so-called independent contractors is systematic and widespread.
One response to this problem has been to legislate a new, simpler test, known most commonly as the “ABC test”. The “ABC test” 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.
That’s it. A simpler, clearer test for the presence of an employer-employee relationship. It places the onus on the party with the power to define the relationship itself, and contains simple, clear criteria to meet.
The ABC test also typically contains a business-to-business exemption recognizing that bona fide business contracting relationships are not employment relationships. This preserves existing business to business relationships, and again provides clear criteria to meet. We recently proposed these types of amendments to the Employment Insurance Act, Canada Pension Plan and Parts II and II of the Canada Labour Code to the federal government. Similar amendments should be incorporated into provincial employment standards legislation across the country.
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 key barriers employees face in enforcing their rights. The enshrinement of this test in the Employment Insurance Act, Canada Pension Plan, Parts II and III of the Canada Labour Code, and provincial employment standards legislation across Canada will make great strides towards ensuring that gig workers and other misclassified workers are able to enjoy the minimum protections to which they are already entitled at law.