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Food for Thought: OLRB Finds Food Delivery App Couriers to be Dependent Contractors

February 27, 2020

The Canadian Union of Postal Workers (Union) filed an application with the Ontario Labour Relations Board (OLRB) for certification under the Labour Relations Act (Act), seeking to be the exclusive bargaining agent for a group of couriers working in Ontario for Foodora Inc. (Foodora), a web services company providing an online marketplace platform (App) connecting consumers to restaurants. Couriers use the App to access Foodora’s dispatch system, allowing them to receive delivery opportunities.
While the ultimate certification of the Union has not yet been determined—due to outstanding issues respecting eligible voters on the voter list—on February 25, 2020, the OLRB determined that the workers who were subject to the Union’s application are dependent contractors, and thus capable of joining a union under the Act.
The Act includes a definition of a “dependent contractor,” and also stipulates that an “employee” under the Act includes a dependent contractor. The question in this case was whether, for the purpose of the Act, the Foodora couriers—in connection with the services performed for Foodora—more closely resemble the relationship of an employee or that of an independent contractor. The dependent contractor test under the Act is a comparative analysis that focuses on a range of factors in the labour relations context.
The OLRB found that, among other things, in the specific factual circumstances of this case, the following factors led it to conclude that the couriers better resembled dependent contractors than independent contractors:

  • The existence of a tight system of controls involving restrictions on shift swaps and processes for requesting absences, impacting the courier’s ability to substitute and to engage in entrepreneurial activity for other delivery services.

  • The App, which is exclusively owned and controlled by Foodora, was found by the OLRB to be the most important “tool” used by the couriers. If the App was software that could be licensed or sold to the courier—such as accounting software—for the courier’s entrepreneurial activity, the analysis might lead to a different conclusion. The OLRB also, in this case, appeared to place minimal significance on the evidence that the couriers provided some of their own “tools” without any input from Foodora, such as bicycles, helmets and, in some cases, cars.

  • The imposition of a network of incentives and prohibitions that has the effect of steering and controlling the behaviour of the couriers in a way that limits their economic independence and mobility, creating something more akin to a part-time or casual workforce. For example, the OLRB pointed to rules around (i) access to shifts, their length and geographic zones; (ii) shift-swapping and cancelling; (iii) “thinning” processes that require a courier to take shifts at a certain frequency in order to remain registered with the App; and (iv) restrictions on declining orders during a shift that have the effect of forcing a courier to give priority to Foodora.

  • The inability of couriers to vary the fee they charge for delivery.

  • In establishing the high degree of control over the manner of work, the OLRB cited the specific instructions given to couriers by dispatchers, the degree of control imposed by the App’s algorithm, and the two policy handbooks (Logistics Guide and Rider Guide) that, in the OLRB’s view, resembled employee policy manuals.

The OLRB was careful to note at several points in the decision that the dependent contractor test has always been, and continues to be, a highly fact-based determination.
Businesses that interface with workers primarily through a mobile or an online service, or, more broadly speaking, utilize workers in the “gig economy,” should take note of the Foodora decision and review their policies and practices accordingly. By ensuring that workers are given the appropriate degree of independence, businesses may be able to mitigate and/or sufficiently address misclassification risks.
For further information, please contact:
Daryl Cukierman                      416-863-2585
Justin Khorana-Medeiros        416-863-2401
or any other member of our Employment & Labour group.