In late August, the Ontario Superior Court of Justice certified my firm’s class-action lawsuit against Uber on behalf of its drivers in Ontario. This is the next major step toward securing employment rights and protections for drivers working with the rideshare giant, as well as similarly placed workers throughout the province and the rest of Canada, who we believe have long been misclassified as contractors.
Through its decision to certify the class action, the Ontario Superior Court of Justice has confirmed that there is some basis to the contention that Uber has been miscategorizing drivers as contractors when they are truly employees.
The suit’s potential impact on the gig economy
Samfiru Tumarkin LLP took up this case in 2017 with the goal of establishing core employment rights for Uber drivers.
That includes getting them access to the same minimum rights and protections as other employees in Ontario and across the country. If the courts ultimately determine that these individuals are employees, their decision will secure entitlements like minimum wage, overtime pay, holiday pay, vacation, termination pay and EI benefits for Uber drivers.
Such a decision would also change the landscape of employment law for all gig economy workers in Canada. Many other workers are in the same situation as these rideshare operators: they have also been misclassified by their employers, so they do not have the rights and protections to which they’re entitled under the law.
READ MORE: Severance pay for contractors: What to know and what to do if you think you’re an employee
At the heart of this class action is the nature of the relationship between Uber and its drivers. While the suit is groundbreaking for the gig economy, worker misclassification is not a new issue.
Our firm is frequently contacted by people who have been misclassified as contractors when they are really employees or dependent contractors (workers who rely on a particular company for a majority of their income).
Many workers believe that they are independent contractors simply because they signed a contract that says as much, or because they file their income tax returns as contractors.
But having an individual sign a contract that says they’re an independent contractor does not determine the worker’s status. That’s why the courts and the Canada Revenue Agency look beyond contract wording or how taxes are filed. Instead, they look at the true nature of the relationship between the parties to determine a worker’s status.
READ MORE: What you need to know before you sign a contract — even if your employer asks you to
How to determine if you are a contractor or an employee
There is no one-size-fits-all test to determine whether someone is an employee, dependent contractor or independent contractor. A worker’s status is determined on a case-by-case basis by considering each worker’s particular circumstances.
The main factor in determining a worker’s status is the degree of control the employer has over the worker. The degree of control can be measured in several different ways, including by asking:
- Does the employer dictate the way in which the worker carries out their work?
- Who determines where the work is carried out?
- Can the worker refuse work without repercussion?
- Is the worker being supervised?
- Who determines the worker’s rate of pay?
- Does the employer have the right to suspend, discipline or terminate the worker?
- Can the worker subcontract their work or hire their own employees?
As demonstrated in the Uber class action, misclassification of workers can expose employers to significant liability. If employees have been misclassified, they can have legal claims for minimum wage, termination and severance pay, vacation pay, statutory holiday pay and overtime pay, among other items.
There can also be significant consequences for an employer who has failed to remit taxes, Canada Pension Plan and Employment Insurance contributions, and insurance premiums for misclassified workers.
My employment law colleagues and I recommend that workers identified as contractors contact Samfiru Tumarkin LLP if significant changes are made to their job or they are fired. While their employer may argue that they are not owed severance, the reality is that in many cases, the law may require a severance package equal to as much as 24 months’ pay.
READ MORE: 5 ways to determine if your severance package is fair
This issue is very important for both employers and workers, and it will only become more significant as the economy continues to fluctuate during and after the COVID-19 pandemic. If you are a worker who thinks you have been misclassified, or an employer dealing with a potential misclassification, contact us for advice and assistance.
Have you been misclassified as an independent contractor? Are you trying to determine if you’re owed severance pay?
Contact the firm or call 1-855-821-5900 to secure assistance from an employment lawyer in Ontario, British Columbia or Alberta. Get the advice you need — and the compensation you deserve.
Samara Belitzky is an employment lawyer and senior associate at Samfiru Tumarkin LLP, one of Canada’s leading law firms specializing in employment law and disability claims. The firm provides free advice on Canada’s only Employment Law Show on TV and radio.