Apr 27

Apr 27 Is Uber Just Trying to Reinvent the Wheel?

Recently, Uber announced its Flexible Work+ plan, which it calls "a modern approach to app-based work in Canada."

This is more than a plan. Uber is proposing self-serving legislative changes so that it can provide some of the benefits that its drivers and workers’ rights groups are demanding, but without providing the traditional (expensive) entitlements that come along with full employee status.

Uber’s Current Driver Regime

Uber refers to its drivers as independent contractors and not employees[i]. Uber’s stance is that its independent contractors are not and do not want to be employees because being an employee lacks flexibility, which the drivers want.

However, the truth is that Uber’s aversion to employees is more about evading employee legislative entitlements and benefits than providing work flexibility since there are already legislative regimes both at the provincial and federal level within the employer/employee relationship that permit flexibility. Further, the current pandemic has provided employers with the opportunity to be even more creative and add greater flexibility within the employer/employee relationship.

Ontario Legislation as a Provincial Example of Employee Flexibility – Elect to Work Employees

Up until 2009, the Ontario Employment Standards Act, 2000 (the “ESA”) and accompanying regulations contained “elect to work” provisions. Elect to work employees were employed on a casual basis and had the ability to refuse work assignments offered by their employers, without suffering negative consequences (Does this sound familiar? Hint: Think Uber contract workers - except elect to work employees have ESA protections).

Elect to work employees were exempt from the termination and severance provisions of the ESA, and had special rules related to public holidays but subsequent amendments to the ESA eliminated those exemptions thereby granting them traditional employment entitlements. The legislative changes did not dismantle the concept of “elect to work” but instead recognized the precarious nature of workers employed through temporary help agencies and through flexible work schedules.

Employers can utilize the existing legal framework to develop employee schedules and flexibility, so long as they ensure the minimum standards in the ESA are met. For example, employers must consider the implications when it comes to:

Temporary lay-offs;
Minimum wage;
Vacation time and vacation pay; and
Rest periods and maximum hours of work.

Flexible Work Arrangements at the Federal Level

The Canada Labour Code (the “Code”) provides rights and protections for employees working in federally regulated workplaces. These rights and protections help employees balance work and home life. The right to request flexible work arrangements under the Code only applies to: a) employees after 6 months of continuous employment, and b) flexible work requests for changes to the employee’s number of work hours; work schedule; employee’s location of work; and type of compensation.

Employers may deny a request for one or more of the following reasons: the requested change would result in additional costs that would be a burden on the employer; the requested change would have a negative impact on:

the quality or quantity of work and the ability to meet customer demand, and/or
the performance of the employee’s workplace;
the employer cannot reorganize work among existing employees or hire more employees to manage the requested change;
there would not be enough work available for the employee if the requested change was granted; or
the requested change does not meet the eligibility criteria mentioned above.

Necessity is the Mother of Invention – COVID 19 Workplace Flexibility

Since March of 2020, employers have had to adapt to the realities of work during a pandemic and are getting creative. Instead of deciding to re-classify employees or seek out ways to get out of obligations around minimum entitlements (like Uber has been trying to do), many employers have pivoted to change the nature of their workplace to help employees fit into this new normal. For example:

ADP Canada recently conducted a study where 45 percent of working Canadians surveyed said they would prefer to work remotely at least three days a week and more than one quarter would prefer to work flex hours.

A Globe & Mail article explores how companies are finding creative ways to empower employees to have more control over their day such as flexible schedules and reimaging the workday.
Similarly, employers are exploring “Choose your own adventure schedules” where companies like Bananatag are actively encouraging employees to choose their own schedules. The company also plans to become even more flexible by entertaining the idea of job sharing and becoming more project-based.

These ideas show that employers are working within the boundaries of employment standards and other employment-related legislation to provide flexible, casual work for employees all the while complying with the provisions of employment legislation (unlike Uber).

PH TIPS

Elect to work employee exemptions are eliminated under the ESA but the concept remains and employers can use the legislation flexibly – So long as they comply with the legislative standards, they can create their own policies and entitlements. Hours of work rules are about maximum hours, not minimum hours and nothing in the ESA says an employee can’t have a flexible schedule.
Misclassification of employees as independent contractors in Canada has serious consequences - The Canada Revenue Agency, as well as other federal and provincial agencies and ministries, can question the status of workers to ensure compliance with legislative frameworks and to ensure that appropriate tax and premiums are being paid. If employers are found to have misclassified employees as independent contractors, they may be required to pay significant penalties, interest and legal fees, in addition to outstanding payroll deductions. Here are some of the costs employers could incur:
- Penalties of 10% to 20% on unpaid Income Tax, EI and CPP premiums, plus interest;
- Workers’ compensation premiums, plus fines and interest;
- Unpaid Canada Pension Plan premiums (workers’ and employers’ share);
- Minimum wage, overtime, parental leave, vacation pay, and more; and
- Potential claims (including class action lawsuits) for wrongful dismissal damages from early contract termination.
Creativity within existing legal frameworks – Given that the above noted dangers of misclassification, employers who want to have flexible work arrangements should consider how other employers are adapting to a more flexible, casual workforce while still properly recognizing the employment relationship and providing employees with legislative benefits like vacation time and pay; public holiday pay; and termination and severance entitlements.

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Patrizia Piccolo with grateful assistance from Brooke Auld and Jennifer Heath.

[i] The Fourfold test or Entrepreneur test – In Canada, the test used to determine whether a worker is an independent contractor or an employee looks at four specific dimensions to determine if there is an employer-employee relationship: