Innovation and Labour Protections Square Off in Food Delivery

The appropriate balance between technology and innovation on one side and labour law and protections against exploitation on the other, are about to come under scrutiny once again.

In May 2019, the 550 couriers for the app-based food delivery company Foodora in Ontario launched a union drive. The workers make a base rate of $4.50 an order, with an additional $1 for each kilometer from the restaurant to the customer.

Whereas companies such as this have revitalized some struggling restaurants, who would be unable to otherwise deliver food and expand their customer base, and have provided some low-skill employment to those who have otherwise been unemployed, there are concerns that the characterization of couriers as contractors also gives rise to exploitation.

Foodora is actually one of the better companies in this respect, in that they provide workers’ compensation to their 3,000 couriers in Canada. Most other app-based food delivery companies do not. For cyclists in major cities like Toronto, this coverage is important.

Yet this type of work is still often characterized as precarious. The same flexibility that it touted by the company also means that many couriers experience unstable working hours. Their autonomy is the major basis for claiming that the couriers are independent contractors, and therefore ineligible for unionization.

In submissions to the labour board obtained by The Star this week, the union claims that Foodora monitors couriers and their performance, including delivery time, which speaks to a significant amount of control exerted upon the couriers that could defeat any arguments of independence. The economic dependence of couriers on the company may also strengthen that case.

In order to monitor the couriers, Foodora utilizes GPS devices. The federal Privacy Commissioner has reviewed the use of GPS devices for workers under PIPEDA twice.

In the first case, PIPEDA Case Summary #2006-351, the Commissioner found that the use of GPS to improve the dispatch process is an acceptable purpose, and implied consent for such use is reasonable. However, the use of GPS as an employee management tool would likely require explicit consent. Of greater concern was the possibility of function creep, where a technology is implemented for one purpose, and then utilized in the future for more expanded purposes.

In the second case, PIPEDA Case Summary #2009-011,the Commissioner concluded that the GPS system installed did not collect any different data than the manual system that it replaced. This decision emphasized again that an appropriate purpose for GPS is to provide an efficient service to clients, and not to manage employee performance.

How these GPS devices are being used by Foodora is still not fully determined. But this issue has arisen in the past, specifically in the contact of determining the status of independent contractors.

Last year, the Alberta Privacy Commissioner found in Order P2019-04 that there are some circumstances where an independent contractor is required to install a GPS tracking device where it would not violate the province’s privacy statute. The employer instituted a policy that the default setting for such devices would be on, but the device could be turned off when not performing services for the employer. The express purpose of the devices was to “promote good driving behavior” and to locate the contractor in relation to safety issues.

The Commissioner concluded that the information collected here was “personal employee information” under s. 1(1)(j) of of the Act, as opposed to “personal information,” which would be collected from consumers, for example. This means that only implied consent was required.

However, the term “employee” under the Personal Information Protection Act is expansive enough to include employment relationships such as contractors, and even volunteers. In Order P2018-06, the Alberta Privacy Commissioner explained this further as follows,

[para 61] Section 1(1)(e) of PIPA establishes that the Legislature does not use the term “employee” to refer to an employee at common law. Rather, the term “employee” includes a partner or director, office-holder, apprentice, volunteer, participant, student, contractor or agent of an organization, all of which are entities that would not normally be considered “employees” at common law.

[para 65] PIPA does not define the terms “employer” or “employment”, as it does “employee”. As a result, an argument could be made that these terms maintain their common law definitions. However, to deem someone such as a director, student, or volunteer, an “employee,” must necessarily result in deeming the relationship between the director, student, or volunteer to be an employment relationship and the organization
to be an employer. There would be no purpose in deeming an entity that is not an employee to be an employee if the relationship between the entity and the organization is not also deemed to be an employment relationship. This is because it is the nature of the relationship between an entity and an organization that determines whether the entity is an employee or not…

Instead what is used is the totality of the relationship, as confirmed by the Supreme Court of Canada in 671122 Ontario Ltd. v. Sagaz Industries Canada Inc. at para 46.

To that effect, although the GPS devices used by Foodora demonstrate some additional control over couriers, how these devices are used will likely have a greater bearing.

The labour board is unlikely to consider the implications on technology and innovation from any unionization, as their role is more relegated to a statutory interpretation of whether these workers are deemed employees. Yet, how our labour and employment laws, which were drafted in a different era for different purposes, are interpreted and applied in changing contexts will very much determine who innovative companies will operate in Canada.

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