Heller is the representative plaintiff in a class action lawsuit brought by Ontario Uber drivers alleging they are “employees” and not “independent contractors”, and as such, Uber drivers are entitled to the minimum benefits guaranteed to employees under the Employment Standards Act, 2000, SO 2000, c 41 (“ESA”).
The main issue of whether Uber drivers are independent contractors or employees is not answered in the Heller v Uber,  SCJ No 16 decision. When the class action commenced, Uber moved to stay the class proceeding in favour of arbitration in the Netherlands, pursuant to the arbitration clause in its BV Terms and Conditions. In its June 2020 decision, the SCC addressed some preliminary issues as to whether the action should be stayed; whether the validity of the arbitration agreement should be decided by court or arbitrator; and whether the arbitration agreement was unconscionable.
The Effects Of Heller v Uber On Ontario Employment Practices
Other than expanding on the scope of arbitral referral exceptions, the SCC also expanded on unconscionability as a “corrective to the harshness of the common law” (McCamus, John D. The Law of Contracts, 2nd ed. Toronto: Irwin Law, 2012).
Unconscionability is an equitable doctrine used to set aside unfair agreements resulting from an inequality of bargaining power. The test for unconscionability requires (1) proof of inequality in the positions of the parties, and (2) proof of an improvident bargain. In Professor Harry Arthurs’ paper, “Labour Law as the Law of Economic Subordination and Resistance: A Counterfactual” he observed how “workers, consumers, tenants, and other groups in our society have in common their status as economically subordinate actors subject to the will of a more powerful party.” An inequality of bargaining power exists when one party cannot adequately protect its own interests in the contracting process and a bargain is improvident if it unduly advantages the stronger party or unduly disadvantages the more vulnerable.
The many ways in which employment contracts demonstrate inequality of bargaining power is well-documented, as is the potential to enhance an employer’s advantage at the expense of the employee’s vulnerability. As the majority noted in their decision, almost any agreement will be an improvement over the status quo for a person who is in desperate circumstances. Employers should refrain from using boilerplate illusory arbitration clauses and refrain from incorporating ambiguous terms intentionally drafted as being not quite a penalty clause and not quite an exemption clause. Moreover, any contractual clause that blocks access to statutory relief or access to justice may be found unconscionable and invalid. In particular, subsection 5(1) of the ESA states, “… no employer or agent of an employer and no employee or agent of an employee shall contract out of or waive an employment standard and any such contracting out or waiver is void.”
Canadian Union Of Postal Workers v Foodora Inc, 2020 CanLII 16750 (ON LRB).
In a recent 2020 decision, the Ontario Labour Relations Board determined that Foodora couriers are “dependent contractors”. While tribunal decisions are not binding, the significance of the Foodora case is in the Board’s finding that the food delivery app was the central tool used at work.
The finding was a departure from the general tendencies to characterize the delivery vehicle as the central tool used by gig workers, which has long been the main argument used by food-delivery platforms characterizing delivery workers as independent contractors. It remains to be seen whether the Board’s interpretation of the app as the “lynchpin” of the delivery system will pave the way for a similar finding in the Heller v Uber class proceeding.
If you have any questions regarding the validity and enforceability of contracts, MEHDI AU LLP is a full-service firm that serves clients across the GTA and Ontario.
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