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You may be aware of some of the worldwide challenges faced by
Uber as an employer; in fact I wrote in this space last year about
a
specific ruling in the UK that we thought would or could invite
parallels to be drawn here in Canada. Now, thanks to a recent
decision of the Court of Appeal for Ontario in
Heller v. Uber Technologies Inc., we are closer to finding
that out.
The 2017 class action filed in Ontario Superior Court (and
referenced in last year's article) alleges that Uber drivers
are employees – and not independent contractors as all
documentation between Uber and its drivers purports them to be,
meaning that they would be afforded all the usual protections under
the Employment Standards Act, 2000
("ESA"). In 2018 that class action was stayed by
a motion judge who determined that the arbitration clause in
Uber's services agreement (the "Arbitration Clause")
was binding, thus precluding access to the Ontario courts.
However, that stay was overturned on January 2, 2019 by the
Court of Appeal for Ontario, who ruled that in this case the
Arbitration Clause is not binding because it has the effect of
illegally outsourcing an employment standard. As we know, employers
cannot contract out of minimum standards, and – regardless of
what the eventual determination on the merits of this claim might
be – requiring drivers to access an arbitration process in
the Netherlands would amount to the same thing since it removes the
jurisdiction of either or both of the Ministry of Labour and the
Ontario courts.
In differentiating between Uber's services agreements and
normal commercial contracts, where arbitration clauses are
commonplace, the Court of Appeal concluded that the Arbitration
Clause seeks to take advantage of the significant disparity in
bargaining power and financial means between Uber and its drivers,
who would be forced to shell out over $14,000 USD just to file for
arbitration under this process. Writing for the unanimous court,
Justice Nordheimer stated:
I believe that it can be safely concluded that Uber chose this
Arbitration Clause in order to favour itself and thus take
advantage of its drivers, who are clearly vulnerable to the market
strength of Uber. It is a reasonable inference that Uber did so
knowingly and intentionally. Indeed, Uber appears to admit as much,
at least on the point of favouring itself when drafting the
Arbitration Clause.
In terms of where the employment standard is violated, the
Court's reasoning was predicated on the fact that the provision
in the ESA that allows workers to file complaints against
an employer (through the Ministry of Labour) constitutes an
employment standard itself:
"This is of some importance for, among other reasons, if a
complaint is made then the Ministry of Labour bears the burden of
investigating the complaint. That burden does not fall on the
appellant. Under the arbitration clause, of course, the appellant
would bear the entire burden of proving his claim.
In this instance, it did not matter that Heller chose to make a
claim through the courts rather than under the legislation since
the arbitration clause pre-empted even being able to/having to make
that choice as a normal worker would in Ontario.
Although the Court's decision here did not rule on either
the merits of the claim or even whether or not the class would or
could be certified – and it is still open to Uber to pursue
an appeal of this decision – it would appear that we are
driving farther down the road to finding out whether Uber's
contracting model is sustainable under Ontario law.
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