Honourable senators, I rise today to support Senator Lankin’s motion that the Standing Senate Committee on Social Affairs, Science and Technology study and report on the future of workers, with an emphasis on precarious work, the gig economy and temporary foreign workers.
I congratulate Senator Lankin on this timely and relevant motion. Getting this study in the hands of a committee would ensure a planned, well-organized and transparent study on issues that are relevant to all Canadians.
Honourable senators, we know that the nature of work in Canada and around the globe is changing. This is creating opportunities but also challenges. More recently, the rise of online digital platforms is making it much easier for people to engage in this new economy, whether on a full-time, part-time or supplementary basis.
Traditional employee and employer relationships are being challenged, as are the legislative and regulatory frameworks we have in place to protect workers. Today I want to focus in particular on the gig economy.
Some observers, including the Montreal Economic Institute, argue that the advantages of a gig economy for workers and employers far outweigh the downsides, and given this assumption governments and regulators should take a “hands-off” approach.
At the same time, others are advocating for the extension of the reach of existing labour regulation, or variations of it, to the growing numbers of vulnerable workers. Those of us who have witnessed the worst aspects of unequal power in workplaces understand how important these protections are.
A first step though will be achieving a better understanding of the nature of the opportunities and challenges associated with the rapidly changing nature of work, and this is why Senator Lankin’s proposal is so important.
Colleagues, we see the structure of work changing in front of our eyes. Every time we get into an Uber or Lyft vehicle or have a meal delivered at home, we’re receiving a service performed by a gig worker. The same is true for the large numbers of people engaged in a broad range of digitally enabled service delivery, from taking pizza orders to parcel delivery, to digital design, video and music production.
A December 2019 Statistics Canada study found that 1 in every 10 Torontonians is now a gig worker. The number of gig workers participating in the economy increased by 70% in Canada between 2005 and 2016.
Traditional notions of who is considered to be an “employee” for purposes of labour regulations are challenged in the gig economy, and, indeed, so are jurisdictional boundaries. So a clear understanding of the nature of this work is central to understanding whether and how regulation is necessary and practical.
“Precarious work” and “gig work” are often used interchangeably. Both refer to work arrangements that are less structured and non-traditional, often by way of a short-term contract with a firm or individual to complete a specific task or to work for a specific period of time for which the worker is paid a negotiated fee, but there are differences between the two.
Precarious work is always associated with low pay, poor working conditions and few opportunities to gain skills and experience that would lead to better work. It can be temporary or longer term, but it is by its nature precarious. To some extent, in contrast, gig work is almost always a short-term arrangement. In many cases, the income of gig workers is low, however, high-earning contractors can also be considered to be gig workers. And gig work is increasingly facilitated by the use of online digital platforms such as Uber or SkipTheDishes, and can include work from home in areas of digital design. In short, gig work is characterized by the short-term arrangements that are often enabled by or dependent on the internet. Gig work is not always precarious, but it often can be.
Defining gig work is important because it helps us characterize the nature of employment relationships, such as who is an “employee” as opposed to an “independent contractor” within the meaning of labour laws, and it therefore informs consideration of potential regulatory options. However, the law determining who is an employee is becoming increasingly complex.
For some employers in the gig economy, the classification of workers as independent contractors is key to the profitability of their business models. It drives down costs because workers not classified as employees are excluded from basic statutory entitlements, such as access to Employment Standards’ protections, which include notice, severance and overtime provisions. The absence of those protections for workers, of course, is the obvious flip side of this equation.
The definitions associated with the legal status of workers are being tested in several jurisdictions, including in Ontario, California and the European Union. California has seen these issues tested in the courts and has recently enacted legislation to define more closely what constitutes an employee. As of January 1, 2020, California Assembly Bill No. 5, or AB-5, now places the onus on employers as opposed to employees to prove the status of employees using the revised criteria, as opposed to workers being required to do this.
Changes to Part III of the Canada Labour Code, introduced in the 2018 Budget Implementation Act, would prohibit employers from misclassifying employees in order to avoid their obligations with respect to labour standards, and instead place the burden of proof on the employer to demonstrate that the individual is not their employee. Legislative changes such as these are incremental, but they are just a start.
Alongside complexities in defining emerging forms of employment relationships are important questions about jurisdiction. Ubiquitous access to the internet and the explosion of digital platforms has seen the gig economy expand globally, which presents additional challenges for regulators.
An important feature of the internet-based gig economy is its reliance on direct transactions between workers and consumers, facilitated by a digital infrastructure. While this provides important opportunities for gig workers to provide services directly to consumers, questions are arising about the relationship between workers and the digital platforms which provide them access to gigs.
A good example of this sort of issue arose in Heller v. Uber Technologies Inc., referred to briefly by Senator Lankin yesterday. In this case, David Heller of Ontario was a registered Uber driver and launched a class-action lawsuit in 2019, arguing that Uber misclassified him as an independent contractor, while he considered himself an employee of the company.
Before the suit could proceed, Uber contested his ability to launch the lawsuit, because when Uber drivers register with the company they agree to settle disputes through an arbitration process. This sounds fair enough on its face. However, it turns out that this arbitration process is required to be processed and heard in the Netherlands, at a cost of over $14,000 to initiate. Not surprisingly, an Ontario Court of Appeal judge has ruled that this arbitration clause is unconscionable at common law and would make this clause invalid under the Arbitration Act. Uber has since appealed this decision to the Supreme Court, and a decision is forthcoming.
Honourable senators, I raise this case because it touches on issues associated with defining employment relationships in the gig economy, the complexities arising from gig work that is mediated by and dependent on digital platforms and the off-shoring of dispute resolution mechanisms which can essentially put those mechanisms out of reach of workers. Along with other areas of study, these are matters that would benefit from our consideration of the changing nature of our economy and its impact on work. This study would also present an opportunity to explore potential solutions for the significant social impacts the gig economy is having on various communities.
According to a Statistics Canada study this past December, workers at the lower end of annual income distribution are about twice as likely to be involved in gig work in relation to other workers. Low-income workers, comprising nearly half of all gig workers, are particularly vulnerable and are more likely to experience unfair treatment by employers. One possible approach receiving widespread attention is the potential establishment of a basic living wage. This would permit vulnerable workers like new Canadians, young people and women, all who participate most in the gig economy, to have more choices in how and where they work.
Second, I would like to see this study consider options for better, stronger and, perhaps, entirely different employment protections, with an emphasis on finding a sensible balance between the interests of employers and the interests of workers.
Third, as recommended by Senator Lankin, the proposed study should consider opportunities for training and skills development, including more resources and more timely coordination of education and skills development with growth areas of the economy, potentially crossing over to the sort of study that was spoken about earlier. A better matching of skills and training for growing industries would help us positively influence the future of work, improve job choices and support every region’s economy.
The Senate of Canada is obligated to protect our most vulnerable populations, including workers who are at the bottom of the pay scale, subject to poor working conditions and working on short-term contracts. They are dependent on us for help.
I commend Senator Lankin for promoting this important and timely study, and I encourage you all to support this motion. Thank you.
Senator Dean, I really appreciate your comments. I believe — and I would like to have your comment on this — the gig economy and gig employees or workers — I find there are different sections, some that would be under the provincial jurisdiction of labour law and some that would be within federal jurisdiction. If a certain gig employee was working at a call centre across Canada, then I believe the jurisdiction of that job would be federal. Not only is it the scope of the territory, but also the tool that is being used that is under the jurisdiction of the Government of Canada. I would like to have your opinion as to whether that will also be included in the scope of the study.
Thank you. I would like to think that it is going to be included in the scope of the study. We know, because we’ve discussed it many times in this place, that labour law has both a federal perspective under the Canada Labour Code and also under the sweep of provincial labour codes.
One thing that I would certainly want the study to look at is relatively recent legislation in Ontario, introduced by the previous government, that was based on an in-depth study of the future of work by a couple of labour lawyers, one from the employer side and one from the union side. This led to the introduction of some very interesting and novel protections in Ontario labour law that spoke to the sorts of employees that we’re talking about. That included things like reasonable notice of changes to work hours and tackling the issues of things like zero-hours contracts.
The key provisions of that legislation were, unfortunately, repealed by the current government in Ontario. Governments do this, they pass legislation and repeal legislation, and that is absolutely fine. But I do think that there are things we could look at in those legislative changes and the terrific and in-depth study that gave rise to them. You’ve raised an important question, and I think we should look into it jurisdictionally, as broadly and as deeply as we can, and I think we’re going to have to do that if we’re going to find ways to wrap our arms around what is a very complex set of issues.
Senator Dean, I wanted to ask this question of Senator Lankin last night; not that you’re second-best, but I would love to have your perspective on this. An important part of our economy is made up of entrepreneurs who are very much precarious workers. Entrepreneurs are building businesses and creating future wealth and jobs, and I know first-hand that often the last person to get paid is the person who is building the business and who has the most on the line.
I think that how we respond to that in our society is really important, because that is the creation of salaried positions. It is getting people from the temporary microcontract economy back into salaried positions and creating those jobs and opportunities. I would like to see where your thoughts are on including entrepreneurship as part of the precarious workforce in this country that needs to be supported and understood.
I can attest to the fact that I’m second-best to Senator Lankin because I worked for her as a public servant in Ontario. It’s a terrific question. I talked about definitions earlier. Going into this study, which I hope gets traction and is supported, definitions are awfully important because they can constrain the scope of these studies.
Many of these things are one-time opportunities to get to a committee and go deep and broad. Knowing the Senate and our committee structure, I would expect there would be fulsome discussions on the scope of this. A precarious worker in Canada is a precarious worker in Canada, and we have to recognize that.