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Foodora couriers win right to join a union in an ‘historic precedent’ for gig economy workers

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In a forceful decision challenging the underpinnings of the gig economy, couriers for the app-based food delivery company Foodora have won the right to join a union.

The Ontario Labour Relations Board decision issued Tuesday opens the door for couriers, who mobilized around low wages and safety issues on the job, to become the first app-based workforce in Canada to unionize.

Courier Ivan Ostos, who helped lead the union drive, said he was “jubilant.”

“This is going to be used as a precedent for every other case in Ontario and for that matter elsewhere in Canada, so it’s a big deal.”

Foodora couriers participated in a vote to join the Canadian Union of Postal Workers in August. The results of the vote are still sealed and will not be revealed until further legal issues between the company and union are resolved.

But Tuesday’s decision clears one of the biggest hurdles to app-based couriers unionizing: it recognizes their legal right to actually do so.

Foodora had challenged the union vote by arguing that the couriers were independent contractors who cannot unionize and are not protected by provincial labour laws.

In Ontario, independent contractors are defined as self-employed entrepreneurs who are not disciplined or controlled by a boss. Most app-based companies across North America, including Foodora, classify workers this way.

But in a 44-page decision, labour board vice-chair Matthew Wilson ruled that couriers were “a mere cog in the wheel that is powered by Foodora.”

“In a very real sense, the couriers work for Foodora, and not themselves,” Tuesday’s decision said.

The decision accepts CUPW’s position that couriers are dependent contractors — a middle ground between traditional employees and independent contractors that gives workers the right to join a union.

The board pointed to a long list of contributing factors, including the fact that Foodora maintains a “Strike Log” that monitors couriers’ behaviour and job performance. Couriers were sometimes disciplined by Foodora or even “de-activated” from the app for poor performance.

The board also found that couriers have little opportunity to act as true entrepreneurs. Their pay rates are set by Foodora and they are not given the opportunity to negotiate their contract with the company. Their access to shifts is also controlled by Foodora. Couriers also cannot develop their own relationships with restaurants or customers, or sub-contract work to other couriers.

Foodora argued that its couriers were independent entrepreneurs in part because they could freely work for competitors like Uber Eats. The board rejected the argument.

“This is not entrepreneurial activity,” the board ruled. “It is hard work.”

“The fact that couriers had other sources of income is not necessarily indicative of economic independence,” the decision added. “It is not uncommon for individuals to have multiple part-time jobs.”

Foodora, a multinational company headquartered in Berlin, said it inherited the independent contractor model from the Toronto-based food delivery startup it bought and took over in 2015.

The company’s managing director David Albert said Foodora was now reviewing the decision and “assessing how we’ll move forward with the couriers in Toronto and Mississauga.”

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“We respect the board’s process under the Labour Relations Act,” he added. “We’re continuing to focus on Foodora’s growth, and to operate in the best interest of our three key stakeholders: customers, vendor partners and couriers. Until the voter list is confirmed, and the unionization application votes are counted, we cannot speculate at this time as to whether the vote will sway in favour of CUPW and what this might mean for our business moving forward. Right now, it’s business as usual.”

The labour board’s decision said that the use of new app-based technology did not change the level of control Foodora wields over couriers — in fact, the decision found that the app was a key part of that control.

“The software developed and owned by Foodora in the form of an App is the lynchpin in the process to deliver food,” the decision says “It is the single most important part of the delivery process and is a tool owned and controlled by Foodora.”

The board acknowledged that despite some documented instances of couriers being disciplined or terminated, Foodora rarely interacted with its couriers’ daily work. But the decision ruled this was ultimately irrelevant because the company had the power to exercise control if it chose to.

“The focus is not on the frequency of exercising control. Rather, it is about the right and ability of the company to control how the work is performed.”

So far, just one other app-based workforce in North America has successfully unionized. In January, workers at a grocery store in a Chicago suburb for the online delivery platform Instacart voted to join the United Food and Commercial Workers (UFCW) union.

The Foodora proceedings have thrown a spotlight on the app-based economy more broadly in Canada; earlier this year, drivers for Uber Black followed in couriers’ footsteps and filed an application to join the UFCW in Toronto.

“This decision shows that the tide is turning towards justice for thousands of gig workers in Ontario and soon these workers will have the right to their union,” said CUPW president Jan Simpson.

“CUPW is proud to be part of challenging the big app-based employers, and reshaping the future of work in favour of workers’ rights, safety and respect.”

But the labour board’s decision made clear that while app-based technology is novel, the nature of the work is not.

“This is the board’s first decision with respect to workers in what has been described by the parties and the media as ‘the gig economy,’” the decision reads. “However the services performed by Foodora couriers are nothing new.”

Ryan White, the lawyer with Toronto-based firm Cavalluzzo who argued on behalf of Foodora couriers said the board’s decision “vindicates the union, which has known all along that Foodora controls the way that couriers work too much for them to be classified independent contractors.”

“This decision sets a historic precedent for precarious workers,” he said.

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CERB 2.0? Trudeau Hints at New Benefit for Gig Workers

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The CERB may be winding down, but that doesn’t mean out-of-work Canadians can’t still get benefits.

That’s the takeaway from a recent statement by PM Justin Trudeau, who announced that his government had been working on a “21st century EI system.” In covering Trudeau’s statement, the Canadian Press reported that the revamped EI system would replace the CERB, bringing more Canadians under coverage — including one group of Canadians who had been sorely neglected until the CERB came into effect.

An “EI-like benefit” for gig workers

One of the main beneficiaries of Trudeau’s “transitional EI-like benefit” would be gig workers. Under current rules, gig workers are considered self-employed. That means that they’re opted out of EI by default. Gig workers can indicate that they want to pay in to EI, but usually don’t. The self-employed pay twice the usual rate on CPP; passing on EI premiums is a way to partially offset that extra tax. As a result, many self-employed Canadians aren’t covered by EI.

Trudeau’s new EI benefit could remedy that. While details on the plan are scarce so far, it appears that there will be an interim benefit to cover non-EI eligible Canadians, followed by a totally revamped EI system. It’s hard to predict exactly what the latter will consist of, but the former will probably be regular EI with looser eligibility requirements.

Why this is good news

While many out-of-work Canadians may bemoan the loss of the $2,000 a month benefit, it may ultimately be a good thing. The CERB has always been beset by concerns about eligibility and fraud. Many Canadians have reported being “scared” to spend their CERB money, and ominous CRA statements probably haven’t helped with that.

Getting back to EI could therefore be a welcome development. While the average monthly amount isn’t as high as the CERB, EI has fewer eligibility questions hanging over it. As a result, individuals receiving EI may feel more free to spend it.

For example, if you received $1,000 a month in EI, you could spend that money on investments. If you took $1,000 worth of EI and spent it on shares in Fortis, you’d be within your rights to do so. After all, it’s a program you paid in to, and if you’ve been laid off, you’re eligible to benefit from it. It doesn’t matter how you spend the money.

With the CERB, it’s not quite so simple. There’s been a big question mark about eligibility ever since the program began, and spending CERB money on non-essential items has been frowned upon. If you took $1,000 worth of CERB money and bought FTS shares with it, that wouldn’t make you ineligible. However, it could be inconvenient if the shares declined in value, and you were later forced to repay the CERB. With EI, you always know that you’re entitled to the money you’re getting, as applications are pre-screened for eligibility. As a result, you can sleep soundly no matter how you spend the money — be it on groceries, Fortis shares, or anything in between.

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Observers call on National Wages Council for more aggressive wage support, office to look after gig workers, Manpower News & Top Stories

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In September and October 1998, as the full impact of the Asian financial crisis on Singapore’s economy became more apparent, the National Wages Council (NWC) was convened a second time that year to revise its annual wage guidelines.

Its original guidelines, issued in May, had called for wage restraint and non-wage cost-cutting measures, as the Trade and Industry Ministry forecast economic growth for the year of between 2.5 per cent and 4.5 per cent.

But as the crisis deteriorated, the growth forecast for the year was revised downwards in June to between 0.5 per cent and 1.5 per cent.

The NWC in November proposed that in addition to a 10 percentage point cut to employers’ Central Provident Fund (CPF) contributions recommended by the Committee on Singapore’s Competitiveness, total wages for 1998 be cut by 5 per cent to 8 per cent, as compared with 1997.

This year, with Singapore headed for its worst recession since independence due to the Covid-19 pandemic, observers suggested that the council consider calling for more aggressive wage support, an office to look after gig workers and pay hikes for low-wage staff.

Manpower Minister Josephine Teo said in a Facebook post yesterday that the NWC will reconvene this year. The council made its annual wage guidelines in March this year.

Institute for Human Resource Professionals (IHRP) chief executive Mayank Parekh said that without the prospect of a near-term recovery of demand, there could be more job losses and wage cuts on the horizon.

“It is timely for the NWC to review its earlier recommendations and seek support for additional measures to safeguard jobs and enhance employability,” he said.

“More aggressive wage measures, higher support for job redesign and re-training and additional guidelines on retrenchment payments could be considered.”

Singapore Human Resources Institute president Low Peck Kem suggested the council look at whether the Jobs Support Scheme of wage subsidies can be extended, as well as the need for funding to facilitate job redesign for future-ready jobs.

It could also propose the setting up of a tripartite office to help and protect gig workers, who tend to fall under the radar because they do not have employers, she said.

National Trades Union Congress (NTUC) assistant secretary-general Zainal Sapari said the NWC should continue to push for wage increases for low-wage workers, even amid the pandemic.

“Instead of recommending a quantum wage increase, I would like NWC to set a long-term target of where wages of these vulnerable low-wage workers who are performing essential services should be at. This could then act as a guideline for the wage increases and the necessary productivity initiatives that must be embarked upon to make it sustainable,” he added.

This is only the fourth time since being set up in 1972 that the council has been convened twice in the same year.

Aside from 1998, it also released revised recommendations in 2001, after the Sept 11 attacks on the United States, and in 2009 amid the global financial crisis.

In January 2009, the council updated its guidelines to recommend – among other things – that companies work with unions and workers to manage costs, such as through wage freezes or wage cuts, to save jobs.

The NWC had in March this year considered whether to recommend reducing CPF contribution rates to cut wage costs.

But Permanent Secretary for Manpower Aubeck Kam had said then that as the Jobs Support Scheme wage subsidy far exceeds the employer CPF contribution rates of up to 17 per cent, the Government did not feel that a cut to the rate was warranted.

DBS Bank senior economist Irvin Seah said that short of extending the JSS payouts for worst-hit industries, a temporary cut in employer CPF contribution rates could be an option the NWC considers.

But he cautioned that such a move would need to be weighed very carefully. “It would be a reduction in workers’ savings, on top of already widespread wage cuts.”

Amid reports of major retrenchment exercises in recent weeks, Mrs Teo also commented yesterday on the Fair Retrenchment Framework proposed by the NTUC last month. It includes protecting the Singaporean core of the workforce, while foreigners with special or critical skills could be retained as well.

She said in her Facebook post that the Singapore National Employers Federation will consider the framework and discuss a mutually acceptable way forward with NTUC.

In the meantime, the Manpower Ministry will continue its work on the Fair Consideration Framework, she said, adding that there would be updates soon.

“Tripartite partners are aligned on one thing – the need to support our workers and businesses through the storm brought about by Covid-19. Much work ahead,” she said.



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Trudeau says feds will create EI-like benefit for gig, contract workers – Red Deer Advocate

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OTTAWA — Prime Minister Justin Trudeau says the government plans to move out-of-work Canadians into the employment insurance system and provide parallel support for millions set to exhaust emergency pandemic aid who don’t have EI to fall back on.

The $80-billion Canada Emergency Response Benefit is set to wind down over the coming weeks, with those who are EI-eligible to start drawing assistance that way.

Speaking this morning, Trudeau said many people who don’t qualify for the program, such as gig or contract workers, will gain access to a transitional, parallel benefit that is similar to EI.

It will also include access to training, and the ability to work more hours without having as steep a clawback in benefit payments, Trudeau said.

He said more details will be unveiled at a later date.

The most recent figures on the CERB show that as of July 26, the government had paid out $62.75 billion in benefits to 8.46 million unique applicants since its launch.

About half those costs have gone to EI-eligible workers, leaving millions who don’t pay into EI unable to access the program once the emergency benefit ends.

“No one will be left behind,” Trudeau promised.

The economy started to reawaken after severe lockdowns in March and April as Statistics Canada reported the gross domestic product grew by 4.5 per cent in May.

The average economist estimate was for a 3.5 per cent increase in gross domestic product for May, according to financial data firm Refinitiv.

The national data agency said rebounds in May were seen across multiple industries with the easing of COVID-19 restrictions. Retail trade registered a 16.4 per cent bump to mark its largest monthly increase since comparable readings began in 1961.

Motor vehicle and car sales contributed the most to the retail growth. Statistics Canada says the sector would have grown by 11.4 per cent had they been excluded from calculations.

In a preliminary estimate for June, the agency said the economy continued to pick up steam, with a five-per-cent increase for the month.

Despite the two months of growth after two months of negative readings, Statistics Canada’s preliminary estimate is that economic output contracted by 12 per cent in the second quarter compared to the first three months of 2020.

The June and second-quarter figures will be finalized late next month.

CIBC senior economist Royce Mendes said in a note that a 12 per cent drop in the second quarter would be the largest decline ever by a long shot, even if such a decline is expected.

The Bank of Canada’s most recent economic outlook expected the second quarter of 2020 to be worse than the first, estimating a three-month drop in GDP of 14.6 per cent.

Overall, the central bank expected an economic contraction of 7.8 per cent this year, warning that after an immediate turnaround as restrictions eased, a recovery would be long and bumpy with some businesses and jobs not surviving the downturn.

Statistics Canada says economic activity still remained 15 per cent below pre-pandemic level despite the gains over May as business activity was slowly allowed to resume.

This report by The Canadian Press was first published July 31, 2020.

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