The emergence of the gig economy has changed the labor market, offering workers increased flexibility, but at the same time questioning conventional notions of employment. Thereby residing in a legal "grey zone" of employment rights in Ontario, gig workers (i.e., those engaged in rideshare, food delivery, and freelance work) are subject to a variety of state, federal, and bus system employment-related limitations.
Therefore, an unambiguous definition of their status under employment statutes, their rights, and the status of Ontario in relation to California and the United Kingdom is of paramount concern to fair labor standards.
An Article from our Guest Post Contributor.
Legal Classification of Gig Workers in Ontario
Employees vs independent contractors vs Defendant Contractors
Employees receive protections under the Employment Standards Act (ESA), such as minimum wage, vacation pay, and entitlement to severance.
By contrast, independent contractors are self-employed entrepreneurs are NOT protected under the ESA.
Gig workers often fall into the category of dependent contractors, a classification that is neither fully independent nor traditionally employed. Dependent contractors perform services for only one or a single principal employer and may be covered for some employment protections if they can show economic reliance on the organization that is hiring them.
Misclassification cases are often complicated, especially when they involve a situation where both the husband and wife work for the same company. Their employment status can complicate asset division. You might want to contact a family lawyer if you are concerned about protecting personal property in a divorce.
Rights of Gig Workers Under Ontario’s Employment Law
While, for the majority of gig workers in Ontario, employment benefits are not equal, recent legal changes have been put forward to provide some of those benefits.
Vast majority of gig workers ARE misclassified as independent contractors, and DOES NOT receive basic employment law protections under the ESA. The led to the infamous Uber case that went all the way to Supreme Court of Canada. Following the decision in Supreme Court, Mr. Heller proceeded to have his class action certified in Heller v. Uber Technologies Inc., 2021 ONSC 5434.
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To decrease the uncertainty faced by Gig workers and to provide them with some basic employment law protections, Digital Platform Workers' Rights Act, 2022 passed into law on April 11, 2022. The Act will come into force on July 1, 2025. Digital Platform workers will undoubtedly be granted more safeguards than they already have.
Please keep in mind that the Act protects all Gig workers, regardless of whether they are independent contractors or employees. The Digital Platform Workers’ Rights Act is separate from the Employment Standards Act and introduces some sort of employee-like protections for gig workers (e.g. Uber and DoorDash workers), for rights such as Right to information, Right to recurring pay period and pay day, Right to minimum wage, Right to amounts earned and tips and other gratuities, Right to notice of removal, Rights re dispute resolution, Rights re reprisal.
Other protections for gig workers include:
Right to disconnect: The Ontario legislation also calls for companies of 25 or more employees to have policies for disengaging from work and could, therefore, be impacting some gig workers who are working for and administrated by platform-based larger employers. (Working for Workers Act, 2021)
Protection against wrongful termination: Gig workers who can can demonstrate employer status as a dependent contractor are entitled to the protection under the ESA as well as common law. (Reasonable Notice under Common Law, Termination Pay and Severance Pay under the ESA)
Health and safety protections: Gig workers are also subject to the protection under the Occupational Health and Safety Act (OHSA), in particular with regards to workplace hazards, as OHSA defines workplace broadly. (OHSA)
Articles that May be of Interest to You:
Case Update on Heller v. Uber Technologies - Are Uber Drivers Employees or Independent Contractors?
Non-Compete Agreement No Longer Legal Under Bill 27: Working for Workers Act, 2021
A Case Law Analysis of How Much Notice Is Reasonable Following Termination Without Cause?
Hiring gig workers? Do you know your responsibilities as an employer?
Comparing Ontario with California and the UK
Classifications and protections of gig employees are considerably different at the jurisdiction level, with Ontario taking a centrist position in contrast to being more advanced legislation in California and Britain.
California: Assembly Bill 5 (AB5) and Proposition 22
The domain of gig work classification in California has been arguably one of the most contentious and revolutionary. In 2019, Assembly Bill 5 (AB5) provided for the ABC Test for identification of which individual is an employee or independent contractor. Whilst working in this test, staff are considered to be employees unless the employing organization can prove:
The worker is free from the influence of the enterprise management and has the freedom to decide.
Work performed is not a standard part of the activities of the company.
The worker is customarily engaged in an independent trade.
This strict classification would have granted gig workers full employee benefits, but major gig economy companies like Uber and Lyft opposed the bill, leading to Proposition 22 in 2020. Prop 22 introduced a third classification providing a very limited package to gig workers (e.g., minimum earnings guarantee, health stipend, and accident insurance) without reclassifying gig workers as employees.
The UK: Worker Status and Supreme Court Ruling
The UK has a three-tier employment status model that recognizes agents as employees, workers, or self-employed. Gig workers are typically in the "worker" class, for whom more rights are granted than to the independent contractor, but which is not in the same level as the full employee. Workers in the UK are entitled to:
Minimum wage
Holiday pay
Rest breaks
Protection from discrimination
The 2021 Supreme Court decision Uber BV v Aslam in the UK ruled that Uber drivers are "workers"' and are entitled to Worker protections for minimum wage, paid leave, etc. This decision set a precedent, pushing other gig economy platforms to reassess their labor practices.
Click here to learn more about the Uber BV v Aslam decision.
How Ontario Compares to UK and California
Ontario's approach is less stringent than California's AB5 and less definitive than the UK Supreme Court ruling. But it is getting there with the Digital Platform Workers' Rights Act, 2022, coming into force on July 1, 2025. The dependent contractor doctrine under common law also provides a solid test to identify employees who should be subjected to ESA protections and to provide redress to employees misclassified as contractors.
In addition, depending on the development of the Uber Case, there might be a Supreme Court of Canada decision very similar to the situation in the UK ruling gig workers as dependent worker.
The Future of Gig Work in Ontario
As the gig economy continues to expand in scale, Ontario lawmakers may find themselves asked to further strengthen labor laws. Potential reforms could include:
A new worker classification model to ensure equitable salary and conditions. That is the intention of the Digital Platform Workers’ Rights Act, of which it's still too early to tell its effectiveness.
Portable benefits (which give employers and their own employees a health and pension contribution irrespective of their employment status in the scheme).
Stronger wage and employment protection laws to prevent exploitative work practices.
With the trend of an ever increasing push to provide increasing levels of protection for gig workers, the model of California and the UK may serve as blueprints for future labor legislation in Ontario. The challenge is being able to strike the right balance between contractual freedom and the protections of gig workers against exploitation.
Conclusion
To ensure that gig workers receive equitable treatment in the rapidly expanding digital economy, Ontario will need to review its employment laws. Gig workers in Canada operate in a legal limbo where their rights are highly ambiguous. The amount of protection is still less than that of those who reside in California and the United Kingdom, even though recent laws may offer improvements.
But legal issues revolving around remote working, freelancing and Gig works could be complicated. You may want to consult with an experienced employment law firm such as HTW Law, to learn of your employment law rights and the do and don't before deciding to work remotely.
With the right legal support, employees can navigate the challenges of remote working, and employers avoid legal pitfalls.
You don't have to fight the battle alone. Speaking with an employment lawyer who is familiar with the laws and regulations regarding remote work, employment contracts and employment law in general will go a long way. If you are in doubt, it's essential that you reach out for help as soon as possible right away.
Click here to contact HTW Law - Employment Lawyer for assistance and legal consultation.
Author bio:
My name is Jack Oliver. I am a freelance content writer passionate about crafting engaging, SEO-friendly, and high-quality content across various niches.