Independent Contractor or Employee? | Author: Jared Lecker
Ordering pizza could not be easier. With a few clicks on a smartphone, millions get delivered somewhere in Ontario each year. Delivering pizza is a perfect entry level job for students, new immigrants or individuals with low skills. Such jobs are glorified as flexible, allowing the worker to be “their own boss”. However, these individuals, often unfamiliar with our employment laws, remain open to abuse by shrewd employers who classify them as independent contractors. The arrangement and compensation rarely favour the workers because they work like employees without receiving any of the benefits.
Recently, the Ministry of Labour put the employment relationship of a Domino’s Pizza delivery man under the microscope to determine whether he was an independent contractor or employee. And the ruling may result in an increase in the price of your next pizza, if you expect home delivery.
The Case of Juan Jose Lira Cervantes
Mr. Cervantes, a father of six, worked at a Domino’s Pizza franchise in Mississauga for four years. He prepped, cleaned and took pizza out of the oven. He also delivered them to customers using his own vehicle. His shifts were irregular, and he earned less than minimum wage plus tips for his labour. When Bill 148 passed at the beginning of this year, minimum wage rose to $14 per hour. But Mr. Cervantes did not see this increase in his wages.
Consequently, he approached the franchise owner who informed him that he was not an employee. Because he was an independent contractor, the law did not require them to pay him minimum wage. So, Mr. Cervantes filed a case with the Ministry of Labour to investigate whether he was an independent contractor or employee. And a month later, the franchise owner took him off the roster, putting him out of work without notice.
Independent Contractor or Employee?
The matter of independent contractor or employee is not new. In 2016, our firm represented plaintiffs, Marilyn and Lawrence Keenan against their employer, Canac Kitchens. In this precedent setting case, the judge identified them as a new class of worker, dependent contractors, who were no different from employees. He awarded our clients the highest ever compensation in Ontario, $125,000, for contract workers falsely misclassified as independent contractors. Our case paved the path for legislative changes introduced in Bill 148, Ontario’s Fair Workplaces Better Jobs Act, 2017.
To us, the Keenan case was clear cut from the onset. Contract workers, economically and otherwise dependent on their employer for a large portion of their income, are just like employees. The “independent contractor” title is irrelevant. Like the Keenans before him, Mr. Cervantes, too, wore a corporate uniform. He worked shifts set by his employer. Even though he used his own vehicle for deliveries, he was not free to subcontract the work to a third party. True independent contractors operate like a business. However, Mr. Cervantes did not appear to set his own hours, purchase inventory, declare profits or risk losses. Nor did he trade his labour with multiple clients.
Contract Workers in the Gig Economy
On November 5, 2018, the Ministry of Labour concluded that Mr. Cervantes was, indeed, an employee and not a contractor. He was therefore, entitled to minimum wage, vacation pay and termination pay when his employment ended. They awarded him $28,144.54. While this was a windfall for Mr. Cervantes, the payout represented only part of his shortfall. Unfortunately for him, the law limits backpay to two years only. For his four years of dedicated service, the pizza franchisee still came out ahead.
This ruling begs thought about thousands of other workers employed in the burgeoning gig economy in Ontario. The food industry, along with hungry customers, have embraced apps, like Uber Eats, Doordash and Foodora. Today, these successful technology companies stand as employers to precariously employed delivery drivers who use their own cars and bikes for food delivery. They are compensated per delivery and perhaps for less than minimum wage. Are these global corporations skirting our employment laws? Like Mr. Cervantes, are they conveniently slapping the independent contractor title on workers and simply using them for their vehicle? Only a legal challenge can prove the facts.
Consulting an Employment Lawyer
If you are employed as a contractor but largely performing your duties like an employee, then you must seek advice, and fast. Mr. Cervantes lost two years of his wage shortfall because he did not understand his rights. All workers can report anonymously to the Ministry of Labour to initiate an investigation. However, a consultation with one of our employment lawyers will help if your case is complicated and you wish to have it expedited faster than the Ministry of Labour can offer.
We have over 35 years of experience exclusively representing employees of Ontario. We understand the law as it applies to contract workers very clearly. Our experience has taken us through all levels of Provincial courts as well as the Supreme Court of Canada. We can likely assist you better than most. Contact us.
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