Canadian HR Reporter

N E W S 8 www.hrreporter.com Mandatory arbitration ruled invalid for Uber contractors There's a lesson here for employers when it comes to using arbitration clauses and the risk of inequalities in bargaining power, finds John Dujay, as a court decides a class-action lawsuit should be heard in Ontario — not the Netherlands GLOBAL delivery service giant Uber recently found itself on the wrong end of a decision by the Supreme Court of Canada that will affect its contractors in this country. In the ruling, Heller v. Uber Technologies Inc., the court found that a $400-million class-action lawsuit should be heard in Ontario and not in a Netherlands court of arbitration, which was the solution Uber had imposed upon all its contractors when they first signed up to become part of the service. An alternative decision could have had didn't allow him to access minimum labour standards under the Employment Standards Act when he signed a service agreement in June 2016. But this decision shows that companies "can't take advantage of employees that are clearly weaker in terms of their negotiating power, sophistication or resources," says Samfiru. "An employer's often going to have the upper hand in those areas, and you can't use those advantages to deprive employees of their rights. If you're going to operate in Canada, you have to be prepared to abide by Canadian laws. You can't avoid that. "As the economy becomes more global, more companies coming into Canada must understand that it doesn't take away the ability to take advantage of the good employment laws that we have in this country," he says. Mandatory arbitration clause 'ridiculous' The technology company's method of forcing workers to abide by mandatory arbitration instead of accessing labour laws should show other organizations that this imposition cannot be maintained, according to an Ottawa lawyer. "Employers need to be careful and cautious in determining when they're serious implications, according to Lior Samfiru, a partner at Samfiru Tumarkin in Toronto. "If the court found that that the arbitrary clause in Uber's contract was enforceable, the net effect of that would have been the death of employment law. There would no longer be any employment laws, because that would have allowed any employer to have a similar clause, which would render employees unable to enforce rights," he says. "All the rights in the world don't matter if you don't have a mechanism to enforce them, and if Uber was right here, then every employee could be told: 'Well, to enforce rights, you have to file for an arbitration in name your country,' and that would have been completely unworkable." Employers have 'upper hand' but can't deny employee rights The law firm first launched the suit in 2017 on behalf of Uber drivers. It argued that the drivers should be classified as employees, not independent contractors, and they should be covered by both Canadian and Ontario employment laws. The suit was initiated by David Heller, an Uber Eats food delivery driver in Ontario, who alleged that the company going to use arbitration clauses. I think that the court has drawn a pretty clear line as to when arbitration clauses can and cannot be used in employment agreements. There's some grey area there, but the court has made quite clear that arbitration clauses will not have a blanket applicability in the employment context," says Kyle Lambert, a partner in the advocacy and litigation group at McMillan. "They should bear the decision in mind in determining when to include an arbitration clause in an employment contract, where there is a risk that a court would find that there's too much inequality of bargaining power between the employee and employer or where the court will look at the cost of proceeding to arbitration and find that that cost would be something that would prevent the employee from pursuing dispute resolution for or enforcing something in the contract," he says. The use of the mandatory arbitration clauses is employed by a lot of "app- based" employers, according to Pablo Godoy, national co-ordinator of gig and platform-employer initiatives at United Food and Commercial Workers Union (UFCW) Canada in Calgary, but none UBER CANADA BY THE NUMBERS Source: Moneysense, Stanford University, Indeed.com 90,000 Number of Canadians who drive for Uber $2,600 Guaranteed income from first 400 trips over 90 days 7% Wage gap between male and female drivers $25.88 Hourly average wage of drivers

• Cover