If Uber wins the court case, critics say, it could set a dangerous precedent
A policy in Uber workers’ contracts directing disputes to pricey arbitration in Amsterdam is being tested before the Supreme Court — critics say it denies workers real access to justice but Canada’s business lobby is seemingly intervening in its defence.
In 2017, a group of drivers filed a statement of claim alleging Uber miss-classified its workers, denying them minimum wage rights, union rights and many health protections.
Uber responded with a motion to stay the claim in favour of arbitration, as per an obscure clause in the workers’ contracts.
That clause reads Uber operates under Dutch law. And, it mandates all disputes be settled by arbitration, in Amsterdam, rather than in courts.
University of Ottawa professor David Fewer told PressProgress “even in terms of if these drivers are employees or independent contractors, the Uber contract itself says that you’ve got to go to Holland and spend that money to get it resolved. And, you can’t do so on a class basis.”
John No, staff lawyer at the Parkdale Community Legal Clinic told PressProgress it would mean “even if a worker won a dispute, the other workers and the wider world would never know” as arbitration only hears individual cases and it’s often confidential.
The courts found this requirement unconscionable, for one, because the expected cost of bringing a dispute to Amsterdam is around $14,500. It was noted a likely-majority of Uber workers drivers make around $30,000 per year.
“Even the legal question is beside the point, the requirements and the cost difficulty are such that nobody will actually do it,” Fewer said. “It’s an access-to-justice issue.”
Pablo Godoy, UFCW’s National Co-ordinator for Gig and Platform-Employer Initiatives, told PressProgress “ If your claim is a fraction of that $14,500, you’re not necessarily going to follow up, if you’re missing $500 from your paycheck or if your app has been deactivated. These really are meant to push workers to not have any mechanism to enforce their rights”
Uber did not respond to PressProgress’ request for comment.
But it did appeal that decision to the Supreme Court.
And Canada’s leading business groups have volunteered to intervene.
“I was discouraged to see so many intervenes on the side of Uber,” No said.
Godoy suspects “it’s about upholding the right to alternative dispute mechanisms and arbitration clauses, specifically to preclude businesses from having employees go through the employment standards act and have disputes resolved in Ontario courts.”
“They’re interesting operators here — they’re people who are generally interested in making it more difficult for workers’ to access their labour rights,” he said.
Scott Smith, Senior Director, IP and Innovation Policy, at the Canadian Chamber of Commerce told PressProgress “Our members, businesses from every sector and every part of the country, rely on the certainty that the contracts they enter into will be respected by all parties, including the Canadian legal system. “
And, Smith said, “commercial certainty is, to a great extent, dependent upon the ideal of freedom of contract.”
The CFIB declined PressProgress’ multiple requests for comment, while the MEI did not answer.
Both groups’ factums present a similar argument.
The MEI warns “the sharing economy, a vital and growing sector of Canada’s economy, could be stifled if a lower threshold for unconscionability is adopted.”
Meanwhile, the CFIB writes “Ontario law does not prohibit employees from entering into contracts that contain a foreign law to govern their employment,” while also seeking clarity on parameters.
No, however, said there are real risks for Canadian workers if the courts rule in Uber’s favour.
He said the clause seemingly precludes workers from filing Small Claims, Human Rights Tribunal and Ministry of Labour complaints. “There’s a reason why the Ministry Of Labour, the Human Rights Tribunal and the Small Claims Court processes are easy to access and either free or very affordable. It’s a procedure that is meant to be user-friendly. This forced arbitration will prevent almost anyone from accessing their basic employment entitlements.”
No’s factum reads, in the United States — where similar, mandatory clauses are more common — “The barriers are so high and the prospects of success so low that US workers almost never initiate arbitration proceedings against their employers.”
He said its referred to by legal scholars as “the black hole of mandatory arbitration.”