The Canadian top court has slammed Uber’s arbitration process allowing Uber drivers to turn to Canadian courts for resolving their disputes with Uber. According to Uber’s previous policy, Uber drivers and employees had to resolve their complaints through an international mediation process in the Netherlands which costed drivers US$14,500.
In a rule released on Wednesday, a panel of three judges with the Court of Appeal for Ontario concluded that this arbitration clause in Uber’s driver services agreement was “unconscionable” and “invalid”. “It can be safely concluded that Uber chose this arbitration clause in order to favour itself and thus take advantage of its drivers who are clearly vulnerable to the market strength of Uber,” the ruling said.
Uber considers its drivers as contractual workers instead of employees and hence denies basic worker rights to them such as sick leaves and minimum wages. Drivers protested and proposed class-action lawsuit to declare drivers as employees, not independent contractors. They demanded minimum wage, overtime and vacation pay claiming $400 million in damages. Uber argued that this lawsuit can’t proceed in Canada due to the arbitration clause. A lower court agreed, but the panel of three appeal court judges reversed the decision.
The court found this clause improper due to two reasons. First, it is an illegal contracting out of an employment standard under the Employment Standards Act. Second, the clause is immoral considering the inequality of bargaining power between Uber and its drivers.
“This decision confirms that employment laws actually matter in Ontario, and that you cannot deprive workers of their legal rights under the Ontario Employment Standards Act by sending them 6,000 km overseas to enforce those rights at exorbitant personal cost,” told lawyer Lior Samfiru who represents the proposed class-action plaintiffs and a partner at Samfiru Tumarkin LLP to Financial Post.
“I think the message here is for companies … if you’re going to operate in Ontario, if you’re going to operate in Canada, you have to abide by our laws,” Samfiru said. “You have to play by the same rules as everyone else.”
Uber Canada has released a statement saying that it is currently reviewing the court’s decision and is “proud to offer a flexible earning opportunity to tens of thousands of drivers throughout Ontario.”
This news first appeared on Financial Post.
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