Soumission

Brief to the Federal Labour Standards Review by the Workers' Organizing Resource Centre

WORC welcomes the opportunity to make a submission to the Commission. Our experience representing courier workers in Winnipeg has convinced us that the provisions of Part III of the Canada Labour Code and the enforcement mechanisms must be altered dramatically if the legislation is to provide adequate protection for many of society's most vulnerable workers.

It is our hope that this Commission will make recommendations that lead to changes which will enable workers, unions and community organizations such as WORC to use the legislation as a tool to advance the interests of all workers.

In our brief we will focus almost exclusively on the manner in which Part III relates to the situation of courier workers in Winnipeg. WORC has direct experience in this area having represented many courier workers in labour standards complaints at both the federal and provincial levels.

What is WORC

The WORC began in 1998 as an initiative of the Canadian Union of Postal Workers and community activists drawn from several communities.

Since March 2003 it has been located on the mezzanine floor at 280 Smith St. The center has two meeting rooms and four separate offices. Several local community groups have their offices and files located at the WORC office and twelve different local organizations hold their regular meetings at the Centre.

The staff at the Centre consists of one paid part-time position and a network of volunteers drawn from the progressive community and the organizations that use the Centre. WORC has a democratic structure. The Central Committee, which governs the operations of the Centre, meets monthly and is comprised of representatives of the groups using the Centre.

The Mandate of WORC is

1. To help establish, maintain and facilitate community organizations that represent and enforce people's rights within our community;
2. To advocate on behalf of unorganized workers for protection of their rights in the workplace and beyond; and
3. To organize the unorganized.

WORC itself, through its part-time coordinator and volunteers, performs public education and advocacy work for workers on a broad range of issues. In our first four and one-half years of operation we provided direct assistance to 2,400 people. Almost half of these cases involved provincial employment standards. The types of employment standards problems ranged from unjust dismissal, harassment, unauthorized pay deductions and other pay problems, rights of independent contractors, failure to pay for holidays and severance pay and many other violations of the law. WORC has also produced a variety of pamphlets and other educational materials on workers rights, employment standards and labour legislation.

In addition to performing general advocacy work on provincial labour standards, welfare and poverty issues, WORC is a center for courier workers to organize and resolve workplace issues. This is largely due to the combined efforts of WORC, the Canadian Union of Postal Workers, and the Delivery Drivers' Association of Manitoba (DDAM). DDAM was founded in 1997 and provides education and advocacy for all delivery drivers in Manitoba including couriers.

It was union activists associated with WORC who pursued Dynamex v. Mamona which is regarded as a precedent setting case in the courier industry. This decision, which has been affirmed by the Supreme Court of Canada, found that couriers are employees for purposes of labour legislation and entitled to vacation and holiday pay. Since that time, WORC, DDAM, and CUPW volunteer advocates have been successful in winning more than a total of $50,000 in compensation for dozens of courier workers from 11 different same-day courier operations, in both the federal and provincial jurisdictions, who have been denied their rights under employment standards.

Together with the Courier Research Project, WORC produced a study of courier industry in Winnipeg entitled Straddling the World of Traditional and Precarious Employment, A Case Study of the Courier Industry in Winnipeg. The Canadian Centre for Policy Alternatives Manitoba has now published this study. Our submission concerning couriers and their relationship to the legislation will rely on this information contained in this study and our direct experience with the implementation of Part III of the code.

The Purpose of Minimum Labour Standards

Effective labour standards are necessary to establish a minimum level of rights and benefits for workers and to reduce opportunities for discrimination by employers. Adequate labour standards can provide dignity for workers and promote human rights at the workplace. Law is necessary because of the imbalance of power between workers and employers. With increased competition in all spheres of our society it is more important than ever to have minimum standards. Too often employers compete on the basis of their ability to exploit workers rather than their ability to use technology and organize work efficiently.

Minimum standards also are necessary to ensure that non-union operations do not have an advantage over unionized companies. With greater competitive pressures, and ineffective labour standards it is extremely difficult for unions to significantly raise wages and benefits. This is particularly true in the courier sector in Winnipeg.

Effective legislated standards also have become more important in the context of increased contracting out by employers and greater use of contract employees. Often employers use contracting out as a means of avoiding collective agreement. The contractors then impose lower wages and benefits and often avoid the provisions of labour law by designating their workers as self-employed contractors.

Our experience has led us to the conclusion that Part III is not working. Workers are excluded. Workers do not know their rights. The law is not being enforced. Law should protect the interests of the most vulnerable in our society. Part III must the amended and enforced with that objective.

We believe that the federal government has a responsibility to provide leadership when it comes to minimum standards. Increased competition has placed greater pressure on provinces to lower standards and relax enforcement as a means of attracting investment. This downward spiral must be stopped and reversed. It is necessary for the federal government to provide minimum standards that can be used as a model for the provinces instead of undermining existing provincial standards.

The Courier Industry in Winnipeg

The courier industry is an established industry that is growing thanks to the adoption of just in time inventory practices and developments in electronic communications that enable individuals to order products through the internet for delivery to their homes. This industry contains both 'good jobs' and 'bad jobs'. The 'good jobs are found in the overnight courier market with companies like United Parcel Service (UPS), Canada Post, and Purolator. This market is largely unionized and production is organized rationally and efficiently. The same-day segment of the industry contains the very 'bad jobs'. This sector is largely non-union and is characterized by inefficiency and brutal employment practices including widespread violations of labour standards.

There are approximately 60 courier companies in Winnipeg; 18 operating in the core overnight market and 42 in the same-day periphery. Approximately 2,800 employees or owner-operators are employed in the industry in Winnipeg. If one includes all of Canada Post's services, the core of the industry employs 2,100 individuals, almost exclusively classified as employees. The periphery employs 700 owner-operators, almost exclusively classified as self-employed. Excluding Canada Post's mail handling services, the industry is divided evenly with 700 employed in the core and 700 employed in the periphery. According to Statistics Canada, the number of couriers in the City of Winnipeg has increased by 37 per cent between 1997 and 2001. Almost all of this growth occurred in the same-day sector.

The fundamental issue leading to precariousness for same-day couriers is the legal form of their employment contract. Couriers in the periphery are exclusively organized under contracts for service. This legal relationship means that rather than being considered employees, couriers are "owner-operators," "independent contractors," or "self-employed entrepreneurs." As a result same-day couriers are not covered by employment standards legislation, they do not have access to Employment Insurance coverage, and their employer is not required to make contributions on their behalf towards the Canada Pension Plan.

Workers in this sector are also very vulnerable to discriminatory practices from their employers. Same-day couriers are not guaranteed a set number of deliveries. Workers that complain about conditions or file labour standards complaints can have their deliveries reduced and effectively be forced out of their jobs. Since there is no established workplace, and most couriers do not know who else works for the company, there is usually no way for the worker to establish if a reduction in deliveries is actually a form of discipline.

Incomes in the periphery same-day market are extremely low, often below minimum wage after expenses and hours worked are taken into account. The average gross income in our study of Winnipeg car driving couriers was $24,211.20. This represents the courier's gross income. It is important to note that a courier's net pay is variable because they incur all costs associated with doing business. Additionally couriers cover the employer's portion of CPP and have deductions taken off for rental of uniforms, insurance and equipment. These expenses cost the average courier in the study $9000.00 per year. Therefore the average net income of a car courier after taxes in the study is $13, 346.67.

The low incomes in the same-day market are largely a result of two factors: The price levels charged to customers that have not kept up with inflation, and low volumes. These factors exist because of an extremely competitive market with an oversupplied non-rationalized labour process.

Enforcement Mechanisms

The same-day courier industry in Winnipeg is also a prime example of the failure of Part III of the Code. Despite the fact that the Supreme Court of Canada affirmed the HRDC decision in Dynamex v. Mamona, which found that couriers are employees for purposes of labour legislation and entitled to vacation and holiday pay most couriers continue to be denied these rights. The reality is that most workers still do not know their rights and many of those that do are afraid to implement them for fear of reprisals. Even where employees have been successful in obtaining back pay for vacation and overtime it is common for employers to continue to violate the law concerning their other employees. Both the federal and provincial governments make virtually no attempt to enforce the legislation.

The current federal compliance policy is based on the premise that most employers comply with federal labour standards or will do so after being informed of the requirements. Concerning the same-day courier industry we believe that the Commission should adopt the premise that most employers are not in compliance with the law.

We believe this commission should see the enforcement of the law as a central feature in its conclusions and recommendations to government.

There are several aspects to consider. The first is the responsibility of the state to promote and educate citizens concerning their rights under the law. This is not occurring and it should. Secondly it is essential that unions and advocacy organizations have access to the complaints mechanism. Relying on vulnerable individuals to enforce their rights is not working. It should also be noted that minimum labour standards are not only protections for individuals, they are social guarantees and collective rights. When they are violated it does not only affect the employees in question but also has an impact on the workers of competitors.

There must also be a much more pro-active approach to enforcement. When a company has been found guilty of violating the rights of a worker there should be a mandatory process of investigations on behalf of all current and past employees with no time limits with respect to back pay. Finally there must be protection for workers who do file complaints. In the courier industry it is virtually impossible for workers to gather evidence that their deliveries have been reduced in response to an action that may have taken concerning enforcement of their rights. Shifting the onus of proof on to the employer is a practical way of addressing this difficulty.

Our experience with courier workers in Winnipeg leads us to make the following recommendations.

1. Employee should be defined in the legislation to include any person who is paid to work or provide services.
2. The complaint-based system based on individuals should be expanded to permit unions and advocacy organizations such as WORC to submit complaints against employers who are in violation of the legislation. We note the recommendation to this effect that is included in the brief of the Canadian Labour Congress.
3. When a company has been found guilty of violating the rights of a worker there should be a mandatory process of investigations on behalf of all current and past employees with no time limits with respect to back pay
4. There should be a reverse onus protection for workers in relation to discipline or dismissal in aftermath of a complaint.
5. There should be a widespread educational campaign to notify workers of their rights under the Canada Labour Code. Employers should be required to notify all workers of the minimum standards contained in Part III and that all employees are entitled to them.

Minimum Standards of Employment

We support the many submissions that have already been made concerning the need to improve the minimum standards of employment included in Part III of the Code. As an advocacy organization for the poor and low paid workers we are painfully aware of the inadequacy of many of the current provisions in the law. It should also be noted that minimum standards do not only affect the workers who benefit from them. They also affect the families of those workers and raise the overall standards within our community.

The current provisions for the minimum wage are a case in point. The performance of the provinces in setting poverty level minimum wages has been nothing short of disgraceful. This is an area where the federal government can no longer abdicate its responsibilities. We are not experts in this area and will leave it to the Commission to judge the merits of the various proposals that have been made form labour unions and organizations such as the National Anti-Poverty Organization. We simply wish to say that it is absolutely necessary for a significant increase to the minimum wage so that it can be truly a "living wage" and not a passport to poverty.

We also support the other submissions that have called for the establishment of paid sick leave, an additional general holiday, improved severance pay, and increased minimum paid vacation.

Submitted by the

Workers' Organizing and Resource Centre

Mail: PO Box 1, Winnipeg, MB, R3C 2G1
Location: Mezzanine-280 Smith Street, Winnipeg
Phone: (204) 947-2220
Fax: (204) 927-2212
E-mail: worc@mts.net