More than 2,000 former Foodora Canada couriers will receive compensation for losing their contracts when the food delivery service abruptly exited the Canadian market in mid-May.
The $3.46-million settlement between the Canadian Union of Postal Workers, non-unionized couriers represented by Koskie Minsky LLP, Foodora Inc. and its German parent company Delivery Hero will resolve the CUPW’s ongoing labour claims against Foodora Canada before the Ontario Labour Relations Board.
Delivery Hero will compensate all couriers for the termination of their contracts after Foodora Canada filed a notice that it planned to make a proposal under the Bankruptcy and Insolvency Act.
“We’re happy to see Foodora has acknowledged its workers deserve a settlement,” said Iván Ostos, a former Foodora courier and union organizer, in a press release. “It’s a big change for gig workers. If employers believe it is not worthwhile to do business here, we will fight to make sure workers receive what they’re due.”
Andrew Hatnay, partner at Koskie Minsky, highlighted the importance of the courts appointing representative counsel to vulnerable groups in insolvency proceedings, such as the couriers who weren’t represented by the union. “This settlement will provide significant compensation to riders who lost their primary source of income in the midst of the COVID-19 pandemic and economic downturn as a result of Foodora’s actions.”
Foodora Canada’s shutdown came months after a landmark Ontario Labour Relations Board ruling that its couriers were dependent contractors and had the right to unionize.
The ruling set a precedent for app-based workers seeking to unionize when it agreed with Foodsters United and the CUPW that Foodora’s relationship to its couriers and their working conditions rendered them dependent contractors, a middle-ground classification between independent contractors and full-time employees that permits couriers to unionize and have the same rights and protections as employees while still allowing them some flexibility.
The decision allowed union certification votes, which had been sealed since August 2019, to be counted. In June, it revealed that almost 90 per cent of Foodora couriers had voted in favour.
“This settlement shows what happens when workers have unions fighting for them,” said Jan Simpson, CUPW national president, in a press release on the settlement for couriers. “To lose your job during a global pandemic is stressful, but to lose it as a gig worker, with no guaranteed access to government funds is truly terrifying and we are pleased to have reached this settlement to lessen the financial stress imposed on the foodsters.”