From The Toronto Star:
by Sara Mojtehedzadeh
For 18 months, Haidar Omarali says he was told when and where to work by multimillion-dollar utilities retailer Just Energy. He was told what to say to customers courtesy of a pre-written script, what to wear in the form of company branded clothing, and was trained, supervised and disciplined by his company.
Sound like an employee to you? So it should, according to a new class-action lawsuit — the first of its kind in Canada.
But in the eyes of multi-national corporation Just Energy, Omarali was not an employee at all; he was an “independent contractor” with no right to minimum wage, overtime pay, or any other workplace protections. As a result, court documents allege, the 58-year-old Toronto father worked at least six days a week from 9 a.m. to 9 p.m. on commission set by the company, which sometimes came out to as little as $3.32 an hour — far below Ontario’s $11.25 minimum wage.
The class-action lawsuit on behalf of 7,000 Just Energy sales agents claims the business with operations across North America and the United Kingdom “unjustly enriched” itself by misclassifying its salespeople as independent contractors. That, the suit alleges, allowed it to make significant savings on things like basic pay, overtime, and EI contributions — since only workers designated as employees are entitled to such workplace rights. The case has yet to be tested in court.
“They keep you at the bottom of the totem pole because that’s where most of their revenue comes from,” said Omarali, who says he had to cash out his kids’ life insurance at one point to make ends meet.
In a statement to the Star, Just Energy said it disagreed with the Ontario superior court’s decision to certify the lawsuit, or give it approval to move forward as a class action, adding that the presiding judge acknowledged the company “may well prevail on the merits.”
“The judge also recognized that previous decisions by numerous regulatory agencies had reassured Just Energy that the sales agents were, indeed, independent contractors, and not employees. Just Energy believes it complied with the law and will continue to vigorously defend itself in this litigation,” the statement said.
In a summary of its position, leading labour law firm Koskie Minsky described its clients, who went door-to-door across Ontario selling gas and electricity contracts, as “low-skilled and vulnerable employees,” often people without post-secondary degrees or new Canadians.
“This is the first class action where we’re actually seeking determination from the court that all 7,000 of these people were improperly classified and as a result denied their basic employment rights like minimum wage,” said Jody Brown, a lawyer for the plaintiffs.
Brown said the key objective of the suit was “changing current behaviour” around misclassification, which strips workers of basic protections.
Under Canadian law, independent contractors are generally supposed to operate autonomously, setting their own schedules and using their own equipment. According to the class-action suit, Just Energy sales agents signed a contract classifying them as such. But, the suit alleges, they were also transported by company employees to target neighbourhoods, subject to mandatory training, supervision, and disciplinary schemes, and instructed to wear company-branded clothing — right down to the hat on their head, which they were told should sport the Just Energy logo.
In response to those allegations, lawyers for Just Energy said in a statement of the company's position sent to the Star that their sales agents’ training was “largely a function of regulatory compliance.” While it says its sales agents had to identify themselves as company representatives to customers and abide by some company restrictions, it also said workers were “not required to follow scripts prescribed by Just Energy or otherwise follow Just Energy’s suggestions or advice.”
The issue of what defines an employee and who should be entitled to basic workplace rights is a live one: Ontario is in the midst of reviewing its employment and labour laws, which critics call outdated and ineffective. Among the recommendations made by labour groups is a government crackdown on misclassification by establishing a “reverse onus” on employee status — meaning all workers would be presumed to be employees unless their bosses can prove otherwise.
“I think increasing enforcement mechanisms to ensure people know if they’re captured as an employee or not, or if they’re really being misclassified is important,” Brown said.
“When people are looking for a job, they’re looking for a paycheque. They’re not necessarily aware of the legal nuances, the differences between an independent contractor and an employee.”
As previously reported by the Star, there has been significant momentum south of the border to tackle employee misclassification. At the Port of Los Angeles, hundreds of truck drivers are challenging their classification as independent contractors through the courts. The U.S. Department of Labour has signed agreements with multiple states to tackle employee misclassification, and recently issued legal guidance to clarify that most workers should be treated as employees under the law.
The lawsuit filed by Omarali and his lawyers against Just Energy says the individual claims of the 7,000 sales agents would have been too small to pursue — but a class action would “provide access to justice to thousands of vulnerable employees.”
Read more from The Toronto Star.