Ottawa invests $26.3 million to target 'Driver Inc.' practice

'A lot of truckers aren't getting the pensions or paid sick leave that they're entitled to'

Ottawa invests $26.3 million to target 'Driver Inc.' practice

The federal government is investing $26.3 million over five years to address the practice of misclassification and protect the rights of road transportation workers.

“A lot of truckers aren’t getting the pensions or paid sick leave that they’re entitled to. So, we’re ramping up labour law enforcement to put a stop to that,” says Seamus O’Regan Jr., minister of labour. “Workers should get the benefits they’ve earned.”

The move is geared towards putting an end to the “Driver Inc.” practice, where drivers are forced to self-incorporate and claim to operate as independent contractors without information on the detriments of doing so.

By misclassifying employees as independent contractors, companies are denying them important rights and entitlements under the Canada Labour Code, such as paid sick leave, health and safety standards, employer contributions to employment insurance and the Canada Pension Plan, and workplace injury compensation, according to the government.

In 2020, Uber asked drivers in Toronto to sign a contract stating they cannot take part in a $400-million lawsuit that seeks to recognize them as employees rather than independent contractors, according to the law firm representing the drivers. The service agreements for Uber drivers specify that the parties are not in an employment relationship and they are governed by the laws of the Netherlands.

With the investment, Ottawa will take stronger action against non-compliant employers through orders and fines to enforce the code starting 2023-24.

Stakeholder feedback

This is a welcome development, according to stakeholders.

“On behalf of the CTA, its members, drivers and their families, we very much appreciated seeing the government of Canada make stamping out Driver Inc. a top priority,” says Stephen Laskowski, president of the Canada Trucking Association.

“Driver Inc. is an unlawful practice that involves gross labour misclassification, abuse of workers, forced labour and significant corporate tax evasion. We welcome the chance to work with the government of Canada to stamp out this practice as quickly as possible.”

“We are pleased to see our government invest resources in the enforcement of laws that will level the playing field and end the driving down of wages and working conditions caused by this scheme called Drivers Inc.,” says Mariam Abou-dib, executive director of Teamsters Canada.

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