The Canadian economy has been changed by app-based platforms and other digital businesses that offer short-term, flexible work arrangements. These jobs are often referred to as gig economy work.
Gig economy work can include ride-sharing, delivery services, courier services, house cleaning, repairs, online freelance work, consulting, and other short-term project-based work. While some workers choose this type of work for flexibility, others rely on it because traditional employment opportunities are limited.
One of the key legal issues in the gig economy is whether workers have been properly classified. Many businesses classify gig workers as independent contractors, but the label used in a contract does not always determine a worker’s legal rights.
What Is the Gig Economy?
The gig economy generally refers to non-standard work arrangements involving short-term, temporary, freelance, app-based, or project-based work. Gig workers may provide services through digital platforms, apps, agencies, or direct contracts with businesses.
From an employment law perspective, the most important issue is not simply whether a worker is part of the gig economy. The more important question is whether the worker is truly an independent contractor, or whether the facts of the relationship suggest that they are actually an employee or dependent contractor.
Are Gig Workers Employees or Independent Contractors?
Many gig economy businesses classify their workers as independent contractors rather than employees. However, courts and tribunals look beyond the wording of a contract and examine the true nature of the working relationship.
Relevant factors may include the degree of control exercised over the worker, who provides the tools and equipment, whether the worker has a meaningful chance of profit or risk of loss, whether the worker can hire others, and how integrated the worker is within the business.
In some cases, a worker who has been classified as an independent contractor may actually be an employee or dependent contractor. This can affect whether the worker is entitled to minimum employment standards, termination pay, severance pay, vacation pay, public holiday pay, or other legal protections.
App-Based Workers
App-based workers are workers who use online platforms or apps that connect service providers with customers. These platforms may establish service standards, control access to work opportunities, set payment terms, monitor performance, and decide whether a worker can continue using the platform.
Examples of app-based gig economy work include ride-sharing, delivery, courier services, cleaning services, freelance marketplaces, and other platform-based services.
The best-known gig economy platforms include companies in the ride-sharing and delivery sectors, such as Uber, Lyft, Uber Eats, DoorDash, SkipTheDishes, and similar services. These types of platforms have raised important questions about worker classification, minimum wage, termination rights, and access to workplace protections.
Project Workers
Project work can also be part of the gig economy. These arrangements may include freelance work, short-term contracts, temporary consulting assignments, placement agency work, IT contracts, document review work, and other project-based services.
Some project workers may operate independent businesses. Others may be economically dependent on one company or may work under conditions that resemble employment.
A recent case before the Ontario Labour Relations Board is a good example of this issue. In Procom Consultants Group Ltd. v. KS, the complainant was a skilled information technology worker. She owned a limited company that entered into a contract with Procom, which stated that she was an independent contractor. Procom then hired her out to KPMG on a short-term assignment.
In reviewing the facts, the board found that the employer owned the tools, controlled when, how and where the work was done, and that the worker had no risk of profit or loss. The contract was therefore ignored, and the worker was ruled to be an employee entitled to protections under the Ontario Employment Standards Act, 2000.
What Rights Do Gig Workers Have in Ontario?
Common questions include:
- Are gig workers employees or independent contractors?
- Do gig workers receive minimum wage protections?
- Can gig workers receive severance pay?
- What rights do Uber, Lyft, Uber Eats and DoorDash workers have in Ontario?
Depending on the circumstances, gig workers may have rights relating to minimum wage, vacation pay, public holiday pay, termination pay, severance pay, human rights protections, and other workplace protections.
In Ontario, some digital platform workers may also have minimum protections under the Digital Platform Workers Rights Act, 2022. These protections are separate from the question of whether a worker is an employee or independent contractor.
Workers who believe they have been misclassified as independent contractors should consider obtaining legal advice about their rights and entitlements.
Worker classification issues have also been considered in significant court proceedings involving gig economy companies. For example, the Supreme Court of Canada’s decision in Heller v. Uber addressed important issues relating to worker rights and access to justice in the gig economy.
Gig Worker Misclassification
Gig economy workers in short-term, app-based, freelance, or project-based assignments may be misclassified as independent contractors when the actual working relationship is closer to employment.
Whether a gig worker is an employee, dependent contractor, or independent contractor depends on the specific facts of the working relationship. Courts and tribunals may consider control, ownership of tools, chance of profit, risk of loss, integration into the business, and economic dependence.
Class actions claiming worker misclassification have been launched in Canada, including Sondhi v. Deloitte Management Services LP, 2018 ONSC 271. These cases show that worker classification remains an important issue in employment law.
Key Takeaways for Gig Economy Workers
Gig workers are not automatically independent contractors simply because a contract or platform says they are. The legal classification of a worker depends on the reality of the working relationship.
If a gig worker has been misclassified, they may be entitled to rights and compensation they did not previously receive. This may include minimum employment standards, termination entitlements, or other legal protections.
A version of this article was originally published by The Lawyer’s Daily on November 12, 2019 and it was updated June 5, 2026.
If you are a gig worker, app-based worker, freelancer, contractor, or project worker and have questions about your employment status or workplace rights, contact Monkhouse Law Employment Lawyers for a free 30-minute phone consultation.