As independent workers become a key source of labour, will business and government offer them a safety net?
”At one point, freelance and contract workers were a small corner of the labour market,” says Andrew Cash, co-founder of the Urban Worker Project. “It was easy for policy-makers, media and the labour movement to ignore the group as an outlier. That’s no longer possible.”
In 2017, more than 15 percent of the national workforce was freelance, an independent contractor or a consultant, according to Statistics Canada. That’s a surge of some 50 percent, or almost three million people, since 2005. The numbers keep growing, and projections vary. By 2020, accounting software and consulting firm Intuit estimates, 40 percent of the country’s workers will be freelancers. And in a 2017 survey of 1,500 business executives, 86 percent of respondents told staffing company Randstad Canada that they plan to increase “agile workers.”
Shedding staff for non-permanent workers, often called the gig economy, allows companies to hire for immediate needs, without the longterm, legal or financial obligations of an employee. But it leaves a growing number of people lacking employment insurance, health benefits and other safety nets.
“In a lot of cases, companies are treating independent workers as employees but without the benefits,” says Cash, whose Toronto-based group advocates for the self-employed. “Employers are downloading their responsibilities onto workers.”
Cash is part of a growing chorus demanding innovative solutions to protect the swelling ranks of precarious workers. “Our system of rules and laws to protect workers was designed when most people were employees,” says Kenneth Thornicroft, a lawyer and professor of law and employment relations at UVic’s Peter B. Gustavson School of Business. “It doesn’t do a good job of protecting the self-employed. The gap it leaves creates stress for individuals, and as a society, it is not good.”
There is employment insurance for the self-employed, but it only pays for maternity leave, offering no coverage for sick days, Thornicroft observes. Without the economies of scale of a group plan, private health care is an expense that many independent workers can’t afford. And there aren’t many products designed for them, anyway. If they contribute to the Canada Pension Plan, they pay both the employee and employer portions. Filing a grievance with a labour relations board is often impossible, says Thornicroft. It’s expensive, and the system and rules are for employee-employer relationships. When there are disagreements, it leaves independent workers with little recourse.
That’s where organizations like the Canadian Freelance Union (CFU) step in. “They’re one person against a client who’s usually a big company,” says Ethan Clarke, president of the CFU, a community chapter of Unifor, a major trade union. “We counter the imbalance.” The CFU advocates for freelance and contract workers in 15 media-related industries, giving them a political voice, providing health plans at better rates and fighting grievances. Clarke says it’s never lost a claim for unpaid fees.
Groups such as the CFU are a start, says Thornicroft. But he thinks there needs to be a broader public policy change. “We can’t tell a business how to run,” he says. “But we can manipulate companies to provide benefits.”
Thornicroft would like to see tax incentives for businesses to hire staff rather than contractors, tweaks to labour laws to make it easier for independent workers to file complaints and more funding for the provincial Employment Standards Branch to audit employment practices.
Cash would add a public safety net that covers things like mental and physical health care for independents. “We can’t deliver it the way we do for conventional workers,” he notes. “We’re going to have to be far more innovative.”
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Vancouver-based Mustel Group, led by owner Evi Mustel, conducts market research for clients that include Telus Corp., the City of Vancouver and London Drugs, and is a regular contributor to BCBusiness. In March, Mustel interviewed 501 Metro Vancouver residents on topics related to the future of work, narrowing this group down to the 274 employed respondents for certain questions. Some results do not total 100 percent due to rounding.