To Gig or Not To Gig

Recently some industry voices have been promoting the adoption of the “gig worker” for the transportation sector. ?This approach, while seemingly attractive due to perceived cost savings and flexibility, raises legal, ethical, and economic concerns that cannot be ignored.

?The gig model gains a financial advantage over the traditional model by walking the razor's edge of what is a contractor, claiming that issuance of a T4a in and of itself will be enough to overturn decades of labour laws and precedence. The proposition is that by stepping into the T4a mindset carriers can enjoy substantial cost savings.

However, this perspective neglects critical considerations, such as the legal ramifications of misclassifying workers and the broader societal implications of tax evasion.

?There is ample legal precedence that simply saying you are a contractor, in the eyes of the CRA and the ESDC[1], does not in and of itself make you one. Many other factors must be considered. This misclassification also deprives workers of essential protections and benefits they are entitled to as employees. And the gig model undermines the integrity of the tax system, eroding the tax base upon which essential public services rely. By avoiding payroll taxes and other contributions associated with traditional employment, self-proclaimed contractors are effectively freeloading off public infrastructure, healthcare, education, and social welfare programs. And their employers benefit from this practice at society’s expense. This exploitation of the system not only undermines fairness but also exacerbates inequality by shifting the burden onto honest taxpayers.

?Issuing a T4A instead of a T4 for tax purposes, and stating a given worker is an independent contractor does not make them one. But listen to the full discussion and the truth comes out - the actual justification for this manoeuvre is purely financial. The current penalties being assigned are not a deterrent. The penalties do not offset the savings if you employ enough gig workers. Cheat and be rewarded.?

And that is the problem. Once the employer admits that this decision is driven purely by cost factors, then we have to acknowledge the logical next step; to use this cost model when bidding on work. Because if you don’t, you will lose the work to those who do. And further, if you follow the advice of these proponents, and operate as both a gig employer and a traditional trucking firm, what is the logical extension of this approach? Consider: a company with both gig and non-gig models is presented with a significant opportunity in the form of a large contract to bid on. Their traditional employee model has a 20% higher cost than the misclassified model at the same profit margin. They respond to the bid with a quote from each model. Which one will win the work? Now, apply that logic to all their work. The conclusion - the complete demise of the trucking industry as an employer of tax-contributing employees. The purveyors of the “if you can’t beat ‘em, join ‘em” conveniently don’t mention this.

?Look no further than the taxi industry if you doubt this statement. At one time every city had a significant representation of taxis that were regulated and had to maintain the requisite insurance and protections of the drivers to protect the public. A taxi license was a valuable asset.

?To embrace gig workers threatens the viability of traditional operators who abide by regulations and uphold ethical standards. By undercutting competition through lower costs facilitated by misclassification, companies engaging in this behaviour create an unfair playing field that disadvantages law-abiding businesses. This not only stifles innovation and investment within the industry but also jeopardizes the livelihoods of countless workers who rely on legitimate employment opportunities. Employment rights and benefits that have taken decades to establish, wiped out in one fell swoop. The quality of life for thousands of drivers, reduced due to greed.

?In addition to legal and economic concerns, the gig model poses ethical dilemmas that cannot be overlooked. Treating workers as disposable commodities, devoid of basic rights and protections, undermines human dignity and perpetuates a cycle of exploitation. It also fosters a culture of distrust and division within the workforce, as employees witness their colleagues being marginalized and undervalued.

?In conclusion, the promotion of the gig model in the trucking industry represents a shortsighted and unethical approach that prioritizes short-term gains over long-term sustainability and societal well-being. Instead of succumbing to the allure of cost savings at any cost, carriers must demand that government uphold their ethical responsibilities, enforce labour laws, and ensure the welfare of workers and society as a whole.

?Integrity is what you do when no one is watching. ?In this case – everyone is watching

[1] https://www.canada.ca/en/employment-social-development/programs/laws-regulations/labour/interpretations-policies/employer-employee.html