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Pizza Hut faces $150 million class action over alleged misclassification of delivery drivers

The Toronto Star is reporting on the new proposed class action against Pizza Hut for misclassifying delivery drivers as independent contractors and failing to provide them with basic employment rights.

The Star reports:

While the multinational pizza company has recognized drivers “in the United States and other jurisdictions” as employees, it engaged in “systemic” misclassification by failing to do so in Canada — violating employment laws in multiple provinces, the statement of claims says.

Lead plaintiff Liubomir Marinov began working at a Toronto-area Pizza Hut in 2005 and was classified as an independent contractor, a category of worker that has no protection under provincial employment laws. Since then, he’s experienced “the challenges of misclassification and sub-minimum wage work first-hand,” he said.

Marinov was, for a period, paid $4.50 per delivery plus tips, according to the statement of claim. In the spring of 2020, he began making an hourly rate of $8, which recently increased to $10.

In addition to being denied Ontario’s minimum wage, now $15 an hour, Marinov had to cover all the expenses of doing his work himself, according to the lawsuit. That included gas and car costs, as well as a data plan to use Pizza Hut’s in-house delivery app called Dragon Drive.

The lawsuit argues that franchisor Pizza Hut is effectively a single employer that sets overarching practices and standards across all its storefronts — including the contractor designation for drivers. In addition to excluding drivers from provincial employment laws, the classification also means companies do not need to make employment insurance or pension contributions.

The Star spoke to Josh Mandryk about the proposed class action:

“Food delivery is difficult work for low pay. Drivers like Mr. Marinov have been on the front lines of the COVID-19 pandemic, delivering Canadians’ food and making it possible for many of us to stay safely at home,” said Josh Mandryk at Goldblatt Partners, one of the Toronto-based labour law firms spearheading the lawsuit.

The Star also spoke to co-counsel Andrew Monkhouse:

“Employee misclassification in the pizza delivery industry is pervasive. This class action is about challenging that practice and improving work for Pizza Hut delivery drivers,” said Andrew Monkhouse of Monkhouse Law, the firm jointly representing Marinov.

According to the class action, “all aspects” of Marinov’s work were “dictated in detail” by Pizza Hut’s app. Delivery drivers cannot pick which orders to fulfil, or decline orders assigned to them; they are also placed on a timer when making deliveries, according to the lawsuit.

“If a driver does not comply with the directions of the app, they risk discipline,” the statement of claim says.

Moreover, Marinov’s contract allegedly set out instructions for how to behave on the job: drivers cannot ask for tips, must report for their shift at a set time, and are prohibited from working for other companies during those hours.

These features set Pizza Hut apart from other app-based delivery companies, noted Monkhouse.

“Like other delivery apps, the app mandated by Pizza Hut provides significant control over when and how the delivery drivers perform their work,” he said. “Unlike many of those working on apps in the gig economy, though, Pizza Hut delivery drivers are scheduled for shifts, and deliver food exclusively for Pizza Hut during their scheduled hours.”

Read the entire article here