Delivering a death blow: the province's new rules forbike couriers could destroy small firms
British Columbia Report
v.8(9) October 28, 1996 pg 16-17
Many city dwellers consider bicycle couriers to be terrorists on wheels--punkswho endanger the public by weaving in and out of street and sidewalk trafficwhile racing to make deliveries between office buildings. But accordingto provincial bureaucrats, bike couriers deserve more respect.
For decades bike couriers were deemed to be "independent contractors."However, last month the B.C. Employment Standards Branch informed 28 couriercompanies that, henceforth, they must treat cycling couriers as salariedworkers. Some firms, such as Richmond-based Nova Messenger, had alreadymade that distinction but 22 firms and about 200 couriers were directlyaffected. Concentrated in Vancouver and Victoria, the couriers had longoperated as self-employed contractors. They had modest overheads, but wereable to deduct bicycle- maintenance costs from their income tax as wellas monthly rental fees they paid for uniforms and communications equipment.
During a tense meeting on September 16, the branch directed companiesto cease charging rent, especially the $60-plus monthly levy applied tothe walkie-talkies that link athletic emissaries with central dispatchers.The companies were ordered to ensure all cyclists earn at least the minimumwage. As well, they were directed to refund past rental charges and tostart paying overtime, vacation and statutory holiday pay, and, when applicable,severance pay. The order was made retroactive to 1994 to benefit long-termcyclists. Couriers who have quit within the past six months will also becovered.
Companies grudgingly agreed to conduct voluntary audits of their payrollrecords to determine money owing to existing and former couriers. And agreedto remit those funds to to the branch for distribution to all affectedworkers. Tom Delahooke, owner of Vancouver-based V.I.P. Courier Service,complained to the press that his firm, with a mere five bike couriers,faced an estimated bill of at least $15,000. Far worse would be the approximately$250,000 due if the branch followed through on its threat to reclassifyautomobile couriers as employees.
Most bike courier fleets are adjuncts to much larger corporate operationsthat oversee between 40 and 60 cars and trucks. At the September meeting,one branch official--industrial-relations officer Chris Finding--acknowledgedthat his department had bigger fish to fry. "You can rest assuredwhat starts here [with cyclists] will end up there [with vehicle fleets]."
That admission chilled all listeners, including executives whose firmsweren't affected by the bike-courier edict. The reason? Virtually no companywould be able to afford a retroactive settlement for its automobile drivers.Indeed, Mr, Delahooke subsequently told B.C. Report that he had grosslyunderestimated what extending the branch edict to V.I.P.'s 55-vehicle fleetwould cost. "Try $400,000," said the worried proprietor, whoadded that such a bill would surely force his firm to fold. "There'snot a bank in the country that would loan a company like us that kind ofmoney to comply."
Historically a fractious, highly-competitive lot, courier company ownerssuddenly found common cause. They struck a committee, held under the auspicesof the B.C. Trucking Association. Only a handful of the BCTA's 310 membercompanies operate courier services, but the association fears the branchwill snare owner-operators of big rigs who currently contract themselvesto trucking companies. Apt comparisons can be made between courier- driversand approximately 8,000 independent truckers who contract with associationcompanies, says BCTA president Paul Landry. "The principles are thesame. There's a mutually beneficial relationship. Each of the two partieshas its responsibilities. Each has its expenses. And each shares in therevenue."
The courier committee may opt to surrender on the issue of bicycle couriersrather than appeal to the Employment Standards Tribunal, a separate agencythat can recommend cabinet pass statutory exclusions for specific occupations.So far only truck loggers, taxi companies and intra-provincial truckingfirms (those operating solely within B.C.) have approached the Tribunalto seek exclusions from Employment Standards Act. All have been grantedtemporary exemptions from the legislation. Last week, a hearing began inVictoria for the taxi will be held throughout the province next month forthe two trucking sectors. A key argument will be that extra-provincialtruckers, those serving other parts of the country, will enjoy a huge competitiveadvantage because the Canada Labour Code recognizes them as independentcontractors able to set their own hours.
If you go back three years, the Employment Standards Branch of thattime audited quite a few companies," says Nova Messenger executiveDana Carroll. "Their indication was 'Look, guys, the writing's onthe wall--get your bike couriers employed.’" Nova did just that, adjustingresources and reducing courier commissions to meat minimum wage, holidaypay, pension contributions and other conventional employee requirements.Company vice-president Carroll now sits on the courier committee and istrying to balance the staunch resistance of smaller bike delivery firmswith the more pragmatic view of full-service couriers.
Observes Mr. Carroll: "To some of these [cycling] guys, the backpayments will be significant. But, then again, in the bigger scheme ofthings it's nothing. Some in our group fear we can't budge on this because,if we do, they'll roll over us with everything else. I don't think that'sthe case. Rarely, government isn't in the business of putting people outof business."
Opposition MLAs have their doubts. The evidence to date is that thebranch is home to "ideologues" forever "casting their netsfurther afield" says Liberal labour critic Jeremy Dalton (West Vancouver-Quilchena)."They're unofficially trying to unionize workers who may not evenbe complaining that they want to be treated like a union."
According to Liberal employment critic Colin Hansen (Vancouver-Quilchana),the branch also seems oblivious to the increasing role small business playsin the province. "The legislation is not there to alter the behaviourof employers or to necessarily protect employees. It's there to give governmenta tool to hammer employers when they do something, unbeknownst to themselves,that is deemed contrary to the Employment Standards Act."
The 60-page act is supported by 30 pages of regulations. Beyond thatis 500-page interpretative bulletin that attempts to explain how the legislationpertains to specific job categories. Drafted by University of B.C. commerceprofessor Mark Thompson, with input from researchers on loan from big unionsand major corporations, the act seems out of touch with the concerns ofsmaller firms, says Mr. Hansen. "Most firms in this province are smallbusinesses. They don't have the time or capacity to read one percent ofthe stuff crossing their desks, let alone some massive 'interpretativebulletin' on employment standards."
Flash Courier general manager Harry Bangal says he was blindsided bythe order. His Vancouver company was audited about a year ago by the branchand didn't receive any feedback suggesting that it would be violating thenew act. Certainly it didn't hear "a peep" that its four dozendrivers might conceivably be redesignated as employees. As for his dozenbike couriers: "They're happy with the situation. The ones that aren'tworking any more are obviously unhappy. They're also being made aware thatthere's going to be a free cheque coming their way."
He adds that "it will pretty much be game over" if the labourministry bureaucrats continue to flex their muscles and target the vehiclefleet. But his firm can probably live with the cyclist decree, althoughit will surely result in higher delivery prices for customers and lowercommissions to riders.
Flash charges $5.85 for a package of documents to be deliverad within20 minutes. Rates drop for less-speedy conveyances, to a minimum of $1.95for "same-day" service," says Mr. Bangel. The cyclists covera territory changing from the West End to Main Street, the Vancouver waterfrontto False Creek. Vehicles take care of deliveries beyond those boundaries.A package to Langley can cost up to $40. As independent contractors, couriersretain roughly 60% of the delivery fee.
Industry sources say topnotch cyclists can gross about $25,000 a year,while efficient drivers can aspire to, perhaps, $50,000. Expenses meanthe workers net lesser amounts, but turnover in many firms is low becausecouriers have the flexibility to tailor schedules to accommodate otherjobs or school. Customers love the convenience and, until the branch intervened,business was booming. Flash, for instance, hired eight new riders earlierthis year to augment a longtime quartet of cyclists.
Cyclists, however, will likely be divided over the changes, predictsVictoria courier Peter Rooney. At 28, Mr. Rooney says he's "a geezer"by industry standards. He has pedalled for almost five years--both as adesignated employee (with Dan Foss Couriers) and as an independent contractor(with current employer ACE Courier Services). He says many messengers,like himself, will be "pleasantly bowled over" by a sizeableretroactive pay chaque, In future, though, many may balk at earning lowercommissions and losing the flexibility to take days off by trading dutieswith other riders. Companies may also feel free to overwork salaried employeesduring peak times rather than follow the current practice of hiringingin extra freelancers.
Until the government intervened, speedy riders revelled in their abilityto out-earn laggards. "Hard cash moves our feet," says courierRooney, adding that riders naturally gravitate to companies that treatthem with respect. By comparison, "bad apple" firms suffer fromchronic high turnover.
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