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Foodora Canada delivery service couriers have recently reached a $3.46 million settlement regarding Foodora’s pull from the Canadian market amid the COVID-19 pandemic. If you are a Foodora Canada courier who has been affected by the sudden exit, you may be eligible for compensation in the Foodora Canada settlement.
Under the Foodora Canada settlement, which is still awaiting court approval, Berlin-based Delivery Hero SE and the Canadian Union of Postal Workers will end recent disputes between couriers and their employers. The disputes arose when couriers reportedly won the right to unionize in February, and Foodora subsequently filed for bankruptcy in April and exited the Canadian market in May.
Foodora Exits Canada Amid COVID-19 Pandemic
Foodora Canada submitted a proposal under the Bankruptcy and Insolvency Act, filing a notice of intention on April 27, 2020. The company finally ceased its operations two weeks later on May 11, about five years after entering the Canadian market.
Foodora reportedly blamed “strong local players” and a “highly saturated market” for online food delivery for its exit from Canada.
“We’re faced with strong competition in the Canadian market, and operate a business that requires a high volume of transactions to turn a profit,” David Albert, Foodora Canada’s managing director, announced in the press release. “We’ve been unable to get to a position which would allow us to continue to operate without having to continually absorb losses.”
Foodora entered the Canadian market in July 2015 with the acquisition of Hurrier, a Toronto-based food delivery service. Foodora Canada operated in 10 Canadian cities, with over 3,000 partner restaurants before its pullback from Canada.
Foodora Canada Settlement Reached
On July 8, Koskie Minsky LLP became the representative counsel for over 2,000 Foodora Canada couriers who suddenly found themselves out of work. The Foodora couriers included in the settlement have been actively providing services as of Feb. 3, 2020 and were not members of the Canadian Union of Postal Workers and had their employment terminated with Foodora Canada as a result of the cessation of operations in the country.
Under the terms of the Foodora Canada settlement concluded between couriers, Foodora Inc. and Delivery Hero SE, Foodora’s Germany-based parent company, the parent company will compensate the couriers for the terminated contracts resulting from Foodora’s abrupt pullout from Canada.
A key legal dispute arising from Foodora Canada’s exist centres on the food delivery service’s argument that, because it had given two weeks of working notice, it did not owe couriers for their job losses.
Andrew Hatnay, partner at Koskie Minsky, said in the firm’s news release announcing the Foodora Canada settlement that the settlement would significantly benefit the couriers who had lost their primary source of income amid the COVID-19 crisis.
“The result achieved in this case also illustrates the importance of the courts appointing Representative Counsel to vulnerable groups, such as workers in the gig economy, who find themselves without the ability to advocate for themselves or the means to retain counsel to represent them in corporate insolvency proceedings.”
Foodora Canada’s Exit Questioned
Courier union members alleged that Foodora’s exit from the Canadian market constituted an unfair labour practice, because couriers and drivers in Toronto and Mississauga, Ontario, had been granted the right to unionize and be considered dependent contractors by the Ontario Labour Relations Board.
According to the union, it was suspicious that the company cited profitability challenges as its reason for leaving Canada, as Delivery Hero just announced its first-quarter revenue for 2020, which reportedly nearly doubled since the previous year.
The union complained that couriers were suddenly losing their jobs just as COVID-19 was devastating Canada’s market, and many had no other employment or access to government funds.
Should the Foodora Canada settlement be finalized, Foodora couriers will receive an amount of money that approximates what an employee, with a given courier’s length of service, would be entitled to for termination pay and vacation pay under relevant legislation for the period immediately prior to Foodora Canada’s commencement of the bankruptcy process.
The date to opt out of the Foodora Canada settlement has already passed.
Top Class Actions will post the settlement information and claim filing instructions once they become available. Click on the “Follow Article” link at the top of this page to get the latest updates regarding the Foodora Canada settlement by using your free Top Class Actions account. For the latest updates, keep checking ca.TopClassActions.com or sign up for our free newsletter.
Have you recently lost your job with Foodora Canada? Do you think the Foodora Canada settlement is fair? Share your story with us in the comments below!
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