By Steve Scherer
OTTAWA (Reuters) - Canada's Supreme Court on Friday ruled in favor of a driver in a gig economy case that paves the way for a class action suit calling for Uber Technologies (NYSE:UBER) Inc to recognize drivers in Canada as company employees.
UberEats driver David Heller had filed a class action suit, challenged by Uber, aiming to secure a minimum wage, vacation pay and other benefits like overtime pay. Drivers are now classified as independent contractors and do not have such benefits.
Heller's attorney said the decision allowing him to sue was important, but only a small first step in a case that will probably take years to litigate.
The ride-hailing company's contract allows arbitration, but not class-action lawsuits. After the ruling, an Uber spokeswoman said the company would amend its contracts "to align with the court's principles", without giving details.
"Going forward, dispute resolution will be more accessible to drivers," the spokeswoman said in a statement.
Two days ago, California said it plans to ask a state court judge to force Uber and Lyft Inc (NASDAQ:LYFT) to classify their ride-hail drivers as employees rather than contractors.
Canada's 8-1 Supreme Court ruling dismisses an Uber appeal to an Ontario high court ruling that said the Uber's arbitration clause violates provincial labor rules and is "invalid and unenforceable."
The arbitration process, which must be conducted in the Netherlands where Uber has its international headquarters, costs about C$19,000 ($14,500). Heller earned between C$21,000 and C$31,000 per year.
"This was an access to justice case," said Michael Wright, one of Heller's lawyers. The court essentially ruled that "a stronger party was taking advantage of a weaker party in an unfair manner," said Wright.
Now Heller can restart his class action suit, Wright said, but the matter will not be settled soon.
"This is the first round in a series of rounds," said Wright, a labor and employment lawyer with Wright Henry LLP in Toronto, adding that it could take "a few more years."
Uber shares were down 2.7% around noon Eastern Time.