Foodora Riders to Receive Compensation In Light of Exit From Canadian Market

Friday, 04 September 2020 03:32.PM

Koskie Minsky LLP ("Koskie Minsky") announced that a $3.46 million settlement has been reached on behalf of more than 2,000 former non-union Foodora food delivery service workers in Canada (known as "Riders") who abruptly lost their jobs with Foodora Canada when it ceased operations on May 11, 2020, after filing a notice of intention to make a proposal under the Bankruptcy and Insolvency Act on April 27, 2020.

The settlement between the Riders, Foodora Inc., and Foodora's parent company, Germany-based Delivery Hero SE ("Delivery Hero") and the Canadian Union of Postal Workers ("CUPW", which represents Riders in Toronto and Mississauga) will see Delivery Hero make payments to the Riders to compensate them for the termination of their contracts due to Foodora's sudden exit from the Canadian market. The settlement also resolves ongoing labour claims by the CUPW against Foodora Canada and Delivery Hero that were before the Ontario Labour Relations Board.

The agreement was negotiated following Koskie Minsky's appointment as Representative Counsel on July 8, 2020, to all the Foodora Riders who are not represented by the CUPW and who were actively providing services to Foodora when it announced its intention to make a proposal. Koskie Minsky had been consulted earlier by several Riders for advice about compensation for them as a result of job losses. Koskie Minsky proceeded to object to Foodora's proposal on the basis that Riders were not being treated as creditors and therefore would not automatically receive compensation. "This settlement will provide significant compensation to Riders who lost their primary source of income in the midst of the COVID-19 pandemic and economic downturn as a result of Foodora's actions," noted Andrew Hatnay, a partner at Koskie Minsky. "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."

SOURCE: Koskie Minsky LLP