Delivery drivers launch $150-million class action suit against Pizza Nova

Canadian pizza chain Pizza Nova is facing a multimillion-dollar class action claiming its independently owned franchises misclassified delivery drivers as independent contractors and failed to pay them minimum wage.

In what the lawsuit calls a "systemic breach" of provincial employment laws, delivery drivers at 140 Pizza Nova stores across Ontario were denied "appropriate compensation" and protections because they were not classified as employees, according to the statement of claim.

The suit, which was filed in March, seeks $150 million in damages for drivers dating back to 2012. The company denies the claims.

"I've spent years of my life working as a pizza delivery driver and experiencing the problems of employment misclassification in the industry first-hand," said Juan Jose Lira Cervantes, the representative plaintiff for the class action.

Cervantes said he decided to step forward to "fight against employment misclassification and to improve working conditions for the pizza delivery driver in an industry that treats them poorly."

In a statement to the Star, Pizza Nova president Domenic Primucci said the company "denies the allegations made by Mr. Cervantes in the lawsuit."

"Pizza Nova is the franchisor of 'Pizza Nova' businesses, each of which is independently owned and operated," Primucci said.

"Our current focus is on addressing the impact that the COVID-19 pandemic is having on us, our staff and our franchisees. As a result, we will not be providing any further comments at this time."

Josh Mandryk, a lawyer with Goldblatt Partners - the Toronto-based labour law firm launching the class action - described driver misclassification as "pervasive in the pizza delivery industry" and said it "denies these workers of core workplace protections."

The COVID-19 pandemic "highlights not only how critical these workers are to Pizza Nova's operations, but also how important it is that they receive the same basic workplace protections as other employees," added co-counsel Ella Bedard.

Cervantes worked as a delivery driver for four Pizza Nova stores in the GTA, the claim says, and was terminated after more than six years of service for refusing to clean a store's bathroom.

During his time as a delivery driver, he was classified as an independent contractor, according to the suit, a category of worker that is not protected by provincial employment laws. He was paid between $6 to $9 and he did not receive overtime, vacation or public holiday pay, the claim says, and he paid for expenses - including gas and car maintenance - out of pocket.

Pizza Nova did not make Canadian Pension Plan or Employment Insurance contributions on behalf of their drivers, or pay workers' compensation premiums, the lawsuit claims.

As reported by the CBC in 2018, the provincial Ministry of Labour found a Domino's Pizza franchise that previously employed Cervantes misclassified him as an independent contractor. The franchise was ordered to pay him more than $25,800. Cervantes only received $6,300 because the franchise voluntarily dissolved, even though "the same pizza business continues to operate at the very same location," Mandryk said.

"This experience highlights deep flaws in Ontario's employment standards regime and its failure to protect working people," Mandryk told the Star.

"Mr. Cervantes decided to pursue a class action and to be the representative plaintiff in this action because he wanted to create real and systemic change at Pizza Nova and in the pizza delivery business more broadly."

Independent contractors are defined under Ontario law as workers who are essentially self-employed: they make their own schedules, determine how their work should be done and can't be disciplined by a superior. It is prohibited to classify a worker as an independent contractor if they meet the legal definition of an employee.

The class action says Cervantes worked according to schedules created by Pizza Nova franchisees, was assigned orders by the stores, and wore a Pizza Nova uniform while on the job. When not delivering orders, the suit says he performed "in-store duties as required."

Some 65 per cent of the company's business is delivery, according to the suit, which must now be certified by a judge.

Overall, the level of "integration, supervision and control imposed" by the pizza chain on drivers "establishes an employment relationship," the class action says.

Despite its franchise model, the class action argues Pizza Nova is a "common employer" and liable for damages because it set overarching standards for its independently owned franchisees to follow - including delivery drivers' contracts, assigning deliveries and minimum staffing levels.

Drivers are "in a position of vulnerability in relation to the defendants," the claim notes.

"The defendants owed a duty of care " to ensure they were accurately classified as employees and properly compensated for all hours worked."