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Sex work

Canada’s latest attempt to regulate the sex trade opens up debate over employment law protections for sex workers.

Katrina Pacey
Katrina Pacey Photography by Venturi+Karpa

Bill C-36, Canada’s proposed new law regulating the sex trade, may not be a long way from the street. (It was at the report stage in the House of Commons at press time.) But largely ignored by the government in its efforts to replace the prostitution laws struck down following the Supreme Court’s Bedford ruling last year is how the sex-worker industry would be regulated from an employment perspective.

Ever since Bedford, much of the debate surrounding a new legal regime for sex work has revolved around whether Canada should adopt a Nordic approach — making prostitution a crime but targeting only the buyers of sex — or draw inspiration from the Dutch, and decriminalize it. Parliament has opted for the former.

But there are lawyers who anticipate that Bill C-36 is nevertheless condemned to the constitutional dustbin because it unfairly erects barriers to sex workers who seek employment protection. Katrina Pacey, legal director at Vancouver-based Pivot Legal Society, is among them. “C-36 will have the effect of continuing to make the conditions of sex workers lives and their work more dangerous,” says Pacey. “The spectre and reality of criminalization will mean that they continue to have a lack of access to the supports and services they need — whether those be legal supports, or equal and full access to social supports.”

Neither the government nor the courts have acknowledged the sex trade as “work.” Indeed, Ottawa’s commitment to abolishing the trade altogether —– under the new law, it’s clear that prostitution will be regarded as a societal harm and not, as advocates want, legitimate work – hasn’t left much room to discuss the minutiae of legal protections for those sex workers who, thanks to Bedford, will have their work effectively decriminalized as of December, with or without the new legislation.

But the legal framework around the industry is something that Ottawa will have to address sooner or later. For now, Bill C-36 makes it illegal to buy sexual services or run a brothel but it will be legal to solicit clients or run a sole-proprietor business.

That could complicate matters for sex workers wishing to meet the necessary tests to label themselves employees — not to mention that their employers would be considered criminals. Still, sex workers might yet succeed at leveraging Canada’s employment laws to their benefit.

Who’s the boss?

“The big hurdle, to get labour laws [to apply], is you need an employer,” says Gwendoline Allison, a partner at the Foy Allison Law Group in Vancouver and author of a report which offers insight into how employment law may apply, or have to shift and bend, depending on how the criminal law treats prostitution.

According to Allison, who intervened as co-counsel on behalf of the Asian Women Coalition Ending Prostitution in Bedford, the very nature of prostitution frustrates existing labour law. A sex worker working on the street level, for example, is likely to have a pimp who collects her earnings before paying her back a portion. That relationship, which Bill C-36 deems “exploitative,” will be criminalized under Ottawa’s new regime. But provincial labour codes also require employers to pay their employees wages and to justify any deductions. So could a pimp be found liable for unpaid wages and overtime, assuming a sex worker would be inclined to sue for wages?

It’s also unclear whether the courts would treat sex workers working in brothels as independent contractors or as employees. Similar to strip clubs and massage parlours, in brothels the sex workers may keep all, some, or none of the rate they earn, plus tips; or they may pay the owner for the space, and contribute some of their fee.

The distinction is hardly trivial. Employees are afforded certain protections through employment standards legislation, and are guaranteed a minimum wage and holidays. They can form unions and access human rights tribunals.

To date, the Supreme Court’s most informative decision on the matter comes in the 2001 Sagaz Industries decision, which set out a general test to determine whether someone constitutes an independent contractor or an employee. Among the factors to be considered are the worker’s level of autonomy, his or her use of personal equipment on the job, choice of staff, any financial risk assumed by the worker, and, most importantly, the degree of control the employer exerts on the worker.

Applied to sex workers, the test would require us to consider whether the manager is responsible for the purchase of prophylactics, clothing, and payment of the room rental. Does the manager employ support staff? What economic opportunities does the sex worker have resulting from the business?

Pacey, who was co-counsel in Bedford, thinks sex workers meet that test. “When I look and I actually dissect the conditions of work, and the circumstances of someone’s employment, I would, in my legal opinion, characterize them as employees,” she says.

“But they don’t have any recourse to articulate that and to argue to their employer to say, ‘actually, I’m an employee and I’d love to go over to employee standards to prove that.’ So they get painted with the independent-contractor brush, which I don’t believe is the case for many, many of these workplaces,” Pacey says.

The big question, says Allison, is how much freedom the sex worker has within the brothel or agency. If sex workers could prove that the management at the brothel did, indeed, have a direct level of management and control of their work, the sex workers would be deemed  employees.

It’s important to remember that under Bill C-36, sex workers could still face arrest if they communicate in certain public places, or if they run afoul of the ban on running a commercial enterprise. So a critical consideration, when establishing whether workers can invoke rights under employment law, is whether the “employer” — say, a brothel owner — would be criminalized.

The new law legalizes non-exploitative relationships between sex workers and those deriving material benefit from them — namely drivers, bodyguards, and landlords. The caveat is that they have to charge a market price to the sex worker, and they also have to offer their services to the general public.

That said, the legislation criminalizes the owners of commercial enterprises that offer sexual services. So it’s unclear exactly where the line falls between a hotel owner who caters to many sex-worker clients, and someone who is running a commercial enterprise that offers sexual services.

Theoretically, if that hotel owner was given the go-ahead to run his business, and he had some managerial involvement with the sex workers, he could be considered an employer.

A court would have to decide: is the relationship exploitative? If not, is the owner of this hotel receiving fair market benefit for his service? If so, is that service available to the public?

That last one is the key question, says Pacey. If a hotel rented only to sex workers, it would be illegal; if businessmen and families were welcome, too, then it would be legal.

This seemingly arbitrary distinction might well open that section of the new law to court challenges, in much the same way the old bawdy house provisions were struck down in Bedford. That may result in hotel owners being personally liable for the occupational health and safety of sex workers. And that would be an opportunity to wedge in labour rights for sex workers by claiming that a prospective business owner meets the test of employer under the Sagaz test.

A question also remains as to whether erotic massage parlours and escort agencies would be criminalized under Bill C-36. The bill does not clearly define “sexual service” as encompassing the grey area where such businesses have always operated. The government has certainly suggested that this is its intention, however, closing establishments that have now been allowed to operate for years may prove difficult.

It is also in this type of business that sex workers would be able to clearly establish the presence of an employment relationship with the owners.

What’s more, under certain circumstance, the sex workers themselves may act as the employer — for example, if they band together in cooperatives or collectives to defray costs and share in the hiring of employees. It’s unclear whether such partnerships would be legal owing to the prohibition against deriving a material benefit for a commercial enterprise. But should the partnership stand up to scrutiny, they would have to provide an equitable workplace for their employees — receptionists, bodyguards, drivers, and so on.

Meeting of the minds

Also complicating matters in determining the employment status of sex workers is that contracts, unsurprisingly, are rare in the sex-worker industry.

Indeed, contracts contrary to the Criminal Code are null and void. But if legalization ever comes to pass, they could become instrumental in allowing sex workers to claim the benefits of labour protections. Sex workers could sign a contract with their employer outlining which services they would, and would not, consider providing. The question then becomes one of consent — would sex workers sign away their autonomy, and could an employer sanction or fire an employee for not delivering services set out in their contract?

“I think that happens in any workplace — an employer says: ‘you’re not doing your job well enough, you’re not doing this,’ — then you’re able to appeal that decision and give the reasons why you’re not doing it,” says Kerry Porth, Pivot Legal Society’s chairwoman and a former sex-trade worker.

It’s impossible to transfer consent, says Pacey, and sex workers would always have the right to refuse service. An unhappy employer ripping up the contract could invite a wrongful termination suit.

At the same time, if workers have the right to refuse service and choose their clients, it does imply that they have autonomy within the business. According to Allison, one could argue that the sex worker is acting as an independent contractor. Evidently, these claims are complex in a legalized regime. “I don’t see why it wouldn’t come up, eventually,” says Allison.

A workplace like any other?

Be it in a brothel or on the street, much of what is considered commonplace in the sex industry would be deemed unacceptable in any other workplace. That makes applying occupational health and safety rules tricky, to say the least. “Both employers and independent contractors have occupational health and safety requirements,” says Allison. When it comes to prostitution, “you’ll have to start from scratch.”

It’s unlikely that any brothel or agency would be terribly interested in paying into workers’ compensation, but that doesn’t mean liability wouldn’t be an issue. Either the client or the worker could allege that the other passed on a sexually transmitted disease. Violence also presents a real risk.

According to Allison, if brothels were ever to be legalized, a unique set of standards, best practices, and requirements would have to be put in place.

An obvious area of concern is mandatory STI testing — something that is required in parts of Australia. Sex-work advocates contend that this would constitute a human rights violation, and the Supreme Court of Canada might agree; in a 2013 case between a paper mill and its union, it found that the employer could not order random drug and alcohol tests to its employees.

Mandatory testing of sex workers also presents a challenge to authorities, says Pacey. Would sex workers have to register with a licensing board? A ham-fisted effort to try to institute a database of sex workers might not have the intended consequences. “It might not feel like support,” says Pacey. “It might feel like an investigation.”