Foreign Worker Issues for Employment Lawyers

Transcription

1 EMPLOYMENT LAW CONFERENCE 2014 PAPER 11.1 Foreign Worker Issues for Employment Lawyers These materials were prepared by Susan J. Martyn of Egan LLP, Vancouver, BC, for the Continuing Legal Education Society of British Columbia, May Susan J. Martyn

2 FOREIGN WORKER ISSUES FOR EMPLOYMENT LAWYERS 1 I. The Basics: Foreign Workers and Employment in Canada... 2 A. Labour Market Opinions... 2 B. LMO-Exempt Work Permits... 5 II. Issues When Hiring Foreign Workers... 6 A. Authorization to Work in Canada... 6 B. Restrictions on Employment in Health Care and Child Care... 7 C. Recruitment Agencies... 7 D. Employment Contracts... 8 III. Issues During a Foreign Worker s Employment... 8 A. Employment Standards Legislation... 8 B. Social Benefits: Employment Insurance ( EI ) and Canada Pension Plan ( CPP )... 9 C. Changes in Employment Conditions... 9 D. Human Rights IV. Issues When Terminating a Foreign Worker A. Impact of Terminating a Foreign Worker B. Foreign Workers and Wrongful Dismissal C. Foreign Workers and the Duty to Mitigate D. Foreign Workers and Constructive Dismissal V. Conclusion At present, there are approximately 75,000 foreign workers employed in the Province of British Columbia, most of whom are concentrated in Vancouver and other urban areas. 2 This large population of foreign workers raises a number of unique considerations in the workplace, which begin with the hiring of a foreign worker and end with the cessation of a foreign worker s employment. In light of this reality, employers are bound to have questions about their obligations vis-à-vis foreign workers. Accordingly, it is important for employment lawyers to have some familiarity with immigration laws and policies so that potential issues can be flagged and properly addressed as employment advice is given. The purpose of this paper is to provide employment lawyers with an overview of some of the distinct issues raised by foreign workers in an employment context. This paper begins with a brief discussion of the work permit application process, including an overview of the Labour Market Opinion ( LMO ) and LMO-exempt work permit categories. The paper then examines issues 1 With thanks to Craig Natsuhara and Nadia Allibhai of Egan LLP for their thoughtful comments and feedback on this paper. 2 CIC, Facts and Figures 2012: Immigration Overview,

3 which might arise during the hiring of a foreign worker including the use of recruitment agencies and the inclusion of immigration-related clauses in employment contracts. Next, the paper canvasses matters which are pertinent during the course of a foreign worker s employment, such as entitlement to social benefits, changes in employment conditions and the applicability of employment standards legislation. Finally, the paper looks at issues that are unique to foreign workers upon the termination of their employment including the entitlement to notice/severance, the impact of constructive dismissal and the duty to mitigate. I. The Basics: Foreign Workers and Employment in Canada Foreign workers are workers who are neither Canadian citizens nor permanent residents. Foreign workers must not work in Canada unless authorized to do so by a work permit or [the Immigration and Refugee Protection Regulations ( IRPR )]. 3 Section 2 of the IRPR defines work as an activity for which wages are paid or commission is earned, or that is in direct competition with the activities of Canadian citizens or permanent residents in the Canadian labour market. In general, foreign nationals must hold a work permit before they can commence employment in Canada. A work permit is a document which authorizes a foreign national to work in Canada, usually for a specific employer, in a specific occupation, and in a specific location. Work permits are valid for set periods of time, up to a maximum of three years. Citizenship and Immigration Canada ( CIC ) manages the work permit application process in conjunction with the Canada Border Services Agency ( CBSA ), Employment and Social Development Canada ( ESDC ), and ESDC s service delivery arm, Service Canada. A. Labour Market Opinions As a general rule, employers must apply for a document called an LMO before a foreign worker applies for a work permit. An LMO basically permits an employer to employ a foreign worker. As the LMO application process can be time-consuming and unpredictable, most employers prefer to explore all options for obtaining a work permit through an LMO-exempt category before seeking an LMO. If no LMO-exempt categories are available to the foreign national, the employer will be required to obtain an LMO before the foreign national can apply for a work permit. Service Canada is the government body responsible for administering the LMO application process as part of the Temporary Foreign Worker Program ( TFWP ). In assessing whether to issue an LMO to an employer for a particular role, Service Canada will consider a range of factors, notably whether: (a) the job offer is genuine; (b) the employer has a history of compliance with the TFWP; and (c) the foreign worker s employment will have a neutral or positive effect on the labour market. 4 As part of the labour market impact assessment, Service Canada will examine the following additional factors: (i) whether the employment of the foreign national will or is likely to result in direct job creation or job retention for Canadian citizens or permanent residents; (ii) whether the employment of the foreign national will or is likely to result in the development or transfer of skills and knowledge for the benefit of Canadian citizens or permanent residents; 3 Section 196 of IRPR. 4 IRPR s. 203(1).

4 (iii) whether the employment of the foreign national is likely to fill a labour shortage; (iv) whether the wages offered to the foreign national are consistent with the prevailing wage rate for the occupation and whether the working conditions meet generally accepted Canadian standards; (v) whether the employer will hire or train Canadian citizens or permanent residents or has made, or has agreed to make, reasonable efforts to do so; (vi) whether the employment of the foreign national is likely to adversely affect the settlement of any labour dispute in progress or the employment of any person involved in the dispute; (vii) if the employer claims that a foreign language other than English or French is a job requirement, whether this is a bona fide requirement for performing the duties; and (viii) whether the employer has fulfilled or has made reasonable efforts to fulfill any commitments made, in the context of any opinion that was previously provided under subsection (2), with respect to the matters referred to in paragraphs (a), (b) and (e). 5 As part of the labour market impact assessment, employers must advertise the foreign worker s proposed role for a minimum period of time to show that they have made reasonable efforts to locate qualified Canadians for the position. Note that Service Canada revises its advertising guidelines frequently. Presently, employers which are seeking to employ a foreign worker in a higher-skilled role (i.e., a position requiring a minimum of a college education or trade certification) must advertise on the government s National Job Bank website and in at least two other forums for a minimum four week period before filing the LMO application. At least one of these advertisements has to be accessible to a national audience. The advertisements must also contain certain mandatory information, such as the company s operating name, the proposed wage/wage range, and educational and skills requirements. 6 Understandably, this mandatory information can be problematic for employers as they are often reluctant to publicly disclose wage information, especially for senior-level positions and, for strategic and market reasons, might prefer to run blind advertisements in which their company name is not identified. On rare occasions, Service Canada will waive some of the mandatory information requirements, but such exemptions are only granted on a case-by-case basis and a compelling reason is usually required. The advertising requirements for lower-skilled positions (i.e., positions requiring only a highschool education and/or on-the-job training) are the same as those for higher-skilled positions except national advertising is replaced with advertising targeted at underrepresented groups. 7 It is important to correctly identify the foreign worker s proposed occupation in the LMO application. This requires an employer to select the most suitable occupation from the National Occupation Classification ( NOC ) by comparing the foreign worker s proposed responsibilities against the relevant NOC categories. The foreign worker s NOC code will need to be specified on the LMO and the work permit. 5 IRPR s. 203(3). 6 ESDC, Stream for Higher-Skilled Positions, 7 ESDC, Stream for Lower-Skilled Occupations,

5 The wage being offered to the foreign worker must be at least equivalent to the prevailing wage for that profession and that region, as determined by ESDC s own wage data. Prevailing wage information can be found at a website which is operated by ESDC. In assessing a foreign worker s proposed compensation, Service Canada will only take guaranteed remuneration in account, such as the base wage or salary. Service Canada will not factor discretionary bonuses, field day rates, tips, commissions or other variable compensation into its wage assessments. Service Canada adheres strictly to the prevailing wage requirement and lacks the discretion to vary this wage for new graduates, entry-level employees and other workers who would otherwise be compensated at a lesser wage. As noted above, the offered wage has become even more important since new laws were introduced that penalize employers which have not complied with wage requirements during the six year period preceding an LMO application and cannot justify the noncompliance. Once an employer has been issued an LMO, the employer must provide a copy of the LMO confirmation to the foreign worker, who may then apply for a work permit. In cases where the foreign worker is a citizen of a visa-required country, they will need to file their work permit application through a visa office in their home country or in another country where they have been lawfully admitted. Work permit applications can be filed online, through a third-party Visa Application Centre and/or directly through the visa office, depending on the locale. As part of the application process, foreign workers of certain nationalities may also need to provide biometric data, including photos and fingerprints, 8 and undergo a medical examination if they have resided in a designated country for six or more consecutive months during the preceding year and are coming to Canada for six or more months. 9 Visa office processing times can be lengthy, ranging from one to four months. Where a foreign worker is a citizen of a visa-exempt country, they have the additional option of submitting their work permit application upon arrival at a Canadian port-of-entry (i.e., a land border crossing or Canadian international airport). The advantage of this strategy is that the application is processed and the work permit is issued on the spot, so there is no protracted processing time. Within the last year, it has become increasingly difficult to obtain LMOs. This is part of a concerted government strategy to force employers to hire Canadians preferentially and to limit the recruitment of foreign workers to situations where a skill set genuinely cannot be found in Canada. 10 In accordance with this mandate, Service Canada has been taking a highly restrictive approach to the issuance of LMOs. It has become commonplace for LMO applications to be rejected on the basis of technicalities, such as omitted application materials or advertisements that do not meet the minimum advertising guidelines. Accordingly, it is imperative that employers strictly adhere to Service Canada s requirements when preparing LMO applications. At present, Service Canada in BC is taking between six and ten weeks to process most LMO applications. 8 CIC, Biometrics, 9 CIC, Find Out If You Need a Medical Exam, 10 See, e.g., Globe and Mail, January 27, 2014, Ottawa to Revise Foreign Worker Rules as Employers Complain of Delays,

6 B. LMO-Exempt Work Permits As previously discussed, employers will generally try to obtain LMO-exempt work permits wherever possible to minimize overall processing times and avoid the red tape associated with the LMO application process. Some of the more common used LMO-exempt work permit categories include intra-company transfers and NAFTA/Free Trade Agreement Professionals. To qualify for a work permit as an intra-company transferee, the employee must: (a) be seeking to work for the Canadian parent, subsidiary, branch or affiliate of a multi-national company; (b) be coming to Canada to work in a specialized knowledge or executive/senior managerial role; and (c) have been employed in a similar role with a related foreign entity for at least one year in the past three years. 11 Foreign nationals who are applying for an intra-company transfer work permit under the specialized knowledge stream must either demonstrate exceptional in-depth familiarity with a company s processes, procedures or equipment, or high-level knowledge which requires a specific background with the employer or within the industry. Alternatively, to qualify under the executive/senior managerial stream, the foreign national must be coming to Canada to assume a role in which they will be managing a department or function within the organization, supervising other managers or supervisors, and exercising discretion over day-to-day activities. 12 Intra-company transfer work permits are issued for an initial period of up to three years. Work permits issued under the specialized knowledge stream can be renewed for a total period of five years, while work permits pursuant to the executive/senior manager stream can be issued for a total period of seven years. The NAFTA Professional category is another commonly-used LMO-exempt work permit category. To qualify for this type of work permit, a foreign national must: (a) be a citizen of the United States or Mexico; (b) be coming to Canada to work in one of approximately 60 different professions; (c) have the necessary educational qualifications for that profession, as outlined in the NAFTA; and (d) have a pre-arranged offer of employment in Canada. NAFTA sets out an exhaustive list of professions that are eligible for this type of work permit, including lawyers, accountants, various categories of scientists, and management consultants. A minimum of a baccalaureate degree in a related field is required to qualify for a work permit to work in most professions. However, computer systems analysts, graphic designers, management consultants, and scientific technicians may be eligible for NAFTA Professional work permits with lesser qualifications or work experience. NAFTA Professional work permits can initially be issued for periods of up to three years and can be extended multiple times as long as the foreign worker continues to have an offer of employment in Canada. 13 Canada has similar Free Trade Agreements ( FTAs ) with Colombia, Peru and Chile, pursuant to which citizens of these countries may also apply for FTA Professional work permits. The eligibility criteria for a Colombia, Peru or Chile FTA Professional work permit is broadly analogous to the NAFTA Professional criteria, except that the Colombia and Peru FTAs contain lists of professionals that are ineligible for work permits instead of setting out an exhaustive list of qualifying professions. Further, permanent residents (as well as citizens) of Colombia and Peru are eligible to for this type of work permit. 11 CIC, Foreign Worker Manual, at CIC, Foreign Worker Manual, at CIC, Foreign Worker Manual, at

7 Other commonly used work permit categories include: International Experience Canada ( IEC ): Students, young professionals and youth may qualify for an IEC work permit if they are a citizen of a participating country and otherwise meet the program criteria. Laypeople often refer to this broad category as working holiday work permits. While the program criteria varies from country to country, applicants must typically be aged 30 or under, have nominal funds to support themselves in Canada and provide evidence of private health care coverage. IEC applicants will receive an open work permit valid for a period of one to two years, again depending on their country of citizenship. Significant Benefits: Foreign nationals who will be making exceptional social, cultural or economic contributions to Canada may be eligible for a work permit pursuant to s. 205(a) of IRPR. Foreign nationals seeking this type of work permit should have a track record of success and be recognized as a leader in their field. Reciprocal Employment Benefits: This work permit category is open to foreign workers who will be working for a Canadian employer which generates significant numbers of jobs and related opportunities for Canadian abroad, pursuant to s. 205(b) of IRPR. To qualify for this type of work permit, the foreign worker s employer must demonstrate a commitment to reciprocity by providing figures for the number of employed Canadians abroad and copies of global mobility and related agreements. Open Spousal or Common-law Partner Work Permits: Spouses or common-law partners (including same sex spouses or partners) of foreign workers who are employed in skilled occupations and hold a work permit valid for at least six months are eligible for an open work permit valid for a period concurrent with their spouse s or common-law partner s work permit. The procedure for applying for an LMO-exempt work permit is identical to the process for applying for an LMO-based work permit. Citizens of visa-required countries must apply for their work permit through a visa office in their home country or in another country to which they have been lawfully admitted. Foreign nationals from visa-exempt countries may submit their work permit application through a visa office or apply upon arrival at a Canadian port-of-entry. II. Issues When Hiring Foreign Workers There are a number of considerations that are unique to foreign nationals during the interview, hiring and on-boarding processes. Employers (and employment lawyers) should be aware of these issues to minimize the employer s legal exposure and to ensure that the hiring process goes smoothly. A. Authorization to Work in Canada Section 124(1) of the Immigration and Refugee Protection Act ( IRPA ) makes it an offence for companies to employ foreign workers without valid work authorization. Employers which have failed to conduct reasonable due diligence to ensure that their foreign workers have proper work authorization could theoretically face fines of up to $50,000, jail time of up to two years or both. 14 Although these penalties have not been imposed often, given the current compliance and enforcement focus, this is expected to change. 14 IRPA s. 125.

8 As mentioned above, with a few exceptions, work permits are employer-, occupation- and locationspecific. During the hiring process, it is critical that employers verify whether new foreign worker hires are authorized to work in Canada and, if so, whether this authorization permits the foreign worker to engage in activities on behalf of the new employer. When gathering information about a foreign worker s status in Canada, employers must take care to not ask any questions which could be construed as discriminating against the foreign worker (or inviting discriminatory responses) on the basis of their place of origin or ancestry. To this end, it is recommended that employers ask foreign nationals if they are authorized to work in Canada for their company, rather than inquiring about their immigration status or their country of citizenship. In the same vein, the BC Human Rights Tribunal has held that human rights protection extends to discrimination against individuals on the basis of their country of training. 15 Accordingly, employers may wish to avoid asking questions about where a foreign worker was educated beyond clarifying whether their credentials are recognized in Canada or if they are a member of any relevant professional bodies (assuming such requirements are rationally connected to the job in question). Foreign workers with an open work permit such as an open spousal work permit or an IEC working holiday work permit usually have the latitude to work for their employer of choice in Canada. However, for foreign workers who are presently working in Canada and hold an employer-specific work permit, a change of conditions work permit application and, often, a new LMO (including prescribed Canadian recruitment) are necessary before the foreign worker can commence employment with the new employer. B. Restrictions on Employment in Health Care and Child Care Foreign workers who will be working in health care, child care, teaching or any other field where they are likely to come into regular contact with vulnerable populations are required to undergo a medical examination before they can obtain a work permit allowing them to work in a restricted field. While open work permits authorize the holder to work for their employer of choice in Canada, such work authorizations usually contain explicit prohibitions against employment in health care, child care and other such fields. Open work permit holders will need to undergo a medical examination and file a change of conditions application to have these prohibitions lifted before they can begin work in a restricted field. C. Recruitment Agencies Pursuant to s. 12(1) of the Employment Standards Act ( ESA ), all employment agencies in BC must hold an operating license. If an employer chooses to retain the services of an employment agency, the employer must verify that the employment agency is properly registered in this province. If the employer uses an unlicensed employment agency to recruit a foreign worker and subsequently applies for an LMO on the basis of these recruitment efforts, the application will likely be refused on the basis that the company retained the services of an unregistered agency. If an employer chooses to use an employment agency to identify suitable candidates for a role, that employer is prohibited from passing on any costs associated with the recruitment agency s services to the foreign worker. These fees cannot be recovered from employees through salary deductions or otherwise. Similarly, recruitment agencies may not charge foreign workers fees for identifying Canadian employers which are seeking qualified employees See, e.g., Bitonti v. British Columbia (Ministry of Health No. 3, BCHRT (1999), 36 CHRR D/ ESA s. 10(1).

9 D. Employment Contracts When hiring a foreign worker, employers should document employment offers in writing and must clearly set out the terms of employment. Any employment offers or contracts cannot contradict or attempt to override immigration legislation. Employers should ensure that the foreign worker s conditions of employment (wages, hours of work, location of work, job title) mirror those set out in the supporting LMO (where there is an LMO). Employers can be subject to a Service Canada inspection (called a Substantially the Same Assessment or STS ) at any point during the six years following the hiring of the foreign worker and may face penalties if they have not been providing the foreign worker with the same occupation and substantially the same wages and working conditions as set out in the employment contract and LMO. 17 To minimize the employer s exposure in the event that the foreign worker fails to obtain a work permit (due to a work permit refusal, an inadmissibility issue or otherwise), a foreign worker s employment offer should include a clause making the offer contingent on the foreign worker obtaining work authorization by a certain date, following which the offer will be null and void. The employment offer or contract should also include a clause stating that the foreign worker s continued employment is contingent on the foreign worker maintaining valid work authorization. To the extent that the employer will be providing the foreign worker with any international perquisites, such as moving allowances, pre-employment orientation trips and cross-border tax advice, these should also be fully documented in the employment offer or contract. The employment offer or contract should also specify what repatriation expenses will be covered by the employer in the event of the cessation of the foreign worker s employment. When hiring a foreign worker, it is critical to include a choice of law clause in the employment contract to establish that BC law will govern the employment relationship and, further, that any legal disputes between the parties will be decided by BC courts. A choice of law clause will limit the foreign national s ability to forum shop if the employment relationship sours. Employers must retain a copy of the foreign worker s offer letter or employment contract, along with a copy of the foreign worker s work permit and any LMO-related documentation for a minimum of six years following the foreign worker s hiring. The failure to do so is a violation of immigration law. III. Issues During a Foreign Worker s Employment A number of questions may arise during the course of employment regarding a foreign worker s eligibility for social benefits and their ability to rely on employment standards and human rights legislation. Several related issues are canvassed below. A. Employment Standards Legislation Foreign workers are entitled to the same rights and privileges as Canadian employees. Foreign workers must be provided with the wages and benefits set out in their LMOs or, if they are employed in an LMO-exempt position, paid in accordance with their employment contracts. Foreign workers are also entitled to overtime, vacation pay and/or vacation time, holiday pay, maternity leave, parental leave, reasonable notice of termination, and all other rights as set out in the ESA and related legislation. 17 IRPR s. 209(2).

10 There are caps on the length of time that foreign nationals may hold particular categories of work permits. For example, a foreign worker may only hold an intra-company transfer/specialized knowledge work permit for a five year period. To the extent that a foreign worker is on an authorized leave, such as maternity leave, this time will not be counted against their work permit maximums. Employers should clearly document any foreign worker leave periods to facilitate future work permit extension applications. B. Social Benefits: Employment Insurance ( EI ) and Canada Pension Plan ( CPP ) Foreign workers may be eligible to collect EI during periods of unemployment, illness, compassionate leave and maternity/parental leave, assuming that they meet the relevant eligibility criteria. EI eligibility is adjudicated by Service Canada on a case-by-case basis. Foreign workers may apply for EI unemployment benefits following the termination of their employment provided that they continue to hold a valid work permit and have worked the minimum number of qualifying hours. Nevertheless, many foreign workers with employer-specific work permits encounter difficulties in obtaining EI by virtue of their restricted status. Service Canada often takes the position that such foreign workers are not really available for work since they cannot easily assume a new position with a Canadian employer. Foreign workers with expired work permits are typically found to be ineligible for EI benefits, even if they have paid the relevant premiums, as they no longer have the ability to legally transition back into the Canadian workforce. 18 Foreign workers may qualify for maternity and parental leave benefits assuming that they have been working in a role in which they have paid EI premiums and have worked the minimum number of insurable hours within the last year. EI unemployment payments can generally only be collected while the foreign worker is physically present in Canada, but compassionate, maternity and parental leave benefits will be paid to the foreign worker if they are outside of Canada. With respect to CPP eligibility, a foreign worker who makes at least one valid contribution to the CPP and is a minimum of 65 years old (or between the ages of 60 and 64 and meets certain additional criteria) will generally qualify for benefits. Foreign workers are eligible to apply for and collect CPP benefits from abroad, even when they have permanently relocated to their home countries and no longer have a connection to Canada. However, some countries have international treaties and other agreements with Canada which govern a foreign worker s eligibility for social security benefits, thereby preventing the foreign worker from double-dipping where their home country has a comparable pension system. Foreign workers covered by such treaties may be exempt from making CPP contributions altogether. C. Changes in Employment Conditions Further to references earlier, employers should be aware that any changes to a foreign worker s wages, working conditions or occupation could be offside of immigration law. As part of ESDC s LMO application process, employers must agree to provide foreign workers with the same occupation and substantially the same working conditions and wages as set out in their employment contract and LMO. 19 As of December 31, 2013, ESDC has the latitude to conduct employer compliance reviews in the context of LMO applications to confirm that an 18 ESDC, Canadian Employment Insurance: Eligibility for Temporary Foreign Workers, 19 IRPR s. 203(1)(e)(2).

11 employer has met the STS provisions for its foreign workers for a period dating back six years from the date when the application was filed. ESDC also has broad new powers to conduct random inspections, including the right to conduct warrantless site visits and to compel document production, to verify employer compliance. 20 CIC has similar powers in the context of LMO-exempt work permits. CIC will only grant LMOexempt work permits to foreign workers who are employed with organizations which have provided all of their foreign workers with the same occupation and substantially the same working conditions and wages as set out in their work permit application materials and employment contracts. 21 There are serious consequences associated with the failure to comply with the STS principle. An employer which is found to have made material changes to a foreign worker s occupation, working conditions or wages may face the suspension or revocation of its LMOs and any associated work permits unless the employer can provide a reasonable justification for such changes. Moreover, an employer may be barred from the TFWP (and, by extension, prevented from hiring or extending any foreign workers) for a two year period. Further, the employer s name may be publicly listed on the ineligible employers list on CIC s website. 22 In addition, the federal government recently announced that it would be introducing new legislation to impose monetary penalties on employers which abuse the TFWP. These new sanctions are likely to come into force in early All of this means that employers have very little latitude to change the occupation, wages and working conditions of foreign workers, even where such changes would be favourable to the foreign worker. This is particularly true with respect to a foreign worker s occupation, where employers no longer have the capacity to re-assign the foreign worker to a new role within the same NOC code. As a best practice, ESDC/CIC should be advised of any changes (beyond de minimis changes) to a foreign worker s wages, duties, hours of work or other working conditions that depart from what is set out in the LMO and/or employment contract. A new LMO and/or a work permit change of conditions application may be required where the employer is contemplating material changes to the foreign worker s employment conditions. The above being said, employers still have the latitude to grant routine wage increases to foreign workers without first notifying ESDC or applying for a new LMO. In fact, as part of the LMO application process, employers must now commit to reviewing a foreign worker s wage on an annual basis to confirm that they are receiving at least the prevailing wage for the occupation and region. D. Human Rights BC s Human Rights Code ( BCHRC ) prohibits provincially-regulated employers from discriminating against employees on the basis of certain protected grounds. In particular, s. 13(1) of the BCHRC bars employers from discriminating against persons on the basis of ancestry or place of origin. Employers are thus prohibited from treating foreign workers in a manner that is differential and less favourable than their Canadian counterparts. 20 ESDC, New Requirements for Employer Compliance, 21 IRPR s. 200(1)(c)(ii.1)(B)(I). 22

12 Employers must be sensitive to the reality that foreign workers are vulnerable to human rights abuses by virtue of their temporary immigration status and the fact that their employment is often tied to one particular company. Any differential treatment of foreign workers that can be perceived as disadvantageous, such as working different shift schedules, reporting patterns, benefits or pay, performance standards, and criteria for advancement, could be considered discrimination. Policies or practices that are neutral on their face may also lead to discrimination if there is an adverse effect on the foreign worker because specific cultural norms or business practices were not taken into account. Employers which treat foreign workers in a discriminatory manner may face human rights complaints. The BC Human Rights Tribunal has considered a number of cases involving the differential treatment of foreign workers, with one of the leading cases being Construction and Specialized Workers Union et al. v. SELI Canada Inc. et al., 2008 BCHRT 436 ( Seli ). By way of background, the defendant, Seli Canada, was retained to carry out tunnel excavation work during the construction of the Canada Line SkyTrain project. The defendant brought a number of foreign workers to Canada from its operations in Latin America and Europe to assist with this work. The plaintiff union filed this claim on the basis that the Latin American employees were being paid less than the defendant s European workforce for carrying out comparable activities on the Canada Line project. The plaintiff further alleged that the Latin American workers received less favourable housing, meal and expense benefits than their European counterparts. By way of response, the defendant argued that its European employees were more skilled than the Latin American workers and were compensated at a higher rate due to differential labour market conditions in the two regions. The defendant further argued that this differential pay could be attributed to the defendant s international compensation program rather than to differential treatment on the basis of place of origin. The BCHRT found that the two groups of workers had equal skill levels and, further, that the defendant had failed to apply its international compensation policies in a consistent manner, which would have allowed certain of the Latin American workers to collect a higher wage. Accordingly, the BCHRT concluded that the Latin American workers had been discriminated against and that there was no bona fide occupational requirement which might justify this differential treatment. As the court wrote: In effect, the application of SELI s actual international compensation practices to the Latin Americans employed by them on the Canada Line project was to take advantage of the existing disadvantaged position of these workers, who are from poorer countries, and to perpetuate that disadvantage, and to do so while they were living and working within the province of British Columbia. As such, the application of those practices in British Columbia perpetuated, compounded and entrenched existing patterns of inequality. [ ] This is contrary to the fundamental purposes of the Code, and cannot be justified, on the evidence before us, as a BFOR. 24 The BCHRT ultimately awarded the wage differential to each Latin American employee, along with $10,000 for injury to human dignity. Employers must therefore be aware of the specific circumstances of foreign workers when making business decisions that could potentially impact this group of vulnerable individuals differentially. In the same vein, employers must work to develop workplace cultures of inclusiveness and take proactive steps to prevent harassment at the job site, thereby limiting the employer s exposure to human rights complaints while creating a positive work environment. 24 Seli at para. 489.

13 IV. Issues When Terminating a Foreign Worker Again, foreign workers are in a disadvantageous position in the workplace by virtue of their immigration status and the fact that their employment is usually tied to a particular company. This status raises some unique considerations upon the cessation of the foreign worker s employment including the foreign worker s ability to accept a position with a new employer, and their rights and obligations upon termination. A. Impact of Terminating a Foreign Worker If a foreign worker quits or is terminated from their employment, they are legally entitled to remain in Canada until their work permit expires. The work permit is a personal document so an employer cannot demand that it be surrendered. Accordingly, following the cessation of employment, a foreign worker may continue to reside in Canada while they search for new employment. Further, spouses or common-law partners may continue working on the basis of their open spousal work permits and minor children may continue attending public school using their study permits or visitor records. If the foreign worker is successful in securing a new job offer, their prospective employer will need to obtain an LMO for the foreign worker s role (assuming that the foreign worker is ineligible for an LMO-exempt work permit) and the foreign worker will need to apply for a change of work permit conditions to obtain authorization to work for this new employer. The LMO and change of conditions application processes can cumulatively take upwards of four months and the foreign worker cannot commence work with the new employer until such time as the change of conditions application has been processed. While an unemployed foreign worker may remain in Canada until their work permit expires, they (and their accompanying spouses and minor children) may run into complications when attempting to re-enter the country if they leave and try to re-enter on the basis of this work permit. In such circumstances, the CBSA may take the view that the foreign worker no longer has a valid reason for entering Canada when the underlying reason for the granting of the work permit has been extinguished. Accordingly, if an unemployed foreign worker departs from Canada for any reason, they may be denied re-entry to Canada as a worker. Employers should also be mindful of the impact of termination on a foreign worker with a pending permanent residence application. Where a foreign worker has applied for permanent residence under an employer-driven category, such as the BC Provincial Nominee Program ( PNP ), or an employment-dependent category, such as the Federal Skilled Worker Program s arranged employment stream, the employer is obliged to inform the relevant government agency of any changes to the foreign worker s employment status. In the event that a foreign worker s employment is terminated, the BC PNP office may revoke their nomination for permanent residence. In the case of a Federal Skilled Worker Program application, CIC will likely refuse the application since the foreign worker no longer has arranged employment in Canada. B. Foreign Workers and Wrongful Dismissal There is a dearth of caselaw regarding the legal entitlements of terminated foreign workers, which is attributable to several factors. First, many lower-skilled workers simply do not have the financial resources or language skills necessary to pursue legal action. Second, foreign workers who remain in Canada following their termination typically experience an extended period of unemployment as they search for a job and apply for a new work authorization. During this period, the foreign worker will not be earning any employment income, a situation which is highly prohibitive to legal action. Third, as it can be challenging for terminated foreign workers to secure new jobs in Canada, many foreign workers instead return to their home countries and abandon any legal claims against their former employers.

14 The little caselaw pertaining to foreign workers and severance suggests that courts will take a foreign worker s immigration status into account when assessing the appropriate notice period, particularly where the foreign worker holds an employer-specific work permit and cannot easily obtain alternative employment. Nishina v. Azuma Foods (Canada) Co. Ltd., BCSC ( Nishina ) is the leading case on foreign workers and severance. Nishina involved a Japanese national who was 43 years old and employed as a Quality Control Associate with the defendant company. The plaintiff was initially hired by the defendant company s operations in Haywood, California, where she worked for a four year period. She was subsequently transferred to the defendant s location in Vancouver, where she was employed for a further two year period. In October 2007, the plaintiff was terminated, allegedly for cause, due to insubordinate behaviour. She then filed a lawsuit for wrongful dismissal. At trial, the court affirmed that the plaintiff had been wrongfully dismissed and awarded the employee 12 months pay in lieu of notice despite the fact that she had only been employed with the defendant a total of six years. The court s decision pivoted on the fact that the employee held an employer-specific work permit, which restricted the employee s ability to find alternative employment. As the court wrote: At the time of dismissal, Ms. Nishina had been trained and had worked as a QC supervisor for several years. However, her immigration status in Canada was tied to her employment with Azuma Foods, such that she could not work for another employer. This set of circumstances seems almost akin to the situation where an employee is dismissed in a one-employer town. That is, an employee, though qualified and experienced, faces a dearth of alternate employment prospects. This factor weighs heavily in favour of a longer notice period. Azuma Foods knew when it dismissed Ms. Nishina that she could not work for another employer. 25 Similarly, Major v. Phillips Electronics Ltd., 2004 BCSC 438 ( Major ) involved a 50 year old plaintiff who was employed with the defendant company in an engineering management role. The plaintiff commenced employment with the defendant in 1994, working both in his home country of the US, as well as in India. In February 2001, the plaintiff was transferred to the defendant s operations based in Richmond, BC. He held an employer-specific work permit. Shortly after his transfer to Canada, the defendant company sold all of its assets to a third party company and the plaintiff (along with most of the defendant s workforce) accepted a position with that company. The plaintiff was dismissed without cause by the third party company in October 2001 and subsequently alleged that he had been wrongfully dismissed. The plaintiff then looked to recover from both the defendant and the third party company. The plaintiff and the third party company agreed on a small settlement, whereupon the plaintiff initiated a lawsuit for wrongful dismissal against the defendant company. 26 At trial, the court noted that the plaintiff held an employer-specific work permit which limited his ability to obtain alternative employment. The plaintiff did not, in fact, secure new employment for a full 16 months following his termination and had to retain immigration counsel to assist him in obtaining a new work permit. In assessing the plaintiff s entitlement to severance, the court wrote that, [The Plaintiff] had to relocate to obtain the position, lost his ex-pat status, and was left in the position where he only had a work permit for that specific employment. In these circumstances 25 Nishina at para In Major v. Phillips Electronics Ltd., 2005 BCCA, the BC Court of Appeal found that the defendant company and the third party purchaser had failed to enter into an agreement which expressly extinguished the plaintiff s employment contract with the defendant. The court thus concluded that novation did not occur here, meaning that there was still a valid employment relationship between the plaintiff and defendant. Accordingly, the plaintiff had a right of action for wrongful dismissal against both the defendant and the third party purchaser for the termination of his employment.

15 an appropriate notice period is an additional twelve months at an income of $198,000 per annum. 27 The plaintiff was also awarded fees of $6, representing the plaintiff s out-of-pocket expenses for retaining immigration counsel and applying for a new work permit. This decision was subsequently upheld by the BC Court of Appeal in Major v. Phillips Electronics Ltd., 2005 BCCA 170, although the award for immigration legal expenses was overturned as the court found that the parties had explicitly agreed that the plaintiff would be responsible for all immigration-related expenses. C. Foreign Workers and the Duty to Mitigate It is an established principle of employment law that employees who have been wrongfully dismissed must seek out alternative employment, with a view to mitigating their loss of employment income. There is an absence of caselaw regarding the scope of a foreign worker s duty to mitigate in the context of wrongful dismissal. Both Nishina and Major generally affirm that foreign workers, like all employees, have a duty to act reasonably and search for alternative employment following the termination of their employment. However, neither case explicitly recognizes the proposition that it will take a foreign worker longer than a similarly situated Canadian to secure comparable employment due to the need to obtain a new LMO and work permit. Nevertheless, the courts in Nishina and Major were alive to the unique challenges faced by foreign workers who must seek out new employment following the termination of their employment. It follows that, if a court were to specifically consider the scope of a foreign worker s duty to mitigate, they might recognize that foreign workers require extended timeframes to mitigate their income losses. If it takes a foreign worker longer than a similarly situated Canadian to locate comparable work, this means that there will be less employment income to offset the foreign worker s entitlement to severance during the notice period. Accordingly, employers which are facing wrongful dismissal suits in such circumstances may be required to pay out greater than normal damages. D. Foreign Workers and Constructive Dismissal As with the duty to mitigate, there is a dearth of caselaw on the issue of foreign workers and constructive dismissal. Constructive dismissal occurs when an employer has made a unilateral and fundamental change to a term or condition of an employment contract without providing reasonable notice of that change to the employee. 28 By virtue of ss. 200(1)(c)(ii.1)(B)(I) and 203(1)(e)(2) of IRPR, employers have little latitude to make changes to a foreign worker s employment conditions fundamental or otherwise without violating immigration legislation. As noted earlier, if an employer fails to provide its foreign workers with the same occupation and substantially the same wages and working conditions as set out in the employment contract or LMO, the employer could face the revocation or suspension of any LMOs and associated work permits, a bar from hiring any further foreign workers for a two year period and possible monetary penalties. Accordingly, any attempt to make a unilateral and fundamental change to a foreign worker s employment conditions would likely constitute a violation of IRPR. 27 Major at para Farber v. Royal Trust Co., [1997] 1 S.C.R.

16 Further, the seminal case of Evans v. Teamsters Local Union No. 31, [2008] 1 S.C.R. 661 affirmed that employees have a duty to mitigate their losses following constructive dismissal where offered a comparable position with their employer and where such a position would not require them to work in a hostile or humiliating work environment. To the extent that such an offer would involve new terms of employment, a foreign worker would likely be barred from accepting such a position for the purposes of mitigation unless they first applied for a new LMO (if necessary) and a change of work permit conditions. Accordingly, employers which implement a unilateral and fundamental change to a foreign worker s employment conditions may face serious consequences under immigration law, in addition to a potential lawsuit for wrongful dismissal. V. Conclusion Foreign workers raise some unique considerations in the workplace, from the initial recruitment of the foreign worker through to the cessation of that foreign worker s employment. The purpose of this paper is to provide employment lawyers in BC with an understanding and awareness of the complexities surrounding the hiring and firing of foreign workers. Armed with this knowledge, employment lawyers should be better equipped to flag potential immigration issues for their clients, thereby minimizing the employer s legal exposure and creating a more positive working environment for all employees.