Federal Court Affirms New ESDC Internal Part-Time Recruitment Policy

In January 2015 the Federal Court released its decision in Frankie’s Burgers Lougheed Inc. v. The Minister of Employment and Social Development Canada, 2015 FC 27 (“Frankie’s Burgers“).  Frankie’s Burgers is one of the first Federal Court decisions involving an employer seeking judicial review of a decision of the Ministry of Economic and Social Development Canada (“ESDC“) to not issue a positive Labour Market Impact Assessment (“LMIA“), which was then referred to as a Labour Market Opinion (“LMO“).

Frankie’s Burgers should be read by all representatives and employers who submit LMIAs.  In my opinion, the case shows that the Federal Court seems prepared to show much greater deference to ESDC in its administration of the Temporary Foreign Worker Program (the “TFWP“) than it does to both Citizenship and Immigration Canada and the Immigration and Refugee Board.  Lawyers who were anticipating that the Federal Court would force ESDC to change some of its (often internal and secretive) policies should also take pause.

Chief Justice Crampton’s decision in Frankie’s Burgers contains many interesting pronouncements, including the following:

  • Justice Zinn’s statement in Construction and Specialized Workers’ v Canada (Citizenship and Immigration), 2013 FC 512, (commonly referred to as the ‘HD Mining decision’) that “an employer must be given some latitude in its hiring even within the TFWP” cannot be extended to the point that an employer’s latitude is inconsistent with the Immigration and Refugee Protection Act (“IRPA“) and the Immigration and Refugee Protection Regulations (“IRPR“).
  • The decision states:

“Contrary to what the Applicants’ position would imply, the TFWP was not intended to be used as a means to allow employers to change industry standards by excluding segments of the workforce in Canada, such as students or other young people, who traditionally have filled particular positions through part-time work. Moreover, ESDC was not under any obligation to provide employers advance notice of this in the Guidelines.”

It is not clear whether the Federal Court has determined that ESDC is not under any obligation to provide advance notice of any of its internal directives, or just this principle.  To many employers and representatives, including myself,  who have long been critical of ESDC’s use of internal directives when refusing LIMA applications, Frankie’s Burgers could legitimize ESDC’s practice.

  • Employers are required to meet the minimum LMIA recruitment requirements before they apply for the LMIA.  The fact that ongoing recruitment efforts are also required simply ensures that employers will continue to endeavour to find Canadian citizens or permanent residents to fill the vacant positions until a positive LMIA is issued.  I always thought that the Federal Court would uphold this ESDC requirement, but given that many lawyers disagreed with me the Federal Court’s statement is worth noting.
  • The fact that the unemployment rate is low in a geographic region does not mean that there is a labour shortage.
  • It is reasonable of ESDC to require the full business address and full address for the location of employment.  Simply putting “Our Lougheed, Vancouver, BC locaiton is insufficient.”
  • IRPR r. 203(3)(e) requires ESDC to assess whether an employer made reasonable efforts to hire or train Canadian citizens or permanent residents. The ESDC website, however, simply suggests that employers target under-represented groups by “trying” to recruit workers from organizations such as local or provincial/territorial employment centres and services centres for Aboriginal youth. As the Federal Court then stated: “This is precisely what the Applicants endeavoured to do. Assuming that they did in fact supply to the officer the information that they faxed to the organizations in question, together with the information regarding their contact persons at those organizations, it was unreasonable for the officer to have required additional information regarding the duration and timing of the posting of the advertisements by the organizations. This information was not readily available to the Applicants or the Third Party.”
  • Employers have a legitimate expectation that they will be afforded an opportunity to respond to any concerns that an ESDC officer may have regarding their credibility or the authenticity of documentation that they supply in support of a request for a positive LMO.

Part-Time Recruitment

Arguably the most significant aspect of the Frankie’s Burgers decision was the Federal Court’s affirmation that it was reasonable for ESDC to refuse the employer’s LMO application because, in part, that the employer did not advertise for part-time positions.  In the refusal decision ESDC stated that:

Service Canada is unable to issue a positive labour market opinion for a position where the requirement(s) is/are limited to full-time given that such conditions are not the norm for the industry and deemed to be excessive.

According to the Federal Court, in ESDC’s notes to file, ESDC elaborated that:

The officer elaborated upon her concern in her Notes to file, where she stated the following: “Advised [the Applicant] that the norm in the industry is PT and if [sic] she has considered hiring PT staff? [The Applicant’s] response was that was not the norm with Fatburger.” The officer’s Notes to file added that the approximately 59% of the workforce is part-time and 41% full-time, with 61% being between the ages of 15 and 24. Later, under the heading “DECISION: REFUSE,” the officer stated: “Not a reasonable employment need (Norm in industry is PT – [Terms of employment] on ad’s [sic] don’t list PT.” PT refers to part-time.

In reaching the conclusion that it was reasonable for ESDC to require that the employer recruit for part-time positions even though the employer wanted to hire full-time employees, the Federal Court noted that:

I recognize that it may well cost the Applicants more to hire, train, and schedule part-time workers, relative to full-time workers, and that the latter may well perform better and be more reliable over the long-run than the former.

However, the Applicants did not direct my attention to anything that would support the proposition that the reasonableness of the officer’s decision should be assessed primarily by reference to these considerations. Indeed, it is readily apparent from subsection 203(3) of the Regulations that the reasonableness of the officer’s decisions should be assessed by reference to the ultimate test of whether “the employment of the foreign national is unlikely to have a positive or neutral effect on the labour market in Canada as a result of the application.” The seven specific criteria set forth in paragraphs 203(3)(a) – (g) reinforce this orientation, and do not in any way allude to or contemplate the types of considerations or latitude emphasized by the Applicants.

Considering that the majority (59%) of workers in the restaurant business are part-time, and that approximately 61% of them are between the ages of 15 and 24, it was not unreasonable for the officer to be concerned that Canadian citizens or permanent residents who may otherwise have been available to fill the Applicants’ FCA positions had not been provided with the opportunity to apply for those positions. Indeed, this concern was rooted firmly in paragraph 203(3)(e) of the Regulations.

The Reliance on Manuals

Anyone who has applied for LMIAs knows that ESDC officers often say that their “website is law.”  One officer once told me that “It doesn’t really matter to me what an Act says, I follow the website.” The Federal Court in Frankie’s Burgers has put ESDC on notice that this must stop.

As the Federal Court stated, it is trite law that administrative guidelines are not binding and cannot be applied in a manner that unduly fetters a decision maker’s discretion.  However, as the Federal Court stated:

So long as the Guidelines are not binding on officers, and are applied in a manner that permit departures where warranted, it is not unreasonable for officers to apply and follow them in the majority, or even the substantial majority of cases.

In this context, it is not reasonable to expect that the ESDC should explain why departures from the Guidelines are not made, unless the particular circumstances of an applicant’s case are such that it would be reasonable for such a departure to have been given serious consideration. One would expect that such circumstances would be somewhat exceptional or unusual in nature.

Notwithstanding the foregoing, the Guidelines could be much clearer regarding their flexible application. In this regard, an explicit statement at the beginning of the Guidelines, stating that departures from them may be made in appropriate circumstances, would have been helpful. In any event, in applying the Guidelines, officers would be well advised to avoid using language that may suggest that the Guidelines are binding in all circumstances.

Conclusion

As hopefully shown above, there is a lot in Frankie’s Burgers for employers and representatives to digest.  There is also likely going to be increased litigation over the TFWP, and this case is likely to be repeatedly cited by both employers and ESDC.   

[UPDATE] – March 5, 2015

While reviewing results obtained through an Access to Information Act request I noted a rather interesting Question / Answer between a TFWP program officer and a Business Expertise Consultant (the “BEC“).  The exchange reveals the somewhat unusual way in which ESDC interprets IRPR and its guidelines, and the general tension that often emerges between the TFWP Guidelines and the application of IRPR.

And another one.

 


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