Strict Interpretation of Compliance in the Foreign Worker Program

[The following article appeared in the May edition of The Canadian Immigrant. I have slightly modified it for this blog post.]

Back in 2013, Canada’s temporary foreign worker program was rocked by wellpublicized stories of abuse. As a result, the Government of Canada introduced a comprehensive compliance regime for employers of foreign workers, and promised to ban companies from being able to hire temporary migrants for two years if they breached the new conditions. In 2015, Canada’s Immigration and Refugee Protection Regulations were further amended to introduce an administrative monetary penalty regime, which would also fine employers for non-compliance.

The number of Canadian employers who have either been banned or fined for non-compliance is currently quite small, although both Immigration, Refugees and Citizenship Canada (IRCC) and the Department of Employment and Social Development (ESDC), the two main government agencies that manage Canada’s foreign worker programs, have indicated that the number is likely to grow in the near future, especially considering new funding announced with Budget 2017 to better protect vulnerable workers and to encourage employers to do more to hire Canadians first.

On March 23, 2017, the Federal Court of Canada released its first publicized decision on an ESDC decision to ban a company from hiring foreign workers for two years. The decision, Farms v. Canada (Employment and Social Development), provides much-needed guidance to both companies and to the government on how foreign worker compliance regime should be interpreted.

 Conditions for hiring foreign workers

Employers of foreign workers must agree to comply with numerous conditions outlined in Canadian immigration legislation. The most significant one is the requirement to provide foreign workers with wages and working conditions that are substantially the same as — but not less favourable than — those set out in their offers of employment. Essentially, this means that employers must strictly follow their employment contracts with regards to wages, working hours, duties and benefits.

Other requirements employers must follow include complying with all federal and provincial laws that regulate employment and making reasonable efforts to provide workplaces that are free from abuse. In cases where employers made certain labour market promises (such as job creation or skills transfer to Canadians) to receive permission to employ foreign workers, they must they fulfill those commitments.

Canadian employers of foreign workers can also be subject to both inspections and audits by government officers, and must provide any documentation relevant to their compliance on demand. In fact, the government announced it will be increasing onsite inspections of workplaces that employ foreign workers.

Non-compliance with any conditions will only be justified in certain circumstances, including changes in federal or provincial law, new measures by the employer in response to dramatic changes in economic conditions, or errors that were either made in good faith or as the result of administrative error (if the employer subsequently made sufficient efforts to provide compensation to foreign employees).

Since 2015, the consequences of non-justified non-compliance are administrative monetary penalties and bans on hiring foreign workers.

 Conditions have strict interpretations

In Farms v. Canada, the Federal Court held that the justification provisions mentioned above must be interpreted strictly so the Canadian government can prevent the abuse of foreign workers. The often tenuous circumstances of their employment can lack the normal safeguards preventing abuse otherwise available to most Canadian workers.

The court further found that a good faith justification only works where the non-compliance conduct can be seen to benefit the foreign worker and is in the worker’s interest. As well, where a labour market impact assessment application form or a contract employing foreign workers lists conditions and terms of employment, an employer will be unable to claim a good faith lack of knowledge of any conditions or requirements.

Even where non-compliance may factually be justified, employers will not be able to claim that a breach was justified if they do not document any modifications to employment contracts.  In Farms v. Canada, for example, the employer deducted pay from its foreign worker employees’ first paystubs in order to provide them with cash advances, and even produced a letter from a former employee that confirmed that he had received the cash payment. However, the Federal Court determined that such proof was not sufficient, and that employers had to keep records of changes, and obtain written consent from their employees as it occurred.

 Not enough guidance for employers?

At the same time that the Federal Court upheld ESDC’s decision to ban the employer from hiring foreign workers for two years, the Federal Court also chastised ESDC for not providing clear guidance on its website as to what employers had to do to demonstrate compliance with certain conditions, and specifically noted that small businesses may not know what is required.

The most important thing they should recognize, however, is the need to strictly follow the contractual obligations in their employment agreements with foreign workers. Given the decision in Farms v. Canada, it is important that any ambiguities be interpreted strictly and in favour of the foreign workers.


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