Can People Working Without Status Enforce Contracts?

10th Aug 2012 Comments Off on Can People Working Without Status Enforce Contracts?

The Ontario Labour Relations Board (the “OLRB“) has just released a fascinating decision which involves the interplay between immigration and employment law.  The case involved a German foreign national who entered into an employment agreement with Essar Steel Algoma (the “Employer“) prior to Citizenship and Immigration Canada (“CIC“) issuing him a work permit to work for the company.  Things did not work out between the Employer and the foreign national, and the Employer terminated the relationship.  The United Steelworks of America (the “Union“) filed a grievance, and the issue of when the foreign national became an employee of the Employer arose.

The OLRB decision involved numerous factual determinations involving contested issues of when the foreign national alerted the Employer that he was a foreign national who required a work permit, whether the Employer promised the foreign national that obtaining a Labour Market Opinion (“LMO“) would be easy, and whether the Employer rescinded the foreign worker’s job offer upon the LMO being rejected.

Lurking in the background of these factual disputes was the legal issue of “when does a foreign national become an employee of an employer?”

The Union argued that as a matter of contract law a person becomes an employee of an employer at the instant when he accepts an unconditional offer of employment, even if the offer contemplates that he will not actually commence work for a period of time.  The Union further argued that there was no necessity for the person hired to have actually started work in order to be considered an employee.

The Employer argued that its employment agreement with the foreign national was illegal and unenforceable by reason of the foreign worker’s lack of a valid work permit. It further argued that the foreign national could not have accepted the offer because he did not have a work permit.

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