Avoiding claims of discrimination in hiring overseas talent

When it comes to hiring talent from overseas, what exactly can an employer ask?

That question was further clarified in a recent appeal court decision, when an international student was vindicated in claiming discrimination after losing a job offer from Imperial Oil.

And it’s one employers and HR should take note of, considering the huge rise in immigration Canada has seen in recent years.

“The federal government has made it very clear: They're implementing policies to make working in Canada easier, especially for highly skilled jobs,” says Khalfan Khalfan, a partner at Stikeman Elliott in Toronto.

“So the Canadian government has every interest to ensure that employers are not being discriminatory, so that their immigration policies can ultimately be effectuated.”

Since 2010, there’s been a huge increase in immigrant workers, and many foreign nationals were not willing to challenge their employer or potential employers in court, says Stéphane Duval, partner at MT>iplus, a division of McCarthy Tétrault in Montreal..

“They were usually afraid of being kicked out of the country. There was not much litigation involving foreign nationals,” he says.

“But because the number of foreign nationals, workers, students have increased, importantly, so we will see more and more cases where foreign nationals will decide to challenge and go in court.”

Many of these immigrants are better educated and better informed of their rights, says Duval.

“Highly skilled employees will be more informed, because they're usually more educated versus people who are in the fields, working in vegetables, fruits, and so on and so forth… but still we see some complaints coming from those labourers in the fields more and more, because they receive more information, which is good, their rights must be also protected.”

From 2016 to 2021, immigrants accounted for four-fifths of labour force growth in Canada, according to Statistics Canada.

Just over 1.3 million new immigrants settled permanently, the highest number of recent immigrants recorded in a Canadian census, and of the 748,120 economic immigrants, just over one-third (34.5%) were selected through skilled worker programs.

Two Canadian lawyers recently spoke out against a new policy they say “ignores” really qualified people and “squanders” a resource that's there.

‘Permanent eligibility to work in Canada’

The recent decision involved Muhammad Haseeb, an international student in Canada about to graduate from McGill University in Montreal with a mechanical engineering degree. He would then be entitled to a Post-Graduate Work Permit (PGWP), which would allow him to work full-time, anywhere in Canada, for any employer, for up to three years.

During his last semester, Haseeb applied for an entry-level engineering job with Imperial Oil. The company had a policy that required, as a condition of employment, “permanent eligibility to work in Canada” — as established by proof of Canadian citizenship or permanent resident status — and it offered Haseeb the job.

Haseeb lied throughout the interview process, saying he was eligible for the job based on those requirements. But after being presented with an offer of employment, he disclosed that he was neither a Canadian citizen nor a permanent resident, and would have to initially work on the three-year PGWP.

As a result, Imperial withdrew its job offer.

Haseeb then claimed discrimination on the basis of citizenship, saying Imperial’s requirement disadvantaged only non-citizens. But Imperial said it did not discriminate because it had an exception for permanent residents; and the distinction was based on immigration status, not citizenship. The company also said it withdrew the job offer because of Haseeb’s dishonesty.

In 2019, the Ontario Human Rights Tribunal agreed with Haseeb, saying there was no doubt he would have been granted a PGWP shortly after graduation in January 2015 (which he was, in February 2015); Haseeb was awarded $120,360 in damages for lost income, injury to dignity, feelings and self-respect, and pre-judgement interest.

In 2021, the Divisional Court set aside that decision, finding the tribunal’s decision unreasonable because its finding of discrimination was based on permanent residency, which is not protected by the Ontario Human Rights Code.

Court of Appeal sides with tribunal on discrimination

However, in May 2023, the Court of Appeal for Ontario found the tribunal’s decision was reasonable.

“Imperial’s job posting and policy distinguished between two classes of non-Canadian citizens in circumstances where both classes are eligible to work full-time for any employer, anywhere in Canada — permanent residents (who were eligible for the position under Imperial’s policy) and PGWP-holders (who were not eligible under Imperial’s policy),” said the court.

“Imperial argues, and the Divisional Court majority found, that this was discrimination on the basis of immigration status or permanent resident status, which are not prohibited grounds under the Code. While the conclusion that permanent resident status and immigration status are not prohibited grounds of discrimination under the Code is correct as far as it goes, it fails to acknowledge that Imperial’s policy is also partial discrimination on the basis of citizenship.”

Basically, Imperial Oil was thinking it couldn’t bring someone on who didn’t have a renewable work permit or with no path to permanency, says Khalfan, but “that ultimately would be discriminatory because it could be based on their citizenship.”

“There's a subtle difference, but I think you end up in the same place... the idea is you're looking at someone's immigration status because of their citizenship. They don't have authorization to work because of their citizenship,” he says. “On your immigration paperwork, it clearly stipulates your citizenship status, and so you can infer from that that OK, you're looking at their citizenship.”

Employers looking for certainty in hiring immigrants

Someone arguably could work in Canada without permanent residency, such as an open work permit. But some of these permits are not readily renewable or easily renewable or simply cannot be renewed, says Khalfan.

“In that instance, an employer would say, ‘Sure, we're happy to take you on for the balance of your postgraduate work permit. But what are our options for renewal? Or can we pursue permanent residency so that you can work here on a go-forward?’ And if that's not available, they may be deterred from hiring them.”

Since an employer doesn’t know what will happen in one, two, three years, before the expiry date of a work permit, it would prefer to have someone who can occupy the position permanently, says Duval, who is also the national practice lead for immigration at his firm.

Nothing guarantees the foreign national will get the permit, he says — “It's always subject to a decision by an officer and always subject to meeting all the conditions of the program he applied under, and making sure that he is not medically or criminally inadmissible to the country, which is also assessed in a permanent residency application.”

For more qualified or specialized occupations, employers make a big investment to bring employees to the right position, the right level, and then to continue to employ them, says Duval.

“So, some employers might be hesitant to invest time, effort and money developing the skills of an individual if they don't know, and they're not certain, that he or she will be able to become a permanent president.”

In these types of situations, it generally doesn't come from a discriminatory place, says Khalfan.

“It's more like, ‘Hey, can we do this because it would help us from a business perspective?’ And then you ultimately say, ‘Well, no, technically you can't because it could be discriminatory.’ And I haven't had one instance in which a client's disagreed with the advice. They just operate within the confines of what's allowable under law.”

Avoiding claims of discrimination in hiring

Khalfan says employers often ask for legal advice on what’s permissible to ask in hiring.

“[They say] ‘Can I ask if they need a work permit on my job application? Or can we put that we need someone to have residency or status in Canada, in the job advertisement entities?’ and you steer them in the direction of ‘No, you can't do that, because it's prima facie discriminatory because the idea is you're eliminating people that might have a different citizenship or might be from a different place of origin.”

At the interview stage, an employer can only ask “Are you allowed to work in Canada?” says Duval.

If the person says yes, then the employer can ask about the work permit or what situation allows them to work in Canada, he says, “so then the employer can gather a little bit more information — but it's always a risk. Employers have to be careful at what stage they would ask more information or more documents.”

The only thing employers can legally ask is “Are you legally entitled to work in Canada?” says Khalfan, and employers should always ask that question during the screening process.

“After that, everyone's on equal footing once you say yes. You go through the motions on the job offer, you make the job offer conditional upon verifying they're legally entitled to work in Canada, and then you take a look at the work permit. And if they can work, great; if they can't, you obviously can't move forward — but you make the offer conditional upon having authorization to work in Canada.”

When it came to Imperial Oil, it was more about convenience and certainty than a bona fide occupational requirement.

“You don't need to be a permanent resident or you don't need to be a citizen of Canada to carry out the job,” he says. “Companies need to understand that, notwithstanding your business needs, there's an overarching legislative regime that you need to operate within. And Ontario and Canada generally are very pro-employee and supporting non-discriminatory practices.”

In the same vein, employers should only ask for a SIN number for payroll purposes, after they’ve hired someone. Then, if the number starts with a nine, it indicates they are a temporary foreign worker, so you could ask for proof of their authorization to work in Canada, says Khalfan — but not before the hire to avoid claims of discrimination.