Foreign workers often the first to go

Foreign workers are entitled to termination rights but other considerations come into play as well

On the cutting block in tough times

Many employers are faced with the prospect of cutting their workforce to meet reduced budgets during the current economic crisis. The situation is a little more complicated for employers who, during better times, met their labour needs by recruiting foreign workers.

When times call for staff cuts, foreign workers are often the first to be on the chopping block, and the agreements some have with the government and the employer specify this condition. However, the employment of foreign workers involves travel, work permits, residency status and other considerations which can all come into play when it comes time to let them go.

Business immigration lawyer Evelyn Ackah discusses the factors that come into play with foreign workers, the rights of those workers and the obligations of employers who terminate them.

During times of economic growth, Canadian employers have actively recruited foreign workers to assume temporary or permanent employment in Canada. However, with the recent economic downturn, many Canadian employers are now faced with the unfortunate task of cutting costs and reducing personnel. While employer obligations with respect to the dismissal of Canadian employees are well-established, what obligations are imposed on Canadian employers with respect to the foreign workers they have recruited and relocated to Canada?

Employers' obligations to foreign workers upon termination

Every province across Canada has legislation that governs the termination process and ensures human rights are protected. In Alberta, for example, the Employment Standards Code governs the relationship between employers and employees, including temporary foreign workers. Employers who dismiss foreign workers must abide by the same notice provisions that are applicable to Canadian workers. They must also not run afoul of human rights legislation. In Alberta, for example, employers must also abide by the Human Rights, Citizenship and Multiculturalism Act, which prohibits employers from discriminating against any employee.

When dismissing foreign workers, employers must abide by employment legislation and provide them with adequate notice or payment in lieu of notice. When a temporary foreign worker is dismissed by a Canadian employer, he is eligible to remain in Canada until the expiration date of his current work permit. However, the foreign worker cannot work for another Canadian employer without first obtaining a new work permit — either by way of Labour Market Opinion (LMO) approval from Service Canada or an exemption category under the Immigration and Refugee Protection Act.

Unlike with skilled workers, employers who enter into employment contracts with low-skilled workers pursuant to the Service Canada Low-Skilled Worker Program are contractually obligated to pay for the employee's travel to and from Canada. Therefore, an employer who dismisses a low-skilled foreign worker will still be contractually bound to pay the travel expenses for the employee to return to his country of origin.

Foreign workers on permits laid off first

Over the past couple of years, Service Canada has included specific layoff instructions for employers when approving LMO confirmations. Generally speaking, these instructions require that if the employer is forced to lay off employees in the same job category, the foreign workers in that job category should be dismissed before any Canadians or permanent residents of Canada are dismissed. Employers should be sure to check any LMO approvals they have received from Service Canada to ensure they comply with these instructions. Although Service Canada has no direct recourse if an employer chooses to disobey the layoff instructions, it will certainly make it more challenging to obtain future LMO approvals once the economy rebounds and the need for foreign workers increases again.

If an employer dismisses a foreign worker, it should notify Canadian Immigration and Citizenship of the termination in order to ensure there is no possibility of misuse or fraud of the Canadian work permit held by the foreign worker.

Employment insurance benefits

Canadian employment insurance benefits may be collected by foreign workers who are dismissed by their Canadian employers and remain temporarily in Canada seeking new employment. In order to qualify, the employee must be unemployed, have a valid work permit and meet eligibility criteria, such as minimum hours worked.

Effect of dismissal on permanent resident status

Employers who nominate foreign workers for permanent residence status through a provincial nomination program (PNP) have an obligation to notify the PNP office of the change in employment status of the worker. Depending on how far along the employee is in the nomination process, the unfortunate result could be that the foreign worker would no longer be eligible for permanent residence as a provincial nominee.

The termination of the temporary foreign worker’s employment contract may or may not affect eligibility for permanent residence for those temporary foreign workers who have had their provincial nomination approval forwarded to a Canadian consulate for final processing. Depending at what point the consulate is processing the application when the dismissal occurs, the consulate will review each case individually and decide how to proceed. Generally, if the applicant would have qualified anyway for permanent residence as a skilled worker (without the nomination), then it is likely the application for permanent residence will proceed, but it is at the discretion of the consular officer.

Temporary foreign workers with at least two years of full-time (or equivalent) skilled work experience in Canada can apply for permanent residence through the new Canadian Experience Class. Presumably, a temporary foreign worker whose employment contract has been terminated can still apply for permanent residence through this class, provided he meets the eligibility requirements, and applies within one year of leaving his Canadian employment. There is no obligation on the part of the employer to inform CIC or the Canadian consulate of a change in employment status of the temporary foreign worker but it is recommended.

Evelyn Ackah is a partner at Fraser Milner Casgrain’s Calgary office, the head of its business immigration law practice group and a member of its employment and labour group. She can be reached at (403) 268-7057 or [email protected]


Labour Market Opinions

The following is Citizenship and Immigration Canada’s description of the requirements for employers in obtaining a Labour Market Opinion for temporary foreign workers:

In most cases, employers who wish to hire temporary foreign workers must first apply to Service Canada for a Labour Market Opinion. The opinion assesses the impact the foreign worker would have on Canada’s labour market or, in other words, how the offer of employment would likely affect Canadian jobs.

An employer needs a positive Labour Market Opinion to hire a temporary foreign worker. The foreign worker needs a copy of the positive Labour Market Opinion in order to apply to Citizenship and Immigration Canada for a work permit.

People in the following categories need a work permit but do not need a Labour Market Opinion:

•Workers covered under international agreements.

•Entrepreneurs and intra-company transferees.

•Participants in exchange programs.

•Co-op students.


•Academics and students.

•Religious workers.

•Certain people who need to support themselves while they are in Canada for other reasons, such as the refugee determination process.

Source: Citizenship and Immigration Canada

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