Terminating foreign workers on work permits (Legal view)

Foreign workers are entitled to the same termination rights as domestic employees, but there are other considerations

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

Every province 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 that dismiss foreign workers must abide by the same notice provisions applicable to Canadian workers. Alberta 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 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 the country until his work permit expires. 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.

Employers that 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 that dismisses a low-skilled foreign worker will still be contractually bound to pay the travel expenses for the employee to return home.

Foreign workers laid off first

Over the past couple of years, Service Canada has included specific layoff instructions for employers when approving LMO confirmations. Generally speaking, if an employer is forced to lay off employees in the same job category, the foreign workers should be dismissed before any Canadians or permanent residents are dismissed. Employers should be sure to check any LMO approvals received from Service Canada to ensure compliance 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.

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

EI benefits

Canadian employment insurance benefits can be collected by foreign workers who are dismissed by their Canadian employers and remain temporarily in Canada seeking new employment. In order to qualify, an 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 that 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. Depending on how far along the employee is in the nomination process, the unfortunate result could mean the foreign worker is no longer eligible for permanent residence as a provincial nominee.

The termination of a temporary foreign worker’s employment contract may also affect eligibility for permanent residence for individuals who have had their provincial nomination approval forwarded to a Canadian consulate for final processing. 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), it is likely the application for permanent residence will proceed, but it is at the discretion of the consular officer.

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

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