Immigration and employment law: important connections, 19 Employment Law Bulletin No. 3 at 1-2.

There are important peripheral issues to business immigration, quite separate from those pertaining to gaining admission to Canada. Employment law implications for corporate employers seeking to hire from abroad can be significant and are often overlooked.

In Canada, the Immigration and Refugee Protection Act requires, in many instances, a foreign national, engaged by a Canadian employer to perform an activity for which remuneration is paid, in order to obtain a work permit. Work permits are issued to a specific employer for a limited term, based on a positive labour market opinion, from the Human Resources and Skills Development Canada. Corporate employers and sophisticated foreign employees, including those who obtained appropriate legal advice may be able to use this immigration requirement as either shield or sword, in wrongful dismissal litigation.

Corporate employers who bring foreign employees to Canada, may substantially reduce potential litigation and ensuing losses, if their immigration advisors cooperate with employment lawyers to address statutory and common law employment issues, before the employee begins working in Canada. The following, is a general overview of a few key considerations, that may be overlooked by corporate employers:

1) Recruitment

Recruitment of skilled foreign employees is often carried out with the assistance of recruiters or headhunters. Recruiters’ overstatements about the virtues of a job in Canada, may give rise to a cause of action against an employer, based on negligent representations and/or inducements made to a foreign national by the recruiter. To shield themselves from potential liability, employers must pay particular attention to the individuals with whom the foreign national comes into contact during the recruitment process. Such individuals should be instructed, by way of agreement, on the nature and limitation of their representations to employment candidates. In a further attempt to minimize their liability, employers may wish to include a financial indemnity clause, as part of the recruiter’s agreement, to protect the employer from litigation and the damages that may be assessed, as a result of the recruiter being seen as an agent of the ultimate employer.

2) Engagement

There is a tendency in Canada, to hire employees on the basis of an informal hiring letter. When hiring from abroad, corporate employers should resist this tendency. When offering employment, employers will want to ensure that an offer of employment is contingent upon the employee’s ability to obtain a work permit, to renew the permit and to continue to work in Canada legally. For senior management employees or professionals, particularly leaving secure employment in their home country, additional protections may be required. These matters can be negotiated with the employee and should be addressed in the initial hiring letter, and subsequently spelled out in an employment contract.

3) Employment Contract

A well-drafted employment contract by an experienced employment lawyer, will substantially reduce potential litigation. The employment contract can be drafted to: (1) limit employers’ liability with respect to pre-transfer or pre-employment representations; (2) include termination provisions, limiting the employer’s liability to a set amount of compensation or notice, which will be provided in the event of a “without cause” termination; (3) limit accrual of employees’ seniority. Such provisos are particularly helpful in cases of senior management employees, seconded to Canada from the U.S.; (4) specify, that the employer reserves the right to dismiss the employee, for any reason, in its sole discretion during a probationary period, and spell out financial consequences of a failure in the relationship, during the statutory probation period; (5) limit the duration or length of the employment relationship and spell out that the employment is not permanent, because of work permit related restrictions; (6) include a “jurisdiction” proviso, to ensure that the law of most favourable jurisdiction is applicable on termination; (7) insert a binding arbitration proviso, as a means of avoiding post-employment litigation; (8) set out limits of the employer’s involvement in, or financial assistance, with regard to Federal Court litigation, should Citizenship and Immigration Canada refuse to renew the employee’s work permit; and (9) spell out consequences, be it repayment of relocation costs, travel expenses or immigration costs, in the event of the employee’s early: (a) repatriation to his or her country; (b) resignation; or (c) dismissal.
If provisions are drafted fairly and the contract is presented to the employee in advance of employment, it will clarify key issues and protect both the employer and employees’ rights, if disagreements arise in the future.

4) Relocation Policies

Corporate employers that frequently employ foreign nationals, especially from NAFTA countries, should ensure that they have relocation policies in place, which may include: (1) the number of trips to Canada that the foreign employee and his or her spouse will be entitled to make, prior to being relocated; (2) the various relocation costs, travel expenses, per diems, accommodation costs, and their limits, which will be covered by the employer; (3) time-frame for the employee’s repatriation; (4) eligibility for outplacement counseling, if applicable; (5) eligibility for compensation for losses, if any incurred, on the sale of house or early termination of a lease; and (6) pre-OHIP and post-OHIP insurance and benefit coverage. This proviso is of particular importance, because in Ontario, foreign workers become eligible for OHIP coverage after three months of residence.

5) Human Rights

Every Canadian jurisdiction has human rights legislation in place, which prohibits workplace discrimination on a number of different grounds. As well, employers are required to offer reasonable accommodation to employees with disabilities. A wide range of the pre-employment questions and post-employment requests are prohibited. Importantly, inadequate contractual provisions and infringements of human rights now may be included, as part of wrongful dismissal litigation, against corporate defendants.

6) Mitigation

Should a foreign employee sue an employer for wrongful dismissal, he or she will be subject to the duty to mitigate their damage. Traditionally, this rule requires an employee to make reasonable efforts to find suitable, alternate employment. However, in the case of a foreign national, whose employment is restricted by the work permit issued to a specific employer, his or her ability to mitigate damage is significantly reduced, while the employer’s exposure to liability, is significantly increased. Corporate employers relocating employees to Canada must have employment law strategies and appropriate mechanisms in place, in order to effectively deal with issues surrounding the foreign national’s claims based on the inability to mitigate his or her damages.

There are many employment law issues that prudent corporate employers should consider and implement, prior to hiring a foreign national. If they are overlooked, or ignored, employers could face substantial liability. Given the recognized power imbalance between an employer and employee, courts are reluctant to deny employee access to the statutory and common law benefits available after dismissal. When drafted properly and presented to an employment candidate for review prior to commencement of employment, a well-written employment contract, is an effective tool to fend off potential claims by aggrieved employees.