The recent trouble at the operations of XL Foods raises an important question.  What do employers do when something unexpected occurs and they must terminate the employment of a foreign employee either temporarily or permanently?

The shutdown at XL Foods is a typical case of unforeseen circumstances leaving employers in an awkward positions vis-à-vis their foreign workers.  While an employer may have full intention to employ a foreign employee while in Canada, circumstances may dictate otherwise. 

In this case, XL Foods was forced to initially lay off hundreds of employees and continues to operate with significantly reduced staff levels.  This has meant that the company has been unable to employ many foreign workers who were in all likelihood brought specifically to Canada to work at the company.

What are an employer’s obligations in these circumstances?

On initial glance an employer’s obligation to a foreign employee appears the same as to a Canadian or a permanent resident.  This is because employees working in Canada benefit from the same employment protections regardless of whether they are temporary foreign workers, permanent residents or Canadians.

A closer look however reveals an important difference between foreign workers and local hires. Specifically, courts are becoming increasingly sensitive to the unique challenges often faced by temporary foreign workers. Specifically, most foreign workers are subject to employer-specific work permits, meaning that the permit only allows them to work with the employer which sponsored their entry to Canada.

If a foreign worker subsequently wishes to work with another employer, they must be granted either a new employer-specific permit or an open work permit which is not subject to any restrictions. Securing either permit can be a significant challenge as it requires the foreigner to find another employer who is willing to sponsor them and to subsequently gain approval from two Federal agencies, Human Resources and Skills Development Canada (“HRSDC”) and Citizenship and Immigration Canada (“CIC”). Gaining such an approval requires the new employer to demonstrate that no Canadian or permanent resident of Canada is readily available to fill the role that the foreigner is scheduled to take.

These regulatory hurdles can make it exponentially harder for foreign workers to transition to alternate employment than for Canadians or permanent residents.

Courts are becoming increasingly sensitive to these challenges and appear increasingly willing to provide foreign workers with significantly higher compensation on termination as compared to terminated employees who are Canadians or permanent residents.

Employers should accordingly remain aware of the potentially greater liability towards foreign workers. Specifically, advanced planning and thoughtful policy design can help to reduce such costs and improve predictability during times of uncertainty.