This post was written prior to our January 2017 merger, under our previous firm name, Aikins, MacAulay & Thorvaldson LLP.
When a company is part of a merger or acquisition, certain temporary foreign workers (TFWs) who work for the company may see their legal entitlement to work in Canada cease after the transaction concludes. A TFW is a non-Canadian/non-Canadian permanent resident working in Canada with a work permit.
Careful planning is essential to ensure that TFWs can continue to work in Canada after a transaction concludes. The two main types of workers affected by these transactions are intra-company transferees and TFWs working pursuant to labour market opinions.
How does a merger or acquisition affect intra-company transferees?
Under immigration law, executive, managerial and specialized knowledge employees of foreign parent, subsidiary, affiliate or branch operations can work in Canada as long as a cross-border intra-company relationship exists.
In some merger and acquisition transactions, a Canadian company will purchase a foreign company’s Canadian subsidiary. Upon the conclusion of the transaction, a cross-border intra-company relationship would cease to exist. In these cases, a TFW would cease to be an intra-company transferee and would lose his or her right to work in Canada in this category.
How does a merger or acquisition affect a temporary foreign worker working under a Labour Market Opinion?
A Labour Market Opinion is an opinion provided by the government of Canada that allows a company to hire TFW. In most of these cases, employers must show that no qualified Canadians/permanent residents were willing and able to take the job. In a merger or acquisition, problems can exist if the new employer is not a “successor in interest”.
A “successor in interest” is a company that substantially assumes the interests, obligations, assets and liabilities from the original owner and continues to operate the same type of business as the original owner. If some assets or liabilities are not assumed, a “successor in interest” relationship may not exist. In these cases, TFWs will not be able to work for the new employer.
In all merger and acquisition transactions where TFWs are involved, a close investigation of the assets and liabilities purchased will have to be reviewed.
Applying for new work permits in a merger or acquisition scenario
Once the structure of a merger and acquisition is determined, an appropriate immigration classification will have to be found to see if a TFW can work in Canada after the transaction concludes. If no classification exists, the TFW will not be allowed to work for the merged or acquired company.
Even if the TFW is allowed to work for the merged or acquired company, where there is a business or corporate name change, Citizenship and Immigration Canada recommends that new work permits be applied for by all TFWs within 90 days. This is recommended to avoid any confusion as to who the legal employer is subsequent to a name change.
Note: This article is of a general nature only and is not exhaustive of all possible legal rights or remedies. In addition, laws may change over time and should be interpreted only in the context of particular circumstances such that these materials are not intended to be relied upon or taken as legal advice or opinion. Readers should consult a legal professional for specific advice in any particular situation.
This article was originally published in Immigration Law News, June 2011 issue. Reis Pagtakhan is an immigration lawyer at Aikins. To sign up, contact Reis at email@example.com.