This post was written prior to our January 2017 merger, under our previous firm name, Aikins, MacAulay & Thorvaldson LLP.
In 1988, Canada signed the Canada-U.S. Free Trade Agreement which, among other things, created a category that allowed certain U.S. citizen employees of companies with operations in both Canada and the U.S. to transfer to Canada for employment purposes.
The creation of this category was significant in that it did away with requirement that the Canadian employer first prove that there were no willing or qualified Canadians/ permanent residents for the vacant position. Over the years, this category has been expanded and now applies to all foreign nationals. It remains an important human resource tool for multinational corporations who seek to fill Canadian positions with already trained employees from abroad.
How does a person qualify as an intra-company transferee?
In order to qualify as an intra-company transferee, the following questions must be answered in the affirmative:
- Does an intra-company relationship exist between the Canadian and foreign company?
- Is the Canadian company a legitimate and continuing establishment?
- Will the employee be taking a position in the Canadian company?
- Does the employee meet the definition of an executive, manager or specialized knowledge employee?
- Has the employee worked in a similar position abroad for at least one year in the last three years?
- Is the employee coming for a temporary period only?
- Is the employee not “inadmissible” to Canada?
Does an intra-company relationship exist between the Canadian and foreign company?
In order to qualify as an intra-company transferee, a qualifying relationship must exist between the foreign and Canadian employers. In general, a parent-subsidiary, branch or affiliate relationship must exist between the Canadian company and the company abroad. In addition, properly structured joint ventures can also qualify.
Is the Canadian company a legitimate and continuing establishment?
If the company has been in existence for at least 18 months, it is usually easy to establish that the company is legitimate and continuing. This being said, there are special provisions for companies that are just being established as well as companies who have recently undergone a merger or acquisition.
In addition to a company’s length of operations, it is also necessary to establish that the Canadian and the foreign companies will continue “doing business” in both countries for the duration of the employee’s transfer. If either the Canadian or foreign company close their operations during the period of time the employee is in Canada, the intra-company relationship would cease to exist.
Will the employee be taking a position in the Canadian company?
To qualify for this status, the employee must take on a position within the Canadian company. The Canadian employer must have the right to order and control the work of the employee.
This being said, there is no requirement that the employee work full-time in Canada for a transfer to be approved. It is permissible, for the employee to divide his or her time between Canada and another country for work. As well, there is no requirement that the source of the employee’s remuneration be the Canadian company. The foreign company can continue to pay the salary or wage.
Does the employee meet the definition of an executive, manager or specialized knowledge employee?
In order to qualify as an intra-company transferee, the employee must take on an executive, managerial, or specialized knowledge position in Canada.
In order to be considered an executive, the employee must:
- direct the management of the organization or a major component or function of the organization;
- establish the goals and policies of the organization, or a component, or function of the organization;
- exercise wide latitude in discretionary decision-making; and
- receive only general supervision or direction from higher level executives, the board of directors, or stockholders of the organization.
In order to be considered a manager, the employee must:
- manage the organization, a department, subdivision, function, or component of the organization;
- supervise and control the work of: other managers or supervisors; professional employees, or, if the employee does not manage any personnel, manage an essential function within the organization, or a department or subdivision of the organization.
- have the authority to hire and fire, or recommend these and other personnel actions, such as promotion and leave authorization or if no other employee is directly supervised, function at a senior level within the organization hierarchy or with respect to the function managed; and,
- exercise discretion over the day-to-day operations of the activity or function for which the employee has the authority.
In order to be considered a specialized knowledge worker, the employee must demonstrate:
- specialized knowledge of the company’s product or service and its application in international markets, or
- an advanced level of knowledge or expertise in the organization’s processes and procedures (product, process and service can include research, equipment, techniques, management, or other interests).
Has the employee worked in a similar position abroad for at least one year in the last three years?
Not all employees of multinational companies qualify as intra-company transferees. In order to qualify, an employee must have been employed by the foreign company in a similar position and on a full-time basis for at least one year in the three years immediately preceding the date of the application. The exception to this rule are Peruvian citizens and permanent residents who, under the Canada-Peru Free Trade Agreement, need only to establish six months of full-time work.
It is important to note that this requirement does not mean that the employee must be a current employee. Former employees, as long as they have the 1 year of full-time work experience with the transferring company in the last 3 years, can qualify.
Is the employee coming for a temporary period only?
In most cases, initial work permits can be granted for periods of three years. Executives and managers are eligible for two extensions of two years. Specialized knowledge workers are only eligible for one two-year extension.
Once a person reaches their maximum work permit duration of seven or five years, the individual must complete one year of full-time employment in the foreign company outside of Canada should they wish to reapply as an intra-company transferee.
Is the employee not “inadmissible” to Canada?
In addition to the company and employee being eligible under the intra-company transfer category, it is essential that the employee not be “inadmissible.” The most common grounds of inadmissibility include having a criminal records or a serious medical condition that would prevent entry to Canada.
Select Issues for Intra-Company Transferees
It is important to note that the intra-company transfer category does not apply to all employees of multinational companies. In addition to not applying to new hires, many employees in an organization will not qualify for this status on the basis of their job duties. Some of the more common questions in intra-company transfer matters are as follows.
Are trades people and labourers “specialized knowledge” workers?
One challenging aspect of intra-company transfers are trades people and labourers performing hands-on construction or similar work.
Generally, these types of workers are not viewed as specialized knowledge workers. While there are occasions where individuals holding these positions could classify as a specialized knowledge workers, these applications can be challenging.
Amongst other things, immigration officials will look closely at the skill level needed for the position to determine whether they deem that the knowledge is sufficiently “specialized”. While an individual only needs to be working in the company for one year to qualify for intra-company transfer status, officers have some times looked at the level of experience and have determined that even though an individual may have the one year or even more of experience, the knowledge they have accumulated is not specialized.
Does the salary or wage paid matter when assessing an intra-company transferee?
While there is no official wage test for intra-company transferees, officers have been instructed to look at the wages offered to the individuals entering Canada to determine if the wage levels are realistic. If wage levels are significantly lower than what would normally be offered in Canada, companies can expect to be challenged on these types of work permits.
Does the level of education needed for the job matter?
While there is no official education test for intra-company transferees, if the knowledge obtained for specialized knowledge workers can be obtained over a short period of time of in-house or on-the-job training, the likelihood that immigration officers will find the work not to be specialized increases.
If, on the other hand, the employee’s knowledge comes from a series of progressively more complex training that may be combined with hands-on experience, the chances of finding specialized knowledge increases.
Does the availability of Canadian workers make a difference?
While intra-company transferees are exempt from any labour market test, it is also useful for specialized knowledge employees to show the need for them as specifically trained employees. If it can be shown that the expertise the employee will be bringing to Canada cannot be easily sourced within a reasonable period of time or at a reasonable cost from within Canada, the chances of success increase.
Are all managers eligible to be intra-company transferees?
No. Junior managers, for instance, are not managers for the purposes of the intra-company transfer. As well, first line supervisors are not considered to be managers unless the employees being supervised are professionals.
How important are the job duties of the position as opposed to the job title?
In assessing whether a person is will be classified as an executive, manager or specialized knowledge worker, the job duties are more important than the job title.
Officers recognize that different employers have different job titles for various functions. As a result, officers often compare a company’s job description with similar job descriptions found in Canada’s National Occupational Classification. The National Occupational Classification is a Government of Canada reference on occupations in Canada that consists of over 30,000 job titles.
Whether a person will be considered to be an executive, manager or specialized knowledge worker depends on which National Occupational Classification code his or her job description fits.
This article was originally published by World Services Group.
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.
Reis Pagtakhan practises immigration and corporate and commercial law at Aikins.