What You Should Know Before Terminating a Temporary Foreign Worker

When terminating an employee, most employers treat identical employees the same. However, if the employee being terminated is a temporary foreign worker, an employer may be held to a higher standard. Why? Because courts have found that temporary foreign workers may be more vulnerable than Canadian citizens and permanent resident employees.

How are temporary foreign workers more vulnerable?

Temporary foreign workers face restrictions on work – this is the main factor that distinguishes a temporary foreign worker from a Canadian citizen or Canadian permanent resident employee. When Canadian citizens or Canadian permanent residents lose their jobs, they do not lose their right to live in Canada and can take on new jobs in Canada immediately after losing their old jobs.

Temporary foreign workers, on the other hand, face a different reality. Most temporary foreign workers have work permits that restrict them to work in a specific occupation, for a specific employer, at specific location, for a finite period of time. Temporary foreign workers who lose their jobs can face significant barriers on getting permission to work for new employers. For temporary foreign workers who wish to move to Canada permanently, termination of employment can make it difficult or impossible to complete this process.

Back in 1996 the B.C. Court of Appeal found that an employer owed a fiduciary duty to an employee who was terminated.

In this case, the court found that the temporary foreign worker had a particular vulnerability which gave significant power and discretion to the employer over her legal and practical interests. The employer had essentially “taken over her affairs” and exercised complete control over her immigration status. The court accepted that the temporary foreign worker had a “reasonable expectation” that in all circumstances the employer would act in her best interests in respect of the matters in issue.

The significance of a finding of a breach of fiduciary duty is that it opened the employer to be found liable for punitive damages far in excess of compensating an employee for wages.

In Nishina v. Azuma Foods (Canada) Co., Ltd. the court took notice of the fact that the employee’s immigration status in Canada was tied specifically to the employer.

In this case, the court stated that the circumstance was “almost akin to the situation where an employee is dismissed in a one-employer town” and was concerned that an employer will generally be aware of this fact and may take advantage of it. In this case, a longer notice period was ordered to take account of this unique vulnerability. The court awarded the employee 12 months’ pay in lieu of notice – despite the fact that she had only been employed with the company for a total of six years and had been terminated for cause, allegedly due to insubordinate behaviour.

In Dominguez v. Northland Properties Corporation the court certified the first class action to address the claims of temporary foreign workers who contended that a Canadian employer was liable for breaches of obligations or duties to them.

The argument raised was that the temporary foreign workers were in a vulnerable position given their employment and immigration status, and that the employers took advantage of that status for their own benefit by ignoring various contractual terms on a systemic basis.

It was alleged that the employer owed a fiduciary duty to the temporary foreign workers, and that the employer had been unjustly enriched by failing to pay the workers adequately. While a settlement was ultimately reached and approved in 2013, the fact that certification was approved means these are real issues for employers of temporary foreign workers.

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.