Canadian Employment Law Today

Canadian HR Reporter, 2020 4 Business visitors or foreign workers? The blurry line in Canadian immigration law BY SERGIO KARAS W hen a Canadian employer hires someone from another country or transfers them from an interna- tional office to come to Canada, the worker may be authorized to work in Canada with- out a permit or may be required to obtain one. Without determining the worker's situ- ation, there's a risk the worker could be pre- vented from working or expelled from the country. The first step in determining whether a work permit is needed is to consider the nature of the activities to be performed by the foreign worker. "Work" is defined in the regulations as an activity for which wages or commission are earned or that competes directly with Ca- nadian citizens or permanent residents in the labour market. If a foreign worker performs an activity that will result in receiving remuneration, they will be engaging in work. This includes salary or wages, commissions, receipts for fulfilling a service contract or any other situation where foreign nationals receive payments for the performance of services. Even if the foreign worker does not receive remuneration, the activities performed may still constitute work if there appears to be an element of competition with the local labour force. To determine which activities could be con- sidered work, the employer should consider the following questions: • Will the foreign worker be doing some- thing a Canadian or permanent resident should have the opportunity to do? • Will the foreign worker be engaging in a business activity that is competitive in the marketplace? The answer to these questions is not always obvious. Some examples of work include: • Technical personnel coming to Canada to repair machinery or equipment, even if they are paid outside of Canada by the third-party contractor. • A foreigner who intends to engage in self- employment, either directly or by receiving commissions or payment for services. On the other hand, the following activities are not considered to be work: • Volunteer work for which a person would not normally be paid, such as activities for charitable or religious institutions. • Helping a friend or family member with housework or childcare in the home. • Attending meetings on behalf of a foreign employer to discuss products and services or take orders and specifications for a manufac- turer abroad. The Federal Court defined what work was in Juneja v. Canada, where the worker entered Canada with a study permit, which prohibit- ed his employment unless authorized. He was found to be working at an automobile deal- ership in Edmonton, subsequently declared inadmissible to Canada and ordered to leave the country. The worker did not dispute that he didn't have a work permit, but he contend- ed that his activity did not constitute work because he was not being paid for it, and he was only keeping track of his time in case he received the authorization to work in Canada. The evidence showed that the employer had agreed to pay him $8 per hour retroactively for the time he had spent performing his services at the dealership should he receive his work permit. The Federal Court entertained the question of whether a contingent arrangement to pay a wage for work performed meets the legal defi- nition of work and found the worker had an expectation of future payment and the dealer- ship had at least a conditional, and perhaps an absolute, legal obligation to pay for the work he performed. This activity was of a char- acter for which wages are paid or anticipated. The court further held that, even if the work- er was correct in arguing that the definition of work sets an absolute standard not fulfilled by a conditional arrangement for payment, his conduct was still caught by the second part of the definition — the performance of an activ- ity in direct competition with the activities of Canadians and permanent residents in the la- bour market. His employment directly com- peted with others who were legally entitled to work in Canada, whether a wage was paid or not. The court rejected his contention that the second part of the definition of work applied only to self-employed persons and held that the definition contains no such qualification. Further, the court also referred to the regu- latory impact analysis statement published with the regulations in the Citizenship and Immigration Department guidelines, indicat- ing the definition of work included unpaid employment undertaken for the purposes of obtaining work experience, such as an intern- ship or practicum normally done by a student. In contrast, in Ozawa v. Canada (Minister of Citizenship and Immigration), the worker was a hair stylist who was also a shareholder and director of a hair salon incorporated in British Columbia. He came to Canada on a working holiday visa and overstayed his permit twice, but he was granted restoration on both oc- casions. He returned to Canada on a visitor visa and was found working at the hair salon without authorization. An inadmissibility re- port was issued against him. He left Canada voluntarily and applied for a work permit, which was refused because he had overstayed his previous permits twice. The court held that since Ozawa was granted restoration for his working holiday permit, it had the legal effect of curing any previous breach. The court ruled that the case was distin- guishable from Juneja, in which there was a contingent wage agreement that was absent in Ozawa. It was not clear whether the worker was an employee, but it was clear that he was a shareholder and a director. The court held that the definition of work did not capture the normal activities of shareholders or directors, where they are not paid wages or commissions for these activities. It further ruled that as soon as a shareholder or director provides services to the corporation, those activities are outside the normal role of a shareholder or director and the person will fall under the second part of the definition of work — they will be in di- rect competition with Canadian citizens and permanent residents. The Federal Court had to consider where the line between visit and work is crossed in Petinglay v. Canada (Public Safety and Emer- gency Preparedness). The worker came to Can- CASE IN POINT: IMMIGRATION An element of competition with the local labour force may constitute work. Canada's Immigration and Refugee Protection Act (IRPA) and its regulations have been in effect since 2002 and provide more flexibility to hire foreign workers than previous immigration legislation. However, employers should plan carefully when considering international relocations to avoid the pitfalls that may lead to a violation of the immigration legislation, including misunderstanding the difference between a simple business visit and performing work in Canada. BACKGROUND

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