Canadian HR Reporter

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Court sides with employer in dispute over foreign worker wage calculations Confusion around what data to use in calculating prevailing wages The federal government's changes to the Temporary Foreign Worker Program and Labour Market Impact Assessment have kept employers employing foreign work- ers busy. Between getting up to speed on the changes and changing practices to meet the new legal demands, it's not un- common for employers to be confused over some of the new requirements. Employers familiar with the La- bour Market Impact Assessment (LMIA) process are aware that in order for an application to be suc- cessful when requesting autho- rization to hire a foreign worker, one of the criteria that must be met is the requirement to pay the prevailing wage for the position being off ered. However, the Im- migration and Refugee Protection Act (IRPA) and Immigration and Refugee Protection Regulations (IRPR) do not specifi cally defi ne how that prevailing wage, which varies from region to region, must be calculated. The confusion can increase when the offi cers doing the assess- ments aren't consistent on some of the requirements — as seen when one employer's application became problematic. In Paturel International Co. v. Canada (Minister of Employment and Social Development, the Fed- eral Court decided the prevailing wage had been set too high and the Temporary Foreign Worker Program (TFWP) offi cer commit- ted a reviewable error by relying purely on data relating to median wages in the geographical area where the employer was located, which were not representative of wages in the region. Paturel operated a lobster pro- cessing plant in Deer Island, N.B., under the name East Coast Sea- food. It employed a number of for- eign workers and wished to renew their work permits so it submitted the relevant LMIA applications to obtain the necessary approvals, which were a prerequisite for the renewal of the work permits. When adjudicating an LMIA application, a TFWP offi cer must consider whether the employ- ment of a foreign national would have a neutral or positive eff ect on the Canadian labour market, including whether the wages are consistent with the prevailing wage rate for the occupation. e prevailing wage is determined with reference to the median wage published online by the federal government's National Employ- ment Service. Wage data derives primarily from Statistics Canada's Labour Force Survey, but other sources may also be considered, including employment insurance (EI) data. In 2013, the prevailing wage in the area was based on provincial information. However, in 2014 regional EI fi gures were used in- stead, which narrowed the geo- graphical scope. According to the EI wage reports, fi sh processing workers had earned between $10 and $57 per hour and the median wage was calculated at $13.79 based on 590 employees report- ing. e average wage was $14.51. e offi cer relied on the median wage for the occupation. is rep- resented an increase of more than 20 per cent from the earlier pro- vincial fi gures of $11.25 per hour. Paturel was the largest employer of shellfi sh workers in the region and none of its employees earned a wage as high as that established as the median wage for the occu- pation. e median wage in the province was $11.33 per hour, and job postings in the region of- fered between $11.49 and $12.43 per hour. Median wages in two regions adjacent to Paturel's loca- tion, where its competitors oper- ated, were $11.09 and $11.20. e minister argued it was not unreasonable for the offi cer to rely on the median wage calculated with reference to EI data, given that other sources of information were unavailable or unreliable at the time. e court disagreed and held that while the offi cer had broad discretion to rely on data he considered to be most repre- sentative of the prevailing wage in the region, his sole reliance on EI data amounted to a fettering of his discretion and it was therefore unreasonable, as supported by the Federal Court of Appeal in Stemi- jon Investments Ltd v. Canada. The court also decided that while the IRPR do not specify how a prevailing wage should be calculated and the minister has wide discretion, the IRPR do not stipulate that a failure to meet the prevailing wage, taken alone, would be suffi cient reason to re- fuse an LMIA application. ere are other factors that must also be considered to answer the broader question of whether a foreign national would have a neutral or positive eff ect on the Canadian la- bour market. In fact, in this case, the offi cer considered those fac- tors and determined the majority of them had a positive eff ect in that: the employment resulted in direct job retention for Canadian citizens or permanent residents; it was likely to fi ll a labour shortage; and it was necessary as demon- strated by the employer's unsuc- cessful eff orts to recruit within Canada. Notwithstanding these positive fi ndings, the offi cer relied only on the employer's failure to meet the prevailing wage without address- ing how all the factors, taken to- gether, impacted the Canadian labour market. The court further held that while the offi cer could consider EI data in the calculation of the pre- vailing wage, it was unreasonable to rely on that data because the diff erence between the 2013 and 2014 median wages showed a large disparity. is should have caused the offi cer to consider whether the EI data was a reliable indicator. An increase of over 20 per cent should have cast doubt on the suitability of EI data, especially since there were no changes in the circumstances of the region other than the methodology by which the prevailing wage was calculated. erefore, the court held it was improper for the offi cer to deny the employer's application based on faulty data. Moreover, the court called the prevailing wage calculation "an arbitrary standard that had not previously been applied, and seemed inconsistent with other available information." It held that the offi cer did not have due regard for the overall criteria for approval of the LMIA and relied only on the EI data. e court held that the LMIA refusal was unreasonable, quashed the offi cer's decision and remitted the application back for another offi cer to reconsider. Employers fi ling LMIA appli- cations are familiar with the lack of uniformity in decision-making and the sometimes arbitrary and capricious way offi cers interpret regulations and guidelines. Employers must be prepared to justify wages based on labour market conditions for a specifi c position in their region, and with reference to their own workforce and that of their competitors. For more information see: •Paturel International Co. v. Canada (Minister of Employ- ment and Social Develop- ment), 2016 CarswellNat 1669 (F.C.). •Stemijon Investments Ltd. v. Canada (Attorney General), 2011 CarswellNat 4372 (F.C.A.). Sergio R. Karas, principal of Karas Immig ration Law Professional Corporation in Toronto, is a certifi ed specialist in Canadian citizenship and immigration law. He can be reached at (416) 506-1800 or karas@ karas.ca. The federal government's changes to the Temporary Foreign Worker Program and Labour Market Impact Assessment have kept employers employing foreign work- ers busy. Between getting up to speed on the changes and changing practices to meet the new legal demands, it's not un- common for employers to be confused over Sergio Karas LegaL VieW e wage calculation was "an arbitratory standard not previously applied." Credit: Albert Pego (Shutterstock)

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