Canadian Employment Law Today

Federal Court rules on first LMIA employer compliance case First decision on compliance in new regulatory regime emphasizes importance of documentation for everything BY SERGIO KARAS S ince the end of 2015, employers who obtain a labour market impact as- sessment (LMIA) are subject to a strict compliance regulatory regime created to prevent abuse of foreign workers and to increase the protection of the Cana - dian labour market. e relevant provisions that created the compliance scheme are found in the Immigration and Refugee Protection Act Regulations (IRPR), and are set out in three parts: the first relates to the require- ment not to modify wages and working conditions agreed upon in the LMIA, and to make reasonable efforts to provide an abuse-free work place; the second part deals with the retention of documents; and the third part imposes administrative pen- alties for breaches. e compliance regime is cumbersome and has caused considera- ble confusion amongst employers. e Federal Court recently ruled on the applicability of the compliance scheme in Obeid Farms v. Canada (Minister of Em- ployment and Social Development. An employer was found by Employment and Social Development Canada (ESDC) to be in breach of the regulations. e employer was sanctioned and placed on the list of those who are ineligible to use the tempo- rary foreign worker program (TFWP) for a period of two years and its details were published in the public list of non-com- pliant employers, colloquially known as a "blacklist." e employer sought judicial review of that administrative decision. e employer operated a family farm that had utilized the TFWP for more than 23 years. Between March 2014 and January 2015, the employer was issued three posi- tive LMIAs and was advised in writing of its rights and obligations with respect to compliance with the program, including complying with the terms of the seasonal agricultural workers' program (SAWP). Allegations were made against the employ- er by a former employee concerning poor working conditions and physical abuse. An inspector visited the employer's farm and, taking into consideration other informa- tion he received, found the employer to be in breach of the TFWP. e employer provided justification for the breaches, but the inspector deemed it to be insufficient. Payment records lacking e deputy minister recommended that the minister of ESDC find the employer to be noncompliant on the grounds that it was in breach of various conditions relating to wages and working conditions. e minis- ter found the employer to be noncompli- ant with respect to wages, as the inspection revealed that approximately 20 foreign workers had deductions of between $200 and $250 each during the first six weeks of their employment, which the employer claimed was a cash advance given upon ar- rival. e employer was unable to provide documentary evidence, in particular can- celled cheques for certain pay periods for a number of foreign workers. e employer claimed that they had been paid in cash. e employer was also found noncom- pliant with respect to working conditions. e inspection revealed that all foreign workers were consistently required to work seven days a week, notwithstanding the terms of their contract that required them to have one day of rest for every six days worked. It was determined that the employer failed to make reasonable efforts to provide a workplace free of abuse. Fur- ther, the employer was unable to provide certain documents and was also found to be noncompliant with the regulatory requirement to retain and provide docu- mentation. e minister decided to ban the employer from accessing the TFWP for two years and to publish the employer's information on the ineligible list. Under the regulatory framework, an inspection can be conducted on any em- ployer who has received an LMIA and has employed a temporary foreign worker if there is reason to suspect noncompliance, the employer has not complied in the past, or it has been chosen as part of a random verification of compliance. Pursuant to s. 209.91 of the IRPR, employers who have been found noncompliant following an in- spection can be banned from the program for two years and their name and address published in the public ineligibility list. e court noted that allegations were made against the employer by a former temporary foreign worker concerning poor working and living conditions, as well as physical abuse. e employer was noti- fied in advance of the inspection and docu- mentary request. e employer character- ized the $200-$250 deductions as "cash advances" but could not provide canceled cheques for many of the foreign workers. at explanation was found to be insuffi- cient and not supported by the evidence. With regards to noncompliance of working conditions, the employer argued that there was a verbal agreement with the foreign workers to work extra, so they may be able to return home early. However, the employer could not produce any docu- ment and the verbal agreement could not be confirmed because the foreign workers had already left the country. Since the employer could not provide supporting documentation for his claim, it was also found noncompliant with respect to its obligation to retain documents. e court held that the minister's deci- sion was reasonable because it included a consideration of the employer justification. e inspector considered the justifications put forward by the employer but found them to be inadequate. e regulations re- quire that in order for a breach to be justi- fied, the employer must demonstrate that it has made all reasonable efforts to comply with an LMIA condition, or that the breach resulted from anything done or omitted to be done by the employer in good faith. In this case, the justification provided did not meet the regulatory standard. e court agreed with the inspector's findings that any modification to the SAWP contract with a foreign worker requires a written agreement for any extra deductions being EMPLOYERS who employ temporary foreign workers have faced a flurry of new regulations in recent years, leading to confusion for some and increased paperwork for most. A recent Federal Court decision — the first to deal with compliance under the new legislative regime — shows that one thing hasn't changed: The need to document all aspects of the foreign worker's employment. 4 Canadian HR Reporter, a Thomson Reuters business 2017 CASE IN POINT: IMMIGRATION BACKGROUND

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