Understanding foreign worker issues: Intra-company transfers vs. temporary foreign worker programs

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A large number of migrant worker issues have been discussed in the media lately.  However, there are different migrant worker programs in Canada, and these give rise to different legal and policy issues. Unfortunately, the press has referred to all programs as the "temporary foreign worker" program and has failed to explain the different categories and processes involved. Calling these programs a "temporary foreign worker program" is vague; it is like saying there is an "environmental program" rather than a collection of laws that govern the use and treatment of the natural environment in its various forms.

The entry of temporary foreign workers is guided by Immigration and Refugee Protection Act regulations and the general provisions of the Temporary Foreign Workers Guidelines, and is supplemented by provisions contained in international trade agreements for citizens of signatory countries.

Many of the recent controversial transfers rely on the "intra-company transfer" program. The intra‑company transfer program originated under NAFTA and it has become even more explicit recently. This program is very popular with employers who exist as a "multi‑national" corporate entity.

Companies that have a foreign branch, subsidiary or parent company outside of Canada can send employees to the Canadian "branch". To do this, the company needs to provide Citizenship and Immigration Canada (CIC) information identifying the employee as such and providing a written job offer describing the job in detail and the relationship between the foreign company and the Canadian company.

The program is supposed to be limited to employees in managerial and executive positions. Under NAFTA, CCFTA and GATS, companies can also transfer employees with specialized knowledge. The applicant must have worked for the employer for at least one year in the preceding three years and be transferred to work in Canada temporarily. All 150 member countries of the World Trade Organization (WTO) are eligible for the program under GATS. CIC recently "harmonized" the intra‑company transfer program so that companies with operations in most countries are eligible.  Depending on the trade agreement and other category the application is made under, applicants can stay anywhere from six months to three years. This can be extended for up to five to seven years.

Here is where things get tricky: the program applies where the employee takes a position in Canada where a clear employer‑employee relationship with the Canadian branch of the company exists. The essential element in determining this relationship is the right of the employer to order and control the employee in the performance of their work.

In other words, if the "Canadian branch" is no longer the entity "controlling" the employee who transferred under the program, it isn't really an "intra‑company" transfer anymore. An example of this might involve the Canadian branch contracting out that employee to a third-party company. Further, the specialized knowledge requirements are also designed to be challenging thresholds to meet. The Guidelines describe someone who is supposed to have worked for the foreign branch extensively, and has detailed knowledge of its operations. It is described as knowledge of some complexity not easily transferred to another employee in the short‑term. Immigration officers are also directed in the Guidelines to scrutinize the application for a salary level appropriate to an employee with these kinds of advanced and special skills.  

So in other words, the intra‑company transfer program envisions a hotshot set of well‑paid globetrotting workers who are sent from one branch to another to share their amazing prowess in some complicated area with workers in the Canadian branch. They're supposed to be using this specialized knowledge specifically to improve the effectiveness of the Canadian branch. The intra‑company transfer program is not intended to facilitate a transfer where apparently poorly skilled recent employees are sent to be trained by Canadian workers in a third-party entity, as some employees have alleged is happening as part of a corporate kickback scheme.

Finally, what does this have to do with the more traditional seasonal agricultural worker, or live‑in caregiver programs that used to be known as the "temporary foreign worker" program? The answer is that these other kinds of workers are processed separately, under the more traditional temporary foreign worker programs. The conventional method for bringing a foreign worker involves an employer requesting a Labour Market Opinion (LMO) from the department of Human Resources and Skills Development Canada addressing whether there is a labour shortage for that position. When applying for an LMO, the employer demonstrates that it tried to recruit and/or train Canadian workers, and that it offered prevailing wages, and it has to meet other conditions.

Not so for the intra‑company transfer, because it is exempt from the requirement for a LMO. In other words, a company using the intra‑company transfer doesn't have to prove it even went through the motions of attempting to hire a Canadian. The normal "temporary foreign worker program," complete with LMO requirements, applies to categories like seasonal agricultural workers and live‑in caregivers but also allows other low‑skill and high‑skill occupation applicants where there is a labour market opinion. The recent changes to the "temporary foreign worker program" announced in April actually make changes to the LMO process and wages under the core program and so are unlikely to result in any changes with respect to employees brought in under the Intra‑company transfer exemptions.

Understanding how the current program was designed to work, how it actually works and what the different categories are is important to the discussion of what reforms should be considered and what changes might be able to solve the apparent problems.

Iler Campbell LLP is a law firm serving co-ops, not-for-profits, charities, and socially-minded small business and individuals in Ontario.

Note: Pro Bono provides legal information designed to educate and entertain readers. But legal information is not the same as legal advice -- the application of law to an individual's specific circumstances. While efforts are made to ensure the legal information provided through these columns is useful, we strongly recommend you consult a lawyer for assistance with your particular situation to obtain accurate advice.

Submit requests for future Pro Bono topics to [email protected]. Read past Pro Bono columns here.

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