‘The judge fell into error by applying the colloquial concept of agency, rather than the test for agency at law’
The Court of Appeal of British Columbia (B.C.) has overturned, by a vote of 2-1, key findings in a class action involving Mac’s Convenience Stores and a group of temporary foreign workers.
The workers alleged that an immigration consultant retained by Mac’s to assist in recruiting workers breached its fiduciary duty to them by charging prohibited fees for jobs. Specifically, Overseas Immigration Services charged workers a fee of $2,000 to attend a recruitment fair or to begin the recruitment process, according to court documents. The workers are from many countries of origin, but all were living and working in Dubai when they attended job fairs.
Overseas charged a further $5,500 to $6,000 when the foreign worker obtained a visa to come to Canada under the Temporary Foreign Worker Program (TFWP).
Mac’s retained Overseas in 2012 to assist with filling positions at its convenience stores in Western Canada, agreeing to pay the firm $500 for every temporary foreign worker hired for a cashier or food counter attendant position and $1,500 for a supervisor.
In a summary trial held in April, the judge found that Overseas was acting as Mac’s agent in recruiting the workers and that, as a non-fiduciary principal, Mac’s could be “vicariously liable for any breach of fiduciary duty committed by Overseas”.
Justice Lauri Ann Fenlon and Justice Lisa Warren of the Court of Appeal for B.C. found both findings to be erroneous.
On the first issue, they found that “Overseas had no actual or apparent authority to bind Mac’s contractually; the judge fell into error by applying the colloquial concept of agency, rather than the test for agency at law which requires the agent to have authority to bind the principal contractually. Given the conclusion on agency, it is not necessary to consider the question of vicarious liability,” according to the decision.
Mac's not liable for recruiter violations
Warren also noted that Mac’s cannot be held liable for Overseas’ violations.
Justice Sharon Matthews, the summary trial judge, in her ruling on Nov. 1, 2024, noted that Overseas had been involved in recruitment and arranged for items Mac’s had contracted to provide, such as travel and accommodation, and that Overseas had the authority to recruit the class members through the TFWP on behalf of Mac’s.
However, the steps relied on by the judge and the plaintiffs “occurred after the plaintiffs had retained Overseas to assist them with obtaining work in Canada and after they had each agreed to pay fees to Overseas in two instalments,” said Warren.
“The wrong they complain of, the payment of such fees, thus occurred prior to the parties even being introduced to Mac’s as a potential employer. In short, the judge made no finding that Mac’s held Overseas out as its agent authorised to enter into contracts to collect fees on its behalf before the plaintiffs committed themselves to that step. Apparent agency is therefore not made out.”
Numerous groups have spoken up about how immigrants looking to land employment in Canada are being asked to pay tens of thousands of dollars by employers who are abusing TFWP.
Can temporary foreign workers seek employment elsewhere?
On the issue of duty to mitigate, Justice Matthews noted that TFWP restrictions legally limited workers to specific positions at specific locations, preventing them from easily securing alternate employment. The workers’ precarious immigration status, combined with the prolonged process of obtaining new permits, meant requiring them to mitigate losses would be unreasonable, she said.
The court held that their contracts implicitly ousted the duty to mitigate, as they could not legally take up other work without violating TFWP rules.
The B.C. Court of Appeal justices disagreed.
“In B.C., employees with fixed-term contracts have a duty to mitigate their losses if terminated before the end of the fixed term unless that duty is ousted by the provisions of the contract. Here, the contracts expressly provided for a change of employer on early termination by Mac’s, so a term ousting any duty to mitigate could not be implied into the contract. Whether there were practical barriers to mitigation was a question of damages to be assessed at trial,” read part of the summary of findings from Justices Fenlon and Warren.
