The federal government is investigating Royal Bank of Canada’s move to outsource technology jobs and reviewing paperwork submitted by its contractor to bring in temporary foreign workers. The probe centres on what the government sees as “apparent discrepancies” regarding RBC’s explanation of the events.
RBC came under fire on the weekend after allegations emerged that Canada’s largest bank contracted iGate Corp. to handle the outsourcing of certain technology jobs, and the firm was using temporary foreign workers to displace RBC technology staff. The bank denied those claims, and said it does not get involved in the hiring practices of the companies it hires.
However, officials with Human Resources and Skills Development Canada (HRSDC) say the government is now taking a closer look at some of the bank’s statements, along with the paperwork iGate submitted in an application to use foreign workers. The government did not elaborate on which statements are being looked at.
“An investigation is under way and HRSDC officials are currently reviewing the labour market opinions submitted by iGate in great detail, based on apparent discrepancies between RBC’s public statement and information which has previously been provided to the government,” said Alyson Queen, a spokeswoman for Human Resources Minister Diane Finley.
The controversy stems from a decision by RBC to outsource the technology operations of its Dexia investor service business to iGate, which operates mainly in India.
In preparation for the outsourcing, iGate stationed 21 employees at RBC to learn Dexia’s technology systems. About 45 RBC employees are affected.
While RBC said most of the iGate employees are local hires or employees visiting short-term from iGate’s offices in India, the bank said iGate hired just one person on a temporary foreign worker visa, arguing that the person’s skills were unique.
Under federal rules, companies are not allowed to use the Temporary Foreign Worker Program for work that can be performed by Canadians. The program is meant to help employers fill positions after all efforts at recruiting Canadians have been exhausted. It is a two-step process in which a company must first request a Labour Market Opinion from HRSDC and then specific work visas from Citizenship and Immigration.
Ms. Finley’s own department approved the application to bring in temporary foreign workers, but now has concerns it was misled in paperwork.
Canada’s largest bank found itself on the defensive Monday – its Facebook page bombarded with angry messages from Canadians – as people responded to news of RBC’s plans to outsource some of its IT work. The bank suggested the move was merely a case of outsourcing, which has swept through the financial sector in recent years, and that foreign workers weren’t doing the work of RBC staff in Canada.
Amid the criticism Monday, Royal Bank of Canada says the several dozen staff affected by the bank’s decision will be offered jobs elsewhere in the bank. In an internal memo to staff Monday, obtained by The Globe and Mail, RBC chief executive officer Gord Nixon told employees that roughly 45 affected employees will be offered other roles inside the bank after RBC outsources Dexia’s technology platform to iGate.
“We have already identified positions for a number of affected staff and we will continue to work diligently to find suitable roles for the remaining staff,” Mr. Nixon said.
According to the Human Resources application form, iGate would have had to explain whether or not they had attempted to recruit Canadian citizens for the work, along with proof such as newspaper ads or postings on job bank websites. The form asks applicants to explain how the successful application would benefit the Canadian labour market and also explain whether or not they plan on training Canadians for the available positions.
“It’s being taken very seriously,” HRSDC’s Ms. Queen said. “Never, ever was [the program] intended to replace Canadian workers who could well be available and skilled to do the same job.”
Use of the program has tripled over the past decade, growing from 101,098 workers in 2002 to an estimated 338,189 in 2012. Union leaders and the Official Opposition NDP say the expanded use of the program under the Conservative government has the effect of suppressing wages in Canada because employers are not required to offer more money to bring in local workers.
“The temporary foreign worker program started as a way to provide labour in the fields where a lot of Canadians wouldn’t work – like the picking of fruits and vegetables,” NDP Leader Thomas Mulcair said, adding that it has “morphed” into something that was not intended. “We have lots of Canadians looking for work.”
The Conservative government’s 2013 budget – which had a heavy focus on jobs and skills training – promised that over “the coming months” Ottawa would be introducing several changes to the Temporary Foreign Worker Program. The budget said the changes would include measures to increase the length and reach of domestic advertising for open positions before turning to the program. Ottawa also wants to impose user fees on employers who use the program.
Finally the government intends to amend the Immigration and Refugee Protection Regulations to restrict the use of non-official languages as job requirements while using the program. The change to language rules appears to be inspired by a high-profile case in B.C., where a Chinese-backed coal project by HD Mining International Ltd. obtained permits to bring in more than 200 Chinese miners under the program.
After B.C. labour groups filed a court action to protest the company’s move, Human Resources Minister Diane Finley announced in November that the government was placing the foreign worker program under an official review. At the time, Ms. Finley’s office specifically expressed concern with the company’s decision to list Mandarin as a language requirement for the mining positions.
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