Protecting Foreign Workers in Canada

In the first class-action lawsuit in Canada under the Temporary Foreign Worker Program, the lawyers of Koskie Glavin Gordon succeeded in getting class certification and settlement worth $1.4 million on behalf of foreign workers at Denny’s Restaurants.

Temporary foreign workers employed at Denny’s restaurants in British Columbia were required to pay fees to an employment agency of up to $10,000 in order to secure two year contracts to work as servers, cooks and kitchen supervisors. Further, many of those had to pay their own airfare to come to Canada, were given insufficient hours of work once here, and were not properly compensated for overtime work they sometimes performed. A worker who complained to the Employment Standards Branch was fired a week later.

Through a pro bono legal clinic, our firm learned of this treatment and, together with another firm, initiated a class action lawsuit against Denny’s on behalf of the temporary foreign workers, the first such case in Canada. “One of our objects in bringing the case, in addition to making the workers whole for their losses, was to pave the way for other foreign workers to be able to enforce their rights under the Temporary Foreign Worker Program” says Charles Gordon, who was co-counsel on the case. “Under the Employment Standards Act, the workers could only go back six months to recover these expenses, and almost all of them had paid the agency fees and airfare more than six months previously and would get nothing.”

The certification hearing, which is necessary for the case to proceed as a class, was strongly contested by the Defendants, who argued that claims should be left to the Employment Standards Branch. When the case was certified in March 2012, it was the first time a class action on behalf of temporary foreign workers had proceeded to that stage.

Following certification, members of the class were given an opportunity to opt-out if they did not want to participate with the class. During the opt-out period evidence emerged that the Defendants were pressuring their employees to opt-out and we initiated contempt of court proceedings. “It was at this point that Denny’s approached us about a settlement,” Gordon said. After two days of mediation, a settlement in principle was reached, which was finalized in February 2013. Under the terms of the settlement, the workers would be repaid most of the agency fees paid, all of their shortfall in hours and overtime and any airfare paid. Finally, Denny’s agreed to pay the legal fees incurred so that these did not come out of the funds paid to the foreign workers.

In approving the Settlement Agreement reached, Madam Justice Fitzpatrick commented on the legal representation provided:

There is no dispute on this application that Class Counsel have demonstrated skill and competence in litigating this matter. As mentioned, there were both substantive and procedural complexities in different areas of law. I have already concluded that the potentially full monetary recovery for the class members is a very successful result. This result was achieved because of Class Counsel’s able efforts in forcefully asserting the claims of the class members to this point in time. Those efforts and the risks they bore have allowed the class members to achieve this result when, in reality, these claims would not have otherwise been advanced at all. In that respect, these law firms are truly the means by which the “access to justice” objective identified in Hollick has been achieved.

Read the full “Reasons for Judgment” here.