If a temporary foreign worker is arrested by the CBSA and held in long-term immigration detention, employers can generally terminate the relationship under the doctrine of “frustration of contract.” This usually relieves the employer from paying common law severance, but you must immediately issue a Record of Employment (ROE) and pay all outstanding wages.
When the Canada Border Services Agency (CBSA) arrives at a workplace to arrest a temporary foreign worker, it creates massive operational and legal chaos for the employer. The arrest usually occurs because the worker violated their visa conditions, overstayed, or had a previously rejected refugee claim. Suddenly, the business is down a staff member who has vanished into a federal holding centre.
For HR professionals and business owners, the immediate question is how to legally end the employment relationship without violating provincial labour laws. 🔍 Terminating an employee in Canada normally triggers strict notice and severance pay requirements. However, immigration detention introduces a unique legal concept called “frustration of contract,” which shifts the liability away from the employer.
Step-by-Step Process for Employers in Canada
Whether your business is located in British Columbia, Ontario, or Alberta, navigating the intersection of the provincial Employment Standards Act (ESA) and federal immigration enforcement requires a careful, documented approach.
Step 1: Confirming the Detention Status
The first step is establishing why the employee is missing. 👮 Due to strict federal privacy laws, the CBSA will not proactively call an employer to explain the arrest. Usually, a panicked family member or the worker themselves (calling from the detention centre) will notify you.
If the worker is held for a brief 48-hour review and released, termination might still trigger severance if you rush it. You must gather enough facts to determine if the worker is facing imminent deportation or indefinite detention, making their return to work impossible.
Step 2: Assessing “Frustration of Contract”
Under Canadian employment law, a contract becomes “frustrated” when an unforeseen event-which is neither the employer’s nor the employee’s fault-makes it impossible to fulfill the job duties. 📝 Since a foreign national without legal status cannot legally work, and they are physically locked up by the government, the employment contract is generally deemed frustrated by law.
This is crucial because frustration of contract typically extinguishes the employer’s obligation to provide working notice, statutory severance pay, or common law severance. It is highly recommended to consult an employment law firm before finalizing this classification.
Step 3: Issuing the Record of Employment (ROE)
Even if the worker is deported, Service Canada rules are absolute. 📂 You must issue a Record of Employment (ROE) within five calendar days of the end of the pay period in which the interruption of earnings occurred. On the ROE, employers must use Code K (Other) and add a note indicating that the employment contract has been frustrated due to the loss of legal work status or detention. Do not use Code E (Quit), as detention is not a voluntary resignation and doing so could invite penalties during a Service Canada audit.
Failing to issue the ROE promptly can result in heavy federal fines, regardless of the worker’s immigration transgressions.
Step 4: Processing Final Wages and Vacation Pay
The worker is legally entitled to every single penny they earned before the moment of arrest. 💰 This includes regular wages, accumulated overtime, and accrued vacation pay. You cannot withhold their final paycheque as a “penalty” for being arrested.
If the worker is deported to their home country and cannot access a Canadian bank account, you must still issue the final payment-often via a mailed cheque or direct wire transfer to their international account.
How Much Does it Cost in Canada?
Mishandling the termination of a detained worker can expose the company to wrongful dismissal lawsuits or Ministry of Labour complaints.
- Severance Pay: Generally $0 CAD if frustration of contract applies. If incorrectly handled as a standard termination without cause, severance could cost weeks or months of wages.
- Final Wages: You must pay 100% of outstanding wages and vacation pay (often 4% or 6% of gross earnings depending on the province).
- Legal Consultation: Retaining a corporate employment lawyer to draft a frustration of contract termination letter typically costs between $400 and $800 CAD.
| Employer Liability | Owed to Arrested Worker? | Governing Law |
|---|---|---|
| Unpaid Wages & Overtime | Yes, mandatory | Provincial ESA |
| Accrued Vacation Pay | Yes, mandatory | Provincial ESA |
| Severance / Notice Pay | Generally No (Frustration) | Common Law / ESA |
How Long Does the Process Take?
Employers must act swiftly to maintain compliance. The interruption of earnings officially starts the day the worker misses their shift due to the arrest. 🕑 While you have a strict window of 5 days from the end of the pay period to submit the electronic ROE to Service Canada, the deadline to disburse final wages is governed entirely by provincial laws rather than federal rules. For example, under the British Columbia Employment Standards Act, you must pay all outstanding wages within 48 hours of termination. In Ontario, final pay must be issued within 7 days of termination or on the next scheduled pay day, whichever is later. Under Alberta’s Employment Standards Code, final pay is due within 10 days after the end of the pay period or within 31 days of the last day of work. You must comply with these local timelines even if the worker is in a CBSA holding cell.
Frequently Asked Questions (FAQ)
Does the employer have to pay for the deportation flight?
If the worker was hired under the low-wage stream or primary agriculture stream of the Temporary Foreign Worker Program (LMIA), the employer signed an agreement promising to pay return airfare. You generally still bear this cost even if the worker is deported by the CBSA.
Will our company be fined by the CBSA?
If you knowingly hired an undocumented worker, or continued to employ them after their work permit expired, you could face massive federal fines (up to $50,000 per violation) and a ban from the LMIA program. If you genuinely believed their paperwork was valid, penalties are less likely.
Can I just fire them “for cause” instead?
Terminating for “just cause” requires proving severe workplace misconduct (like theft or violence). Being arrested for an immigration violation outside of work is usually not grounds for just cause, which is why “frustration of contract” is the safer legal route.
What if they get bail and want to come back?
If the IRB grants them release and their work permit is technically still valid, they might try to return. However, if you already finalized the frustration of contract and issued the ROE, the employment relationship is legally severed. You are not obligated to rehire them.
Do we have to notify IRCC of the termination?
Yes. If the worker was on a closed LMIA work permit, you have an obligation to update Service Canada and IRCC through the Employer Portal to inform them that the employment relationship has officially ended.
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