Terminating a Temporary Foreign Worker requires you to pay proper severance under provincial laws, exactly like a Canadian citizen. You must also notify Service Canada and IRCC immediately to cancel the work permit and protect your company from severe compliance penalties.
Letting an employee go is always a challenging process for any business. When that employee is a Temporary Foreign Worker (TFW), the stakes are significantly higher. Canadian employers face dual responsibilities: complying with strict provincial labour laws and satisfying federal immigration mandates from Immigration, Refugees and Citizenship Canada (IRCC) and ESDC.
Failing to handle this correctly can lead to wrongful dismissal lawsuits or bans from hiring foreign workers in the future. Connecting with an experienced employment and immigration lawyer from our directory is the best way to safeguard your operations during a termination process.
Step-by-Step Guide to Terminating a TFW in Canada
Whether your business is in Vancouver, Edmonton, or Montreal, you must navigate both provincial employment standards and federal immigration laws. Here is generally how the legal process works.
Step 1: Review the Employment Contract
Before taking any action, review the signed contract and the LMIA annex. You must determine if the termination is without cause (requiring standard notice and severance) or with just cause (where severe misconduct or a criminal offence has occurred).
Step 2: Calculate Notice and Severance Pay
TFWs have the exact same labour rights as Canadian citizens. In Ontario, for example, the Employment Standards Act (ESA) dictates the minimum notice period or pay in lieu of notice. Depending on the length of service, you may owe the worker standard severance pay, plus any outstanding vacation pay.
Step 3: Cover Return Transportation Costs (If Applicable)
If you hired the worker under the low-wage stream of the TFWP, or under the Seasonal Agricultural Worker Program, you are legally obligated to pay for their round-trip airfare. You must provide them with a paid ticket back to their home country upon termination. ✈️
Step 4: Notify the Government Authorities
You must formally notify ESDC and IRCC that the employment relationship has permanently ended. This protects you from being held responsible for the worker’s actions after termination and allows IRCC to appropriately update their records regarding the employer-specific work permit.
How Much Does Termination Cost?
The financial impact of dismissing a foreign worker depends on their tenure and the specific TFWP stream. Consider these typical B2B costs in Canada:
| Expense Type | Estimated Cost (CAD) |
|---|---|
| Pay in Lieu of Notice | 1 to 8 weeks of pay, depending on tenure and provincial laws. |
| Return Airfare (Low-Wage Stream) | $800 to $2,500 CAD, depending on the worker’s home country. |
| Legal Consultation Fee | $300 to $800 CAD for a lawyer to draft a proper termination letter. |
How Long Does the Termination Process Take?
Terminating an employee without cause requires either working notice (e.g., giving the employee 2 weeks to finish their duties) or immediate dismissal with pay in lieu of notice. Government notifications to ESDC and IRCC should generally be submitted within 5 to 10 business days of the final employment date.
Frequently Asked Questions (FAQ)
Does a terminated foreign worker have to leave Canada immediately?
Not necessarily. Their work permit remains valid until its expiry date, but because it is employer-specific, they cannot legally work for anyone else until they secure a new LMIA and a new work permit.
Can I just stop paying them if I run out of work?
No. TFWP rules demand that you pay the worker for the minimum hours guaranteed on their LMIA (usually 30 hours per week). If you have no work, you must officially terminate them and provide severance.
Do I owe severance if I fire them for stealing?
Generally, if you have documented just cause (such as theft or a severe indictable offence), you are not required to provide notice or severance. However, proving just cause in Canada is notoriously difficult, and legal counsel is highly recommended.
Leave a Reply