Protecting the Vulnerable from Unscrupulous Recruiters: Alberta’s Employment Agency Business Licensing Regulation

In her May 30, 2012 post, my colleague, Tiffany Stokes, referred to new rules being implemented by the Government of Alberta, which may work to curtail illegal recruitment of temporary foreign workers (TFWs). These new rules – formally known as the (amended) Employment Agency Business Licensing Regulation – came into force on September 1, 2012. They are designed to protect all individuals who use employment agencies to assist them with finding employment in Alberta (“job-seekers”), including TFWs, from unscrupulous recruitment activities, and to deter employment agencies from engaging in the same. Some of the new rules are seemingly dictated by what most of us would regard as basic common or business sense. Others, however, specifically address the issues commonly experienced by TFWs who use this service.

As mentioned above, the new regulation introduced what are seemingly basic rules, insofar as they require employment agencies to implement what most of us likely regard as good business practices. For example, prior to the implementation of the new regulation, employment agencies were not required to enter into written agreements with job-seekers with respect to finding employment for those individuals. Under the new regulation, written agreements signed by all parties to the agreements are mandatory (s. 10(1)). These agreements must outline the services to be provided by the employment agency (s. 10(3)(b)), as well as the responsibilities of the agency and its agents under the agreement (s. 10(3)(c)). They must also contain the contact information for any employment agency operator, employee, representative or agent providing services to the job-seeker (s. 10(3)(d)).

Also of a more basic nature is the introduction of the requirement that employment agencies maintain records for at least 3 years (s. 9(2)). Such records include correspondence, copies of job offers that have been funneled through the agency, as well as all agreements entered into with job seekers. It also includes copies of all applications to governments or government agencies made on behalf of job-seekers and copies of all decisions received in respect of those applications.

One of the mechanisms that was seemingly introduced to protect vulnerable job-seekers (such as TFWs) is the requirement that the written service agreement clearly state that the employment agency is prohibited from collecting a fee or other compensation from an individual who is seeking employment, or for whom the agency has secured/attempted to secure employment (s. 12(3)(e)). The exact statement that is to be included in the agreement is outlined in the Schedule to the regulation. Either this statement, or a notice indicating where in the agreement it is printed, must be included on the front page of the agreement (s. 12(4)). The fee prohibition is not new, only the requirement for full, upfront disclosure of the fee prohibition within the service contract – one can assume, then, that this rule was introduced because the fee prohibition was unknown to most job-seekers utilizing employment agency services. Problematically, the statement is written in what could be referred to as legalese, which could result in some job-seekers skimming over it and/or signing the agreement without really understanding what it means.

With respect to TFWs, the most notable aspect of the new regulation is section 13, which prohibits employment agencies from engaging in “unfair practices”. As a result of this section, it is now an offence for an employment agency to give false, misleading or deceptive information to a job-seeker with respect to matters relating to immigration (s. 13(2)(b)(iii)). This likely includes practices such as guaranteeing the success of the job-seeker’s immigration application, or threatening deportation once in Canada. Both of these tactics are commonly used by recruiters (and immigration representatives) to manipulate TFWs, who are often desperate to find employment outside of their home countries, into utilizing their services.

Also noteworthy is the requirement that any international employment agency recruiting workers for low-skilled and semi-skilled occupations provide an original, signed security in the amount of $25,000, prior to a license being issued; or, if the license was issued prior to September 1, 2012, before September 30, 2012. TFWs seeking employment in low/semi-skilled occupations are particularly vulnerable when it comes to unscrupulous recruitment agencies; recruiters often charge these TFWs, who know nothing about the fee prohibition, thousands of dollars to secure them low-paying employment. The goal behind the security requirement, then, is to deter international recruitment agencies (which are arguably difficult to regulate given the location of their consumers) from exploiting such vulnerable job-seekers by putting the agency at risk of losing their security as a result of any non-compliance with the regulation. Note, however, that the $25,000 amount is the minimum security requirement. The Director of Fair Trading has the discretion to increase the amount, taking into consideration the department’s previous history with the business, the business’s financial history, and any criminal convictions associated with the business.

While the regulation is a step in the right direction, whether it will actually function to protect vulnerable job-seekers will depend on both the dissemination of the “right” information to those workers, and how tenacious the government is when it comes to investigating complaints and monitoring the activities of employment agencies. Problematically, the regulation neither includes a requirement that all job-seekers be provided with this information upon entering into a service agreement with an employment agency, nor provides for a monitoring initiative that compels licensed employment agencies to submit to reviews of their business operations at set intervals (during the licensing period, or prior to license renewal, for example). Without such mechanisms in place, it is arguable whether the regulation will actually function to deter employment agencies from engaging in unscrupulous recruitment activities at the expense of the vulnerable.

Helpful links:

• To find out if a business is a licensed employment agency in Alberta, see: www.servicealberta.ca/976.cfm.
• For information on filing a complaint against an employment agency, see: http://servicealberta.gov.ab.ca/pdf/tipsheets/Filing_a_complaint_with_CS.pdf.
• For the Consumer Tip Sheet on Employment Agencies, see: http://www.servicealberta.gov.ab.ca/pdf/tipsheets/Emp_Agencies_Tipsheet.pdf.