Royal Bank’s move to contract an outsourcing company to hire overseas workers to replace Canadian employees sparks a heated debate on the use of temporary foreign workers
Human Resources and Skills Development Canada is weighing its options on how to deal with reports that Royal Bank of Canada may have misused the country’s Temporary Foreign Workers Program (TFWP) by contracting an India-based technology and business processing firm to provide foreign replacements for 45 domestic bank employees.
“We have recently learned of the allegations that RBC could be replacing Canadian workers by contracting with iGate, which is filling some of the roles with temporary foreign workers,” a statement by DHRSDC Minister Diane Finley, said. “If true, this situation is unacceptable.”
For now, she said, her office is looking into the labour opinion filed with government by iGate to determine if the outsourcing company had followed existing rules.
The purpose of the TFWP was to fill “acute labour needs when Canadians are not available” for the positions, according to the HRSDC chief.
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“It was never intended as a means to bring in temporary foreign workers in order to replace already employed Canadian workers,” Finley said.
News broke out over the weekend that RBC, which reported revenues of $7.91 billion, was replacing 45 of its employees with those with temporary work visas. The move set of a storm of tweets and Facebook posts from people outraged by RBC’s plans. A Facebook page calling for a boycott of the bank had gained in excess of 4,000 followers by Monday afternoon.
In the past, numerous Canadian firms had contracted out jobs to overseas workers and foreign based business processing operations. What RBC appears to have done is contracted iGate to bring into Canada temporary foreign workers that will take over positions held by Canadian employers. The temporary workers will be trained in the IT department of RBC.
In a statement, the bank appeared to be distancing itself from the hiring of the temporary workers, saying that was actually done by the company it hired, iGate.
“Contrary to allegations, the bank has not hired temporary foreign workers to replace the jobs of current RBC workers,” the statement said.
“RBC agreements with suppliers, including in this case iGate, requires them to ensure that they are abiding by the applicable laws and regulations,” said Greg Grice, head of enterprise services and chief procurement officer for RBC. “External suppliers allow us to leverage their scale and technical skills to continually improve our operational processes and services, and re-invest in initiatives that enhance the client experience.”
iGate Corp. is an outsourcing firm based in Bangalore, India. The U.S.-incorporated company differentiates itself from competitors by charging clients not by number of hours of work done but rather by outcomes.
Zabeen Hirji, chief human resources officer for RBC, said the bank is looking for other positions for employees of the bank who will lose their jobs.
“We recognize the impact of this situation on our employees and we continue to remain focused on assisting our employees through this situation,” she said. “We are working diligently to find suitable roles for those affected and it is our hope over the next few months to transition them to other positions.”
In an interview with the news agency Reuters, Hirji said she was not sure of the visa status of iGate employees working at the Canadian offices of the bank. She said RBC asked iGate to ensure that they follow government rules and regulations covering the hiring of the workers.
Meanwhile, Finley said that she HRSDC is in the process of determining what steps it should take.
“With regards to this particular matter, I have instructed my department to work with the Citizenship and Immigration Canada to determine the next steps, “she said. Related Download Sponsor: IBM Canada Ltd Pushing the frontiers – CFO Insights from the Global C-suite Study Based on a global survey of 576 CFO interviews, this whitepaper from IBM's Institute for Business Value provides analytical insights into the traits of leading CFOs and what they are doing to become more efficient, forward-looking and proficient at creating profitable growth. Register Now