The Ontario Labour Relations Board ruled in a March 12, 2021 decision that temporary work agencies cannot charge its workers a fee when they end their work assignments.
The decision involved four former temporary workers from FDM Group, a multi-national temporary work agency, who left their assignments arranged through FDM before the conclusion of a two-year commitment period.
Under FDM’s employment agreement, workers who end their employment contract before completing their commitment period are liable for $30,000 in damages arising from job-training costs incurred by FDM.
Under the Employment Standards Act, temporary work agencies are prohibited from charging workers a fee in connection with them becoming an employee of the agency and in connection with them being assigned work through the agency.
“In addition to being an unconscionable provision in an employment agreement, FDM’s enforcement of the $30,000 charge is in clear violation of the Employment Standards Act,” said John No, staff lawyer with Parkdale Community Legal Services, which represented three of the workers. “If temporary work agencies want to find ways to retain employees, they should be doing so by maintaining proper working conditions and not by bonding them with a threat of a penalty.”
The Board agreed with the workers and found that FDM’s $30,000 charge constituted a fee within the meaning of the Employment Standards Act and the manner in which FDM sought to enforce the charge was clearly prohibited by the Act. As a result, the Board held that charge was illegal and ordered FDM to remove provisions enforcing the fee from its employment agreements.
The decision is a monumental win not only for FDM employees, but also for temporary agency workers across the province, many of whom are low-wage workers, recent university graduates, and newcomers to Canada. Downtown Legal Services, who represented one of the workers in the FDM case, called the Board’s decision “a step in the right direction,” particularly for vulnerable groups who seek employment through agencies like FDM.
No commended the four workers for their willingness to participate in the case and fight FDM’s fee. “Had we lost, it would have been easier for FDM to enforce the fee against them,” he stated. “Instead, they decided to take the risk and fight to protect the rights of temporary workers.”
Eduardo Guzman-Diaz, one of the workers involved in the case, was extremely pleased with the outcome. “I’m very excited and relieved to have received the Board’s decision,” Guzman-Diaz said. “This decision not only impacts myself and the three others involved in the case, but also all FDM workers. So many people have reached out to me saying that they have been afraid to end their contracts with FDM. I hope this decision also brings them some relief.”
Unfortunately, FDM’s public statements after the decision gives doubt as to whether FDM will fully abandon its attempts to seek money from its employees. PCLS and DLS call on the Ministry of Labour to ensure that FDM has removed any iterations of the illegal damages clause from its employment agreements and that it will comply with the Board’s decision on a going forward basis.
The full decision can be found online here.
For more information contact:
Staff Lawyer, Workers’ Rights Division
Parkdale Community Legal Services
firstname.lastname@example.org, (416) 531-2411, ext. 227