A temp agency was ordered to stop billing workers $30,000 for resigning. A new complaint says the practice continues
A Mississauga-based worker says a temporary help agency billed him $30,000 for leaving a low-wage job placement early, months after the provincial labour board ruled the company was prohibited from doing so.
In an employment standards claim, the worker - whose name is redacted in the documents - said he signed up to work through multinational temp agency FDM Group last year and completed a training program through the company. This May, he was placed on a two-year temporary contract at a major Canadian bank. Not long after, the worker resigned, providing one month's notice.
According to emails with FDM's lawyer, the worker was then told he owed $30,000 - almost as much as he would make in a year - as damages" for breaking his contractual" commitments.
That practice was previously the subject of numerous complaints by former FDM employees at the labour ministry. In March of this year, the Ontario Labour Relations Board (OLRB) ruled the fee was prohibited" and ordered the company to remove the provision from its contracts with workers, many of whom were young graduates or new Canadians.
But a copy of the Mississauga-based worker's contract still says employees are liable for liquidated damages" of up to $30,000 if they do not complete their two-year placement; in addition to damages," the contract says FDM can recover interest at the rate of 18 per cent" a year.
In a statement to the Star, a spokesperson for the U.K.-headquartered company said it does not comment on individual cases" and said its policies, practices and contracts are in compliance with applicable laws and the recent order of the OLRB."
FDM did not respond to specific questions about how it has changed its contracts to comply with the labour board's order.
The Mississauga-based worker did not pay the fee stipulated by FDM and instead filed an employment standards claim. While that claim is currently being investigated, the ministry says it does not have the authority" to enforce the labour board's order requiring FDM to change its employment contracts, according to correspondence reviewed by the Star.
In a series of letters to the labour ministry this summer, Parkdale Community Legal Services lawyer John No said the clinic had been contacted by a number of recent or current FDM employees" with complaints about their contract - even after the labour board ruling.
FDM is making a mockery of the OLRB and the Ministry of Labour by refusing to remove the fee provisions in the employment agreements," No's letter says.
In a response, the ministry's director of employment standards, Melissa Faber, expressed concern about any allegation that an employer is not complying" with a labour board order. But the letter says Faber is not granted with the authority" to enforce those orders.
Individual claims from workers will be investigated, the letter states.
In a statement, a spokesperson for the Ministry of Labour said that to enforce a non-monetary" order from the labour board, the director of employment standards would need to conduct a new investigation of the alleged contravention, and reach its own findings."
The ministry's proactive enforcement efforts include a focus on sectors where there is a history of contraventions" and where vulnerable workers are employed, the spokesperson said. Once a contravention is found, the goal becomes to ensure ongoing compliance from the employer."
As of March 2021, when the labour board issued its order, there have been no proactive inspections of FDM Group, the ministry said.
They're really taking a very reactive, individualistic approach," said No, who represented former FDM employees at the labour board proceedings.
It's frustrating because the Ministry of Labour was involved in the (OLRB) appeal, and actually agreed with us that this provision was illegal. But they completely refused to take a proactive approach refusing to look at it as a systemic issue."
Temp agencies in Ontario are not allowed to charge workers for their services. They also can't charge fees for providing resume help or interview preparation.
According to the labour board ruling earlier this year, FDM provides workers with 12 to 16 weeks' training before putting them on two-year placements with clients. Those clients include some of Canada's largest banks, investment companies, insurance companies and retailers," the decision notes.
FDM workers receive between $5,500 to $9,000 for the training period, the decision said. In their job placement, they received a base salary of $30,000 in their first year of employment, plus a bonus" for each day worked - amounting to a total of around $40,000.
Former employees who participated in the labour board hearings panned FDM's academy," arguing that it did not sufficiently prepare them to meet the needs of the client, and that they had to seek out additional training."
In its statement to the Star, the company said the OLRB ruling acknowledged that FDM's model is unique" and noted that a worker who resigns prior to completing the contractual commitment period may indeed in some circumstances cause pecuniary and reputational losses to FDM who relied on the promise of a period of employment."
But the labour board found that regardless of its business model, FDM's contract language broke the law.
The manner in which (FDM) has chosen to recover damages" to which it feels entitled is prohibited by the Employment Standards Act," the ruling says.
No said the fees serve to scare people into staying put in a job," even if they find a permanent position elsewhere or a better opportunity.
It is incredibly frustrating."
According to the contract included in the latest claim against FDM, the temp agency has made some changes to its fees. Employees who leave a job with over a year remaining in their contract still face a $30,000 bill. But if the worker leaves with less than a year remaining, FDM seeks to recover a lesser amount - $20,000 in damages," the contract says.
We have a strong reputation for treating our staff fairly and for promoting equality, diversity and social mobility across our entire workforce. We are committed to operating in compliance with applicable laws and regulations," the company said in a statement.
No said the Ministry of Labour has tools to hold employers accountable, including more proactive investigations and serious prosecutions, which can result in corporations being fined up to $100,000.
If there's any employment standards case that deserves to have this prosecution initiated, it is this kind: a large corporation that's already been told that they're violating the Employment Standards Act and is making a mockery of it."
Sara Mojtehedzadeh is a Toronto-based reporter covering work and wealth for the Star. Follow her on Twitter: @saramojtehedz