Canada: Tripartite Arrangements: Employers, Recruitment Firms & Foreign Workers

Last Updated: July 30 2015
Article by Lori Brienza

The "commercialization" of migration has become increasingly common worldwide. As the need for temporary foreign workers has expanded, the use of a recruiter specializing in international talent has had a corresponding increase. Locally, many Alberta employers rely on third party recruitment firms to assist them in filling their labour shortages with foreign workers. Entering into this kind of engagement can be very beneficial (and expensive), particularly where an employer's labour strategy requires the ability to fill temporary labour needs relatively quickly.

Recruiters essentially act as brokers, drawing on information about available positions locally and foreign labour pools in order to connect employers with foreign talent. This "tripartite" relationship between the employer, the recruitment firm, and the foreign worker can however create unique legal challenges for all parties involved.

For starters, Alberta, Saskatchewan, Manitoba, British Columbia, and Nova Scotia have all introduced legislation to regulate the activities of recruiters, including their licensing. In Alberta, an employer seeking to recruit and hire foreign nationals through a recruitment company must ensure that their recruiter is licensed by Service Alberta under the Fair Trading Act, RSA 2000, c F-2. Confirmation must also be obtained that no placement or recruitment fees have or will be charged to any foreign worker.

At the engagement stage, employers and third party recruitment firms should carefully consider the terms and conditions that will govern their prospective relationship. The recruitment of foreign workers necessarily introduces an additional party, Citizenship and Immigration Canada ("CIC"), to the arrangement. This is because the hiring of a foreign worker is ultimately dependent upon the receipt of work permit approved by CIC. Even where eligibility requirements are met, the outcome of a foreign national's work permit application cannot be guaranteed. As such, parties will want to carefully consider compensation clauses for services rendered.

A decision of the Alberta Court of Queen's Bench rendered May 2014 considered the contractual terms governing the relationship between an employer and a third party recruitment firm. In Northern Alberta Consultancy Inc. (SK Personnel) v Flint Energy Services Ltd., 2014 ABQB 279 ("SK Personnel"), the Court considered with whom the risk lay – the employer or the recruiter – in the event that CIC rendered a work permit refusal. The recruitment firm argued that the employer could not unilaterally terminate the agreement on the basis of CIC's refusal while taking the 'benefit' of the work performed by it.

The compensation scheme in SK Personnel required that certain milestones be met prior to payment to the recruitment firm. The greatest percentage of payment became due and owing once a worker arrived in Canada. Ultimately, the Court held that by structuring the terms and conditions of compensation in this manner, the recruiter assumed the risk of non-payment in the event that a milestone was not reached; even where the failure to reach the "milestone" was not the fault of either party. This decision highlights the importance of each party's understanding of their expectations and obligations prior to entering into a tripartite relationship.

In addition to contractual considerations, the impact of the immigration process on tripartite arrangements must be considered. In most cases, an employer generally requires a Labour Market Impact Assessment ("LMIA") confirmation from Employment and Social Development Canada ("ESDC") to hire a foreign worker. The LMIA confirms that hiring a foreign national will have a neutral or positive effect on the Canadian labour market. In order to be eligible for a LMIA confirmation, there must be an "employment relationship" with the foreign worker and clear terms of employment. The "employer" will then be held accountable to ESDC for compliance with the rules of the Temporary Foreign Worker Program as well as the terms of the foreign worker's employment. The parties to a tripartite arrangement must carefully consider who will carry out ESDC's "employer" obligations as they relate to the employment of foreign workers.

For ESDC's purposes, the "employer" has the authority to determine how the work will be performed by the foreign worker and directly benefits from the work performed. The employer also assumes responsibility for ensuring that the conditions of a LMIA and employment contract are met at all times throughout the employment relationship. This includes the requirement to pay foreign workers' wages in accordance with the LMIA confirmation or arrange for payment by another entity. In a tripartite employment arrangement, where the employer retains the services of a third party recruitment firm to locate, supply and pay temporary foreign workers to meet labour requirements, the recruitment company and the employer may be required to jointly apply for an LMIA and agree to certain attestations set out therein.

By jointly applying for the LMIA, the employer and the third party recruitment firm may be inadvertently holding themselves out to be co-employers of the foreign worker, despite an intention or agreement otherwise. This representation could lead to compliance issues for the employer. As a result, when applying for a LMIA in the context of a tripartite arrangement, we recommend that each party provide an accurate description of its obligations and requirements to the foreign worker under the contractual agreement for recruitment services. Doing so will minimize the risk associated with being inadvertently named the "employer", or being held accountable for a particular obligation contractually assumed by the other party.

We have highlighted a few of the legal challenges that may arise from entering into tripartite arrangements. These issues can be easily resolved by developing a strategic plan in advance of entering into a tripartite arrangement. The parties should consider and discuss expectations and obligations with respect to recruitment, the specific immigration processes required to hire or retain foreign workers, compliance with the TFWP, and compensation for services rendered.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

Lori Brienza
Events from this Firm
27 Oct 2016, Seminar, Edmonton, Canada

Alberta is going through a difficult economic period. These times can be challenging and while owners struggle to get their business through the rough patch, they want to preserve the assets and capital they have built up.

2 Nov 2016, Webinar, Calgary, Canada

“Problem Employees” come in a variety of forms but seem to take up the majority of an employer’s time. Each form brings its own challenges and each must be addressed in a different way.

30 Nov 2016, Webinar, Calgary, Canada

Legal issues surrounding contaminated sites affects landowners, developers, realtors, as well as consultants and contractors working on the front lines. This webinar will provide a practical review of how the legislation is actually being used, recent court decisions, challenges with brownfield developments, and future changes.

In association with
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Check to state you have read and
agree to our Terms and Conditions

Terms & Conditions and Privacy Statement (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

Use of

You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.


Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.


Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.

Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

If you do not want us to provide your name and email address you may opt out by clicking here .

If you do not wish to receive any future announcements of products and services offered by Mondaq by clicking here .

Information Collection and Use

We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to with “no disclosure” in the subject heading

Mondaq News Alerts

In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.


A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

Log Files

We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.


This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

Surveys & Contests

From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.


If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.


This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to

Correcting/Updating Personal Information

If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to

Notification of Changes

If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

How to contact Mondaq

You can contact us with comments or queries at

If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at and we will use commercially reasonable efforts to determine and correct the problem promptly.