TORONTO Canada is investigating a report that its largest bank is using temporary foreign workers hired by an outsourcing company to effectively replace existing staff, a situation the government said it would not accept.
A Conservative government minister revealed the probe on Saturday after a report from the Canadian Broadcasting Corporation. The CBC story said Royal Bank of Canada (RY.TO) was planning to eliminate about 50 employees in its investor services division in Toronto and have the work done by outsourcing company iGate Corp (IGTE.O).
RBC said on Sunday it had not directly hired temporary foreign workers to take over the work of its current employees.
But Zabeen Hirji, the bank's chief human resources officer, said RBC looked to suppliers like iGate to ensure it complies with existing Canadian laws. She said she was not sure of the exact visa status of iGate's employees working at the Canadian offices of the bank.
"We ask them to undertake that they follow all the rules and regulations for everything including employment ... at the end of the day iGate has to answer that question," she told Reuters in a telephone interview, adding that the bank was seeking further information from iGate about the status of the workers.
The U.S.-incorporated outsourcing company, which has most of its operations in India, did not immediately respond to an e-mail seeking comment.
Canada's Conservative government has already said it will review a temporary foreign worker program that lets employers fill jobs with non-Canadians when qualified citizens or permanent residents are not available because of skills and labor shortages.
Labor groups say employers are not doing enough to find Canadians to fill those jobs.
In a statement after the CBC report, Human Resources Minister Diane Finley said late on Saturday that Canadians must always be the first in line for hiring opportunities.
The program "was never intended as a means to bring in temporary foreign workers in order to replace already-employed Canadian workers. This is why we have launched a review of the program," she said in a statement.
The government minister said she instructed staff to work with citizenship and immigration officials "to determine the next steps" in the RBC and iGate situation.
RBC's Hirji said about 45 workers were affected by the outsourcing plan. She said so far about 20 of those were set to find other jobs in the bank or had accepted retirement packages. She added the hope is a majority will find work somewhere within RBC.
Canada's banking industry is dominated by a half dozen major lenders, which emerged largely unscathed from the global financial crisis and have repeatedly been ranked among the world's most stable.
(Editing by Doina Chiacu)