April 11, 2013 / 6:50 PM / in 5 years

RBC CEO apologizes for controversy over outsourcing

TORONTO, April 11 (Reuters) - The head of Royal Bank of Canada made a rare apology to employees in a move to quell a media firestorm over the bank’s plan to outsource jobs and to assure Canadians that the nation’s largest bank complies with labor regulations.

“I want to apologize to the employees affected by this outsourcing arrangement as we should have been more sensitive and helpful to them,” RBC Chief Executive Gord Nixon said in an “Open Letter to Canadians” on Thursday.

RBC, which is also Canada’s largest public company, has been heavily criticized following revelations of its relationship with U.S. outsourcing firm iGate and a report that iGate used temporary foreign worker visas as it worked to replace a few dozen staff at the bank’s Toronto investor services division.

The bank said it trusted iGate to comply with local regulations, and iGate said in a statement to Reuters that its hiring practices were fully compliant with Canadian law.

But the revelations, in a report last week by the Canadian Broadcasting Corporation, triggered an investigation by the Conservative Government into the use of the visas.

The report sparked outrage in social media sites such as Twitter and Facebook over the bank’s plan to outsource work to California-based iGate, which operates mainly in India.

In the letter, Nixon said the bank has complied with regulations and that affected employees would be offered comparable job opportunities within the bank.

“We are reviewing our supplier arrangements and policies with continued focus on Canadian jobs and prosperity,” he said, adding that the bank’s Canadian client call centers would remain in Canada. He said RBC employs over 57,000 in Canada.

While the bank’s reputation may have taken a hit this week, its share price remained steadfast on the week, adding 3 percent over the past four sessions.

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