New obligations for personnel placement agencies and employers who retain their services

July 19th, 2018

Bill 176, An Act to amend the Act respecting labour standards and other legislative provisions mainly to facilitate family-work balance (the « Act »), which was adopted by the National Assembly on 12 June 2018, gave rise to several amendments and notably reinforced the obligations for personnel placement agencies and recruitment agencies for temporary foreign workers, as well as for employers who want to retain their services.

Obligatory Licence and Equivalent Salaries

Indeed, the new section 92.5 of the Act respecting labour standards provides that “no one may operate a personnel placement agency or a recruitment agency for temporary foreign workers unless they hold a licence issued by the Commission”, failing which leads to a fine of $600 to $6,000 (or of $1,200 to $12,000 for a subsequent conviction). Even though a definition of what constitutes a “personnel placement agency” is yet to come by means of a regulation, nothing in the Act indicates that these new provisions could apply to subcontractors.

An agency whose licence application is denied may contest the Commission’s decision before the Administrative Labour Tribunal within 30 days of notification of the decision. The same applies in the event of a suspension, revocation or non-renewal of a licence.

Furthermore, the new section 42.1 of the Act respecting labour standards provides as follows: “No personnel placement agency may remunerate an employee at a lower rate of wage than that granted to the employees of the client enterprise who perform the same tasks in the same establishment solely because of the employee’s employment status (...)”.

As far as client enterprises are concerned, they will have to be more vigilant when retaining the services of these types of agencies.

Henceforth, every employer who retains the services of an agency that does not have a licence is liable to a fine of the same amount as mentioned above for the agency itself. In this respect, it is worth mentioning that the Act provides that the Commission shall make available to the public a list of holders of such licences.

In addition, the agency and the client enterprise will be solidarily liable towards the employee for the pecuniary obligations fixed by the Act respecting labour standards or the regulations (e.g. payment of salary, of vacation, etc.).

Upcoming Regulation

The coming into force of these provisions is, however, subject to the adoption, by the government, of a regulation, which shall notably (i) provide further detail regarding the definition of a personnel placement agency and a recruitment agency for temporary foreign workers, (ii) establish the categories of licences, (iii) determine the activities covered, (iv) set the period of validity of the licences and (v) prescribe the administrative measures that may be applied to a licence holder that does not comply with its obligations.

It this respect, it is not clear whether the application of the prohibition set forth in section 41.2 of the Act respecting labour standards referred to above is also subject to the adoption of a regulation or if, on the contrary, said prohibition is already in force since 12 June 2018. The website of the Commission seems to indicate that this provision will only enter into force at the date of adoption of a regulation by the government. We are, however, of a different view given the drafting of section 55 2° of the Act which does not expressly mention section 41.2 of the Act respecting labour standards as being part of the provisions that will only become applicable as of the date of adoption of said regulation.

Finally, please note that the Act provides for a transitional period permitting existing agencies to continue their activities, provided they apply for a licence within 45 days of the date of coming into force of the above provision.

The BCF labour and employment law team will carefully monitor the adoption of the aforementioned regulation and keep you informed about its content.