The Ontario Labour Relations Board ruled that a staffing firm could not charge four former temporary employees C$30,000 (US$23,848) each for not staying on as temps for two years. The company noted the decision relates to an older version of its employment contract that is no longer in use.

FDM Group’s business model includes training employees in IT skills and then placing them with client companies. In exchange, the temporary workers agree to remain on an assignment with FDM for two years. Workers agree up front to pay C$30,000 if they leave early.

However, the Labour Relations Board found the amount represented a fee charged to employees that was not allowed under the province’s Employment Standards Act.

In its decision, the board said:

“It may be that FDM is a different type of temporary help agency than most, in that it provides training to assignment employees and pays them wages during the training period. FDM may indeed be subject to some losses (pecuniary and/or reputational) when assignment employees depart the agency, whether during an assignment to a client or at some point before the agency has had the opportunity to recover its ‘investment’ in the employee or to return a reasonable profit from that investment. However, the manner in which it has chosen to recover from employees ‘damages’ to which it feels entitled is prohibited by the ESA.”

The four workers received training that lasted from between 14 weeks and 16 weeks, and all four were paid during that time. The employment periods for all four took place at times between 2018 and 2019.

In one case, a worker was on assignment for 23 months before being released by the client company for reasons not due to performance. The worker was allegedly offered another assignment, although the worker disputed this. In all cases, the workers were required to pay the full C$30,000 regardless of how long into their assignments they were.

Here is the full text of the response sent by an FDM spokesperson to SIA:

“Although FDM is disappointed with the outcome, we respect the decision and are committed to complying with applicable laws.

“It is important to note that the OLRB’s decision relates to an older version of our employment agreement that is no longer in use. We extensively amended the agreement back in August 2019 and since such time the updated version has been compliant with the Employment Standards Act and in line with the recent OLRB decision with regard to fees.

“Additionally, the OLRB’s decision recognizes that FDM offers a different type of program in the industry and that we are not a standard temporary help agency. We are pleased that the Board acknowledges that FDM may indeed suffer financial loss and reputational damage when our consultants choose to leave us before we have received the mutually agreed benefit. FDM respects the freedom of parties to voluntarily enter contracts and the rule of law that affords a legal remedy to recover damages in the event of a breach.

“We have a clear and unwavering commitment for all trainees and consultants to be treated and compensated fairly and in compliance with all applicable laws and regulations. We are also proud to be playing such an important part in the IT and business consulting workforce in Ontario as well as across Canada. We welcome all qualified applicants to join the FDM journey to be a part of this successful and award-winning program.”