Controversial RBC outsourcing made easier by government regulations: observers

Observers say the controversy over the Royal Bank of Canada’s decision to outsource dozens of Toronto jobs is part of an alarming trend bolstered by government policy.

Immigration law expert Audrey Macklin says the government encourages companies to employ temporary foreign workers either directly or indirectly by processing their immigration documents faster and by allowing companies to pay those workers up to 15 per cent less than Canadians.

She says a company like RBC is simply responding to incentives the government has created.

Human Resources minister Diane Finley has said the Temporary Foreign Worker Program is only to fill “acute labour needs” when Canadians aren’t available for the work required.

But NDP Leader Tom Mulcair says the Conservative government has done nothing to stop a situation like RBC’s, which he says is depriving Canadians of their livelihoods.

RBC (TSX:RY) has repeatedly said it did not hire foreign workers to take over the job functions of current employees, but said it used the services of outside companies to improve “operational effectiveness.”

The bank says it plans to discuss the situation with government officials.

RBC also says it is working to find suitable roles for the employees whose jobs are being outsourced.

The bank said it recognized the impact such an arrangement has on its employees and adds that it is helping “retrain, redeploy” and help its employees transition to other positions.

Rob Babin, a Ryerson University professor and outsourcing expert, says global outsourcing is not a new phenomenon but needs to be managed in a way that allows companies to effectively care for their existing workers.

The federal government is investigating the external contractor being used by the Royal Bank.

A spokeswoman for Human Resources Minister Diane Finley says officials are currently reviewing application documents submitted by iGate, the multinational company which has brought in workers to provide certain technical services for RBC.

Alyson Queen says the investigation is based on apparent discrepancies between public statements by RBC and information which had previously been provided to the government by iGate.

Many Canadians have expressed outrage and even threatened to close their accounts upon learning that Canada’s largest bank had outsourced the jobs of 45 Toronto employees to an external supplier.

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