The British Columbia Court of Appeal has set aside a lower court’s finding that Mac’s Convenience Stores Inc. could be held vicariously liable for recruitment fees charged to temporary foreign workers by an immigration consultant it hired, ruling there was no agency relationship in law between the company and the recruiter.
In a decision released Aug. 8, the court allowed Mac’s appeal on two issues arising from a certified class action brought by four temporary foreign workers recruited from Dubai to work in the company’s Western Canada stores. The workers allege they were charged between $7,500 and $8,000 by Overseas Immigration Services Inc. and related companies for jobs, contrary to federal program rules and provincial employment standards legislation.
The trial judge had concluded that Overseas was acting as Mac’s agent in recruiting the class members and that Mac’s could therefore be vicariously liable for any breach of fiduciary duty by the consultant. She also found that a subclass of workers who arrived in Canada to find no jobs waiting for them had no duty to mitigate their losses.
The majority of the appeal court disagreed on both points. Writing for the majority, the court said the trial judge applied a “colloquial” concept of agency rather than the strict legal test, which requires proof that an agent has actual or apparent authority to contractually bind the principal.
“Nothing in the forms grants Overseas the power to contractually bind Mac’s, which is a pre-requisite to the establishment of an agency relationship,” the court wrote, referring to Service Canada documents in which Mac’s named Overseas as its representative in the federal Temporary Foreign Worker Program.
While Mac’s delegated significant recruitment tasks to Overseas — including screening candidates, arranging interviews and facilitating travel and accommodation — the company retained control over identifying candidates to be offered jobs and signing employment contracts, the court found.
No apparent authority before fees paid
The workers also failed to establish that Overseas had apparent authority to act on Mac’s behalf before the disputed fees were paid, the majority held. Apparent authority arises when a principal represents to a third party that an agent has authority, the third party relies on that representation, and suffers a loss.
Here, the court found, “the wrong they complain of, the payment of such fees, thus occurred prior to the parties even being introduced to Mac’s as a potential employer.”
As a result, the trial judge’s conclusion that Mac’s could be vicariously liable for Overseas’ actions based on agency “cannot stand,” the court said.
Duty to mitigate applied
On the mitigation issue, the court ruled that members of the subclass whose fixed-term contracts ended early were subject to the usual duty to seek other work, unless the contract expressly removed that obligation.
The contracts in question did not oust the duty, the majority found. In fact, they included provisions allowing workers to change employers under certain conditions, with the new employer assuming responsibility for return travel costs.
While the court acknowledged the “significant” practical barriers to mitigation for workers tied to a specific employer and location under their work permits, it said those challenges go to the assessment of damages, not the existence of the duty itself.
“It is important nonetheless to distinguish between the duty to mitigate and the capacity for mitigation,” the court wrote. “It will be Mac’s’ burden at trial to prove that the employee has not taken reasonable steps to avoid loss.”
Partial dissent
Justice Dickson concurred with the majority on mitigation but dissented on the agency finding. She concluded the trial judge had correctly applied the legal test and reasonably found that Overseas had actual and apparent authority to bind Mac’s in the multi-step hiring process under the Temporary Foreign Worker Program.
The class action, filed in 2015, remains ongoing on the remaining issues, including whether Overseas breached fiduciary duties and whether Mac’s is liable on other grounds such as breach of contract and breach of the duty of honest performance.
For more information, see Mac’s Convenience Stores Inc. v. Basyal, 2025 BCCA 284 (CanLII).
