In RBC hiring scandal, outsourcing firm iGate defends itself

Caught in the eye of a firestorm over accusations of improperly hiring temporary foreign workers to replace full-time staffers at Royal Bank of Canada, IT outsourcing firm iGate Corp. is rushing to its own defence.

“We are in compliance with the local laws of each of the countries where we operate, including Canada,” the California-based company, a publicly listed firm on the U.S. nasdaq stock exchange, said in a statement sent to Global News.

Jason Trussell, a senior vice-president for iGate and regional head for the company in Canada, said the firm is in “full compliance with all Canadian laws,” and that iGate has been recently recognized in a prominent “Best Employer Survey” conducted by Aon-Hewitt.

RBC, the country’s largest bank, has become the target this week of intense popular scorn and political scrutiny because of its relationship with iGate and a possible plan to axe jobs currently held by internal RBC employees in favour of iGate workers.

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The hiring of foreign temp workers to replace long-held domestic jobs at RBC could pose a violation of a government program to bring skilled workers from abroad, a statement from Diane Finley, the Minister of Human Resources and Skills Development, said.

“The purpose of the Temporary Foreign Worker Program is to fill acute labour needs when Canadians are not available for the work required. It was never intended as a means to bring in temporary foreign workers in order to replace already-employed Canadian workers,” a statement from the minister said.

Typically, foreign nationals hired by Canadian companies have to attain a “labour market opinion (LMO)” from HRSDC that validates the need for the service and why Canadians aren’t able to fill the role, as well as a visa.

Alyson Queen, a spokeswoman for Minister Finley said the iGate workers, who number about 45 in all, had received so-called labour market opinion approvals from the department – but those are now being scrutinized.

“An investigation is underway and HRSDC officials are currently reviewing the labour market opinions submitted by iGate in great detail, based on apparent discrepancies between RBC’s public statement and information which has previously been provided to the government.”

“We will fully cooperate with requests from the government for information on this matter,” the statement from iGate said.

RBC has said it has not hired temporary foreign workers to replace existing bank staff.

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Previous reports have suggested the bank planned to eliminate or offshore about 50 technology jobs related to investor services. Unions and other labour groups have long complained that so-called offshoring of jobs to lower-cost countries leads to reduced wages at home as workers here bend to pressures for lower pay.

This isn’t the first time iGate has been tied to controversial hiring practices.

In 2008, the U.S. Department of Justice fined iGate, which at the time was based in Pittsburgh, for unlawfully discriminating against U.S. citizens who had applied for IT jobs. iGate was “expressly” hiring foreign workers with temporary visas.

In the settlement, the DoJ added that it also “requires iGate to train recruitment personnel” and that the department would continue to monitor the company.

Beyond the current arrangement, RBC is an established client of the U.S. outsourcing firm.

In fact, in iGate’s U.S. regulatory filings, the company said RBC is it’s second-biggest customer, accounting for just over $100-million or 11 per cent of the company’s revenues in 2012. The bank has been a client since at least 2010, according to the company’s 10-K filing.

“The services provided to RBC … primarily include consulting, independent verification and validation, application development and maintenance, infrastructure management, BPO and other related IT services,” filings said.

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A statement from RBC’s chief procurement officer said the bank ensured all of its “suppliers” including iGate abided by applicable laws and regulations.

Other clients of of iGate include General Electric, automaker Honda as well as U.S. media giant Time Warner, according to the company’s website. The firm operates in more than 20 countries globally but conducts most of its business operations in India.

In a survey by professional services consultants Aon-Hewitt, the international outsourcer was ranked the No. 2 ‘Best Employer’  in the Greater Toronto Area in the small- to medium-sized company category.

“The way this study works is that we’re actually listening to their employees,” said Neil Crawford, project head for the survey, which is produced in conjunction with Queen’s University School of Business.

“What we’re focusing on is their permanent employees, not their contract or temp employees. If they’re hiring temporary employees, [the study] may have surveyed them but they wouldn’t be considered in terms evaluating whether they should be considered a best employer or not.”

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