The McDonald's logo is pictured outside a McDonald's restaurant in the Fillmore District of San Francisco, California January 30, 2013. McDonald's popular $1 McDouble cheeseburger, which has lured customers to the Golden Arches since 2008, is getting hard to sustain as rising beef prices threaten the company's profit margin. Picture taken January 30, 2013. REUTERS/Robert Galbraith Robert Galbraith/Reuters
A company that recruits temporary foreign workers on behalf of Canadian employers has filed a lawsuit against McDonald's Canada, alleging breach of contract and defamation of character.
Graeme Young, the Manitoba lawyer representing Actyl Group Inc., which has recruited temporary foreign workers for McDonald’s in Western Canada, told CBC News the lawsuit was filed in a Winnipeg court Thursday.
In the company's statement of claim, Actyl alleges McDonald's Restaurants of Canada Ltd. breached its contract when it failed to pay the agency certain "service fees" for immigration services it provided the franchisees.
Actyl alleges McDonald's Canada was "unjustly enriched" when it deducted money from the paycheques of its foreign workers and pocketed the deductions instead of paying the recruiting agency directly.
Young told CBC News the services fees are for "certain immigration services that Actyl may provide to employees of McDonald's with respect to the Alberta Immigrant Nominee Program, the Provincial Nominee Program, or other work permit, or permanent residency applications."
Actyl alleges that McDonald's Canada had also agreed to pay the agency "a $500 CDN bonus" for "every successful permanent resident application" that was granted to its foreign workers.
"The defendant failed to remit to the plaintiff timely payroll deductions, deducted from the employee's payroll, and refused or neglected and continues to refuse or neglect to remit those amounts due and owing under the agreement," says Actyl's statement of claim.
Young could not say how much money McDonald's Canada allegedly owes Actyl in unpaid fees, but he told CBC News it's an amount "they could take out of their coffee fund or petty cash."
In response to a request for comment, a media relations spokesperson for McDonald's Canada referred CBC News directly to Actyl.
The spokesperson did not say in their email when McDonald's Canada would file a statement of defence.
None of the allegations have been proven in court.
McDonald's conference call
Actyl also alleges that comments made by McDonald's Canada CEO John Betts during a conference call with franchisees to defend his decision to suspend its use of the program were intended "to impugn the good character, credit and reputation" of the agency "in a reckless, deliberate and purposeful fashion."
A tape of the conference call was given to CBC News.
McDonald's Canada put its Temporary Foreign Worker Program on hold while a third party conducted an audit on its use of the plan.
That was before the federal government imposed a temporary moratorium on the fast-food sector's use of the program.
The moratorium has since been lifted, but new restrictions were imposed when the government overhauled the program in June.
"John Betts made statements of a detrimental nature on a conference call, where it was reasonable to conclude that there was no expectation of privacy," the statement of claim said.
CBC's Go Public team aired a portion of the teleconference call, during which Betts also referred to news coverage of McDonald's use of temporary foreign workers as "bullshit."
Young told CBC News his client was not on the conference call with Betts and the franchisees.
Actyl alleges "the comments attributed" to the CEO for McDonald's Canada "were meant to mean and were understood to mean that the plaintiff was not a reputable business, that it did not have sufficient safeguards in place, that it took advantage of the Temporary Foreign Worker Program for its own material benefit."
"The defamatory words expressed by the defendant and its unlawful defamatory and disparaging conduct caused irreparable harm to the plaintiff's credit, character and reputation amongst the Plaintiff's business partners domestic and foreign."
Young said that as a result, his client was forced to close its regional office and scale back on employees.
He added that Actyl still has Labour Market Opinions, now called Labour Market Impact Assessments, pending for foreign workers it recruited for McDonald's Canada.
These are the forms employers must fill out to prove the need to hire a foreign worker over a Canadian.
In April, CBC News reported that foreign workers from Belize hired by Actyl claimed the agency made them several promises it did not keep.
Linda West, Actyl's president, later issued a press release rejecting the allegations.