Ex-RBC foreign workers say contractor controlled their lives
Canadian bank insiders say outsourcing savings not worth the cost
Two IT contractors from India who worked at RBC in Toronto said their lives were tightly controlled by their multinational employer, while they took over the jobs of Canadian bank workers.
"They have a rotation policy, and they make sure you don’t get settled here," said one of the ex-iGATE employees. "You are always threatened that at any time you will be sent back [to India]."
The men, who now have permanent resident status in Canada and new jobs, spoke to the CBC's Go Public under the condition they would not be identified. Go Public first broke the story Saturday of dozens of employees at RBC who were losing their jobs to temporary foreign workers.
The men said they were among a group of approximately 200 Indian nationals shuttled back and forth between Canada and India, while doing work for Canada’s largest bank between 2008 and 2012.
"That threat is always there, so in a way you will not be able to even concentrate on your work."
One of the workers said, at one point, he and his family were forced to get on a plane to India with little notice, right after his wife had given birth.
"That manager was very blunt and rude, he didn't even give me much time to explain," he said.
The workers said Canadian bank employees lost their jobs in the process and they felt badly about that.
Didn't come to take jobs
"We used to hear about people getting sacked. We as persons didn't come to snatch anybody's job," said one of the men. "I can put myself in their shoes. It is like someone coming into your home and taking over."
They both said their employer brought them to Canada under the controversial Temporary Foreign Worker Program.
iGATE told Go Public it rotates its "global workforce" through Canada using that program and another type of work visa called intra company transfers, which it can do as it has Canadian sales offices.
"I was travelling with my family," said one of the men, whose two children were born in Canada. "It was a dream to come here."
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However, several immigration lawyers told Go Public it is against federal rules for foreign workers to come in en masse and take Canadian jobs, no matter what type of visa they have.
"There are legions of Canadians qualified, willing and available for work if they knew the jobs existed. There’s something that needs to be dramatically overhauled here nationally," said Richard Kurland, an immigration lawyer from Vancouver.
He and two colleagues are now preparing to launch a class-action lawsuit on behalf of affected Canadian bank workers.
The iGATE workers’ stories support what dozens of bank employees and contractors have told Go Public, that foreign contractors from India are now cycling through all the major banks, for months or years at a time, displacing more and more IT staffers and local contractors.
'It's not Canada'
"It's India operating on different soil. It’s not Canada," said a former senior bank executive, who is now a consultant. "The banks are losing control of their business."
Dozens of bank insiders said the outsourcing companies getting the big contracts are Tata Consultancy Services, iGATE, IBM Global and Mahindra Satyam.
"It’s the elephant in the room that’s finally being talked about," he said, adding he was upset to learn RBC paid iGATE more than $100 million in 2012, according to U.S. securities filings.
"Who earned the right to take $100 million of Canadian loyalty and send it to India?"
He and several other bank officials spoke to Go Public on the condition of anonymity.
"Just on my floor there is at least a dozen or so iGATE people," said a current RBC manager.
He said RBC executives told managers, "You can only hire a Canadian if you can show that iGATE can’t supply the worker for you."
RBC head apologizes
Meanwhile, in response to Go Public's story and the ensuing reaction about iGATE outsourcing, RBC CEO Gord Nixon is now apologizing to staff and customers.
"Despite our best efforts, we don't always meet everyone's expectations, and when we get it wrong you are quick to tell us. You have my assurance that I'm listening and we are making the following commitments," he wrote in an open letter to Canadians issued Thursday.
"First, I want to apologize to the employees affected by this outsourcing arrangement as we should have been more sensitive and helpful to them. All will be offered comparable job opportunities within the bank.
"Second, we are reviewing our supplier arrangements and policies with a continued focus on Canadian jobs and prosperity, balancing our desire to be both a successful business and a leading corporate citizen."
He also said RBC will keep its call centres in Canada.
Prime Minister Stephen Harper, taking questions Thursday afternoon at an event in Calgary, expressed concern about the issue.
"We are obviously concerned about some particular stories that have surfaced," Harper said. "I'm not going to comment on those, but I can tell you we certainly have been looking into those and other cases like them and we will be in very short order bringing in a series of reforms that we have been developing to make sure this program is serving its purpose."
All banks involved
Meanwhile, several staffers at other Canadian banks have told Go Public they are upset about how outsourcing to foreign companies is affecting them.
"We have many foreign workers that have displaced Canadian jobs," said one 25-year veteran at the Bank of Montreal. "The departments run by [foreign vendor] IBM Global Resources are divided into two teams – onshore and offshore. The onshore team is brought into Toronto for a year or two and then they cycle back to India and new people come."
TD recently terminated several dozen IT workers including Juan Terrazas, from the Toronto area, after temporary foreign workers showed up to learn the ropes.
"I had to train one of the guys to do the job I was leaving," said Terrazas.
"One thousand-plus employees at different CIBC locations will be out of jobs by October 2013," claimed an email from a group of CIBC employees. "India employees are already in Toronto and are job-shadowing us."
The iGATE workers who spoke to Go Public said they lived with the threat of having to pay a stiff fine if they tried to resist going back to India when they were ordered to.
The company would require a family member to co-sign and if they didn't return to India, the family member would have to pay.
They said their contracts also barred them from applying for permanent residency in Canada. If they breached that, they or their family member in India would owe the company the equivalent of $6,000.
'Indentures' Indian relatives
"Punishment for legally applying for permanent residency after a couple of years is off the scale and it's unenforceable in a Canadian court of law," said Kurland.
He said temporary foreign workers have the legal right to apply for permanent resident status after being in Canada a minimum of one year.
"A contract that in effect indentures a human being abroad [family member] based on the performance of the foreign worker in Canada is scandalous," said Kurland.
A spokesperson for the office of Human Resources and Skills Development Minister Diane Finley indicated her department is concerned about the situation with foreign workers.
"Employers in Canada are subject to Canadian labour laws and must adhere to our high labour standards. Officials are investigating recent reports concerning labour market opinions granted to iGate and will look into any evidence that the program is being misused," said Alyson Queen.
The former bank executive said he tried to hire an iGATE worker a few years back, but the man said he could not accept.
"He said I can’t switch jobs, because my family would pay a penalty in India," the executive said.
iGATE did not respond to Go Public's questions about why it restricts its foreign workers from applying to become Canadian residents.
Indian company profits
The workers said iGATE makes a bigger profit by sending workers home periodically, because there they can pay them much lower wages.
Figures obtained by Go Public suggest RBC pays iGATE $5,800 per month, on average, for each low to mid-level worker it uses for a particular IT contract. That’s $69,600 per year.
The workers Go Public spoke to said they were more highly skilled than average. iGATE paid them $63,000 per year while working in Canada and $12,000 for the same work in India.
The RBC manager confirmed the bank pays a set amount per worker, per job, but they don’t keep track of who is here and who is in India.
"The banks hire offshore firms that work their guys like slaves in India and the profit margins are huge [for the outsourcing company]," said the former bank executive.
Several people said an average Canadian IT worker would be paid $80,000 to $100,000 for the same work.
"A lot of RBC employees like myself would say there are no savings," said the manager, who explained two foreign contractors are often needed to do the work of one experienced employee.
"It’s not really nearly as efficient and they think it is, and it’s a bit of a scam."
Jobs not coming back
Several bank employees and contractors expressed similar frustration.
Whatever money the banks save is eaten up, they believe, because they are dealing with foreign companies whose workers are often not up to speed.
"These large institutions have all turned their backs on the capability of Canadians and hired foreigners — for millions — that know nothing about the systems and technology and can’t find the water cooler. It’s out of control," said the former executive.
"This is really sad because these jobs will never come back," said another Canadian IT contractor who has worked at banks for several years. "Canadian employers are getting drunk on this."