Ok, one thing, you can not apply for FSW under CEC. Those are two different immigration classes.
If he applied under CEC, that is as somebody who has been working a skilled job on a temporary work permit for 2 years, him leaving Canada will not affect his application. You can even apply under CEC up to a year after leaving Canada. All he'd have to do is advise CIC that he's left Canada and please contact him at another address.
If he applied under FSW category 3 as somebody who has worked in Canada for 12 months, there is again no requirement for him to stay in Canada during the processing of the application. For that, he would need to have a valid work permit at the time he applied and that's it. Again, he would just need to inform CIC if he moves so they know where to contact him.
He can absolutely try applying for a new LMO with the proof of advertising and see if it works out this time. His work permit is still valid so I do believe if he has an application going at the time it expires, he's under pending status until they say no. He should phone CIC and clarify though. If he wants to wait in Canada for his FSW or CEC whichever application he did to go through, he can apply to change status to visitor.
Yes Leon is absolutely right!
No need to panic - but need to act and get a thorough application filed! The employer should have checked HRSDC's homepage before filing the last application.
It's pretty straight forward - the position needs to be offered on the National Job Board for at least 2 weeks. Depending on the NOC classification of the job offer it also has to be advertised in a reagular newspaper or online - for example on workopolis for another 2-3 weeks. The longer the better by the way!
Then they have to show why the Canadians and PR holder who applied for this job don't qualify! This has to be done with sense and cautiousness. Just saying "my temporary foreign worker has been doing the job for 2 years and only he has the necessary qualification" isnt enough. Please see HRSDCs homepage for more details.
This will take approx 3-4 weeks. Then the employer will hand in a new LMO application. While the LMO application is being reviewed by HRSDC, your friend can already hand in his application for a new Work Permit at CPC Vegreville and ask for concurrent processing. He might have to show (or explain in a cover letter) that his employer applied for an LMO and that they will be handing in the LMO as soon as it's processed. The current processing time is around 95 days (3 months plus a bit).
As long as your friend applies for the TWP renewal
at least 30 days before his current WP expires he'll have "implied status" until CPC Vegreville is making a decision about the Work Permit renewal.
Some people use these timelines to work in their favour:
1. apply for the LMO as soon as possible and do this properly (waterproof!)
2. hand in your WP renewal application to CPC Vegreville 5-6 weeks before your current visa expires. (Make sure you send it via courier and you have proof about the date of delivery in Vegreville!!)
3. This will buy you about 2 months of implied status until a decision is made.
4. remember not to leave the country while you are on implied status - this will make your efforts redundant as you lose implied status when leaving the country!
Do some reading on the CIC homepage.
Read the Operational bulletins and manuals. You'll find them with the SEARCH function on CIC's homepage
Good luck!