Sale of business in Alberta: Rights to severance

Non-unionized workers in Alberta aren’t automatically entitled to severance if their employer sells the business.

However, if the sale of the business results in you losing your job, you are owed severance pay.

Who pays severance if the new owner doesn’t want to keep me?

The responsibility of providing severance pay after an acquisition depends on whether it was an asset purchase or a share purchase.

• Asset purchase: If assets of a business are acquired by another company, the transaction is generally treated as a termination of employment for impacted staff. In this scenario, the “seller” of the business would be responsible for providing severance if the new owner doesn’t want to keep certain workers.
• Share purchase: If a company acquires all shares of a business, it effectively steps into the role of the employer — requiring it to provide compensation if it lets certain staff members go at a later date.

If you lose your job as a result of a sale, and your employer refuses to provide you with severance, contact an experienced Alberta employment lawyer at Samfiru Tumarkin LLP immediately.

READ MORE
• Calgary Co-op acquiring Care Pharmacies: Employee rights
• If Suncor sells Petro-Canada, what rights do employees have?
• Employee rights when a company closes

How is severance pay calculated?

Severance for non-unionized employees in Alberta can be as much as 24 months’ pay.

This includes individuals working full-time, part-time, or hourly in the province.

The amount of compensation you are entitled to is calculated using several factors, including:

WATCH: Employment lawyer Lior Samfiru explains everything you need to know about severance pay on an episode of the Employment Law Show.

To figure out how much you could be owed, use our firm’s free Severance Pay Calculator. It has helped millions of Canadians determine their severance entitlements.

If your company doesn’t provide you with the correct amount, you have been wrongfully dismissed and should contact a member of our team.

We regularly resolve wrongful dismissal claims and can help you secure proper severance.

LEARN MORE
• Severance pay for provincially regulated employees
• Rights to severance for short-service employees
• Severance pay in a recession

The new owner wants to keep me, what happens to my length of service?

If the new company that purchases the business decides to hire an existing employee on, they generally inherit that worker’s length of service.

• Example: You worked at your company’s Calgary facility for 18 years prior to the sale. If the new owner decides to keep you, they must acknowledge your length of service. If you are let go two years later, you are still owed severance pay based on the seniority that you built up before and after the sale.

However, recognition of your length of service can depend on whether the business purchase is an asset purchase or share purchase.

Once you receive an employment offer from the new owner, review the contract carefully before accepting it. Employers might attempt to get out of recognizing your length of service in the new agreement.

Not only could this affect the amount of severance you receive if you are fired in the future, but it would also limit the entitlements of your total compensation package.

If you are unsure about what you are signing, an experienced employment lawyer at Samfiru Tumarkin LLP can review the contact and ensure it contains the correct clause to protect your seniority.

The new owner wants me to sign my new employment contract immediately, what should I do?

Employers in Alberta can’t legally force you to sign a new employment contract.

While many workers believe that they need to sign to protect themselves, these agreements almost always benefit the company instead.

Employment contracts often take away protections that would otherwise be available to you.

In addition to trying to get out of recognizing your length of service, the new owner of the business might attempt to add clauses that:

• Limit your rights at the outset of your employment
• Limit your severance package to a few weeks’ pay
• Allow the company to lay you off without penalty in the future
• Allow the company to make changes to the terms and conditions of your employment

Lost your job? Contact an employment lawyer

If you lose your job after your employer sells the business, or for any reason, contact the experienced employment law team at Samfiru Tumarkin LLP immediately.

Our lawyers in Calgary and Edmonton can review your situation, work to secure proper compensation, and ensure that your workplace and human rights are properly enforced.