Fairfax Financial buys Sleep Country Canada for $1.7B: Employee rights

Fairfax Financial (Fairfax) has completed its acquisition of Sleep Country Canada in a deal valued at $1.7 billion.

This acquisition marks Fairfax’s expansion beyond insurance and into the retail sector.

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Acquisition details

• Fairfax has acquired all issued and outstanding common shares of Sleep Country for C$35 per share.
• The Ontario Superior Court of Justice granted final approval for the deal on Sep. 25, which received 99.93% support from Sleep Country shareholders.
• Sleep Country will delist its common shares from the Toronto Stock Exchange.
• Stewart Schaefer, President and CEO of Sleep Country, expressed satisfaction with the completion of the deal, stating that it “clearly demonstrates the value and strength of our brands and organization.”
• Christine Magee, co-founder of Sleep Country and chair of a special committee that oversaw the negotiations, highlighted that the deal provides “certainty of significant and immediate value to shareholders.”
• Fairfax’s Chairman and CEO, Prem Watsa, added, “We look forward to working with Schaefer and the entire Sleep Country team to further develop this remarkable Canadian success story over the long term.”

WATCH: Employment lawyer Lior Samfiru explains the rights workers have when their employer sells the business on an episode of the Employment Law Show.

Who pays severance if Fairfax doesn’t keep certain Sleep Country employees?

Since this is a share purchase, rather than an asset purchase, Fairfax would generally bear the responsibility for providing severance pay if the company decides to terminate any Sleep Country employees post-acquisition.

The following resources can help you understand the differences between share and asset purchases in B.C., Alberta, and Ontario:

• Employer sold the business in B.C.? Know your rights to severance
• Rights to severance in Alberta when your employer sells the business
• Sale of business in Ontario: Rights to severance

How is severance pay calculated?

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

This includes individuals working full-time, part-time, or hourly in B.C., Alberta, and Ontario.

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

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 seek legal counsel immediately.

Samfiru Tumarkin LLP regularly resolves wrongful dismissal claims and can help you secure proper severance.

LEARN MORE
• Severance for provincially regulated employees
• Rights to severance for tech sector staff
• Severance packages in mass layoffs

Can Fairfax make major changes to the jobs of Sleep Country employees?

In Canada, non-unionized employees are protected from substantial changes to their jobs.

If Fairfax Financial makes significant modifications – such as a demotion, extended hours, or reduced pay – without your consent, these actions may be considered illegal.

Such changes can leads to a constructive dismissal, which give you the right to resign and pursue full severance pay. However, it’s important to get legal advice from our team before resigning in these situations.

ADDITIONAL RESOURCES
• Changes to your employment in B.C.: Your rights
• Job changes in Alberta: What employees need to know
• Can my employer make changes to my job in Ontario?

New employment contracts for Sleep Country staff

If you receive a new employment contract after the Fairfax acquisiton, carefully review it before signing it. These agreements can include clauses that reduce your rights, such as:

• Eliminating past service: The new employer might attempt to disregard your years of service. Don’t sacrifice your seniority. Length of service is crucial in calculating severance pay.
• Reducing severance pay: A termination clause could limit your severance to the legal minimum, drastically reducing your compensation. Instead of months of pay, you might only receive a few weeks’ pay if you are fired without cause or let go.
• Allowing changes to your job: A clause might be included giving the employer the right to modify your job (e.g. hours or pay) without your consent, or lay you off without penalty.

Remember, in Canada, employer can’t legally force non-unionized employees to sign a new employment contract immediately or within a short timeframe. Take your time to review it carefully with an employment lawyer at Samfiru Tumarkin LLP.

SEE ALSO
• Starting a new job? Here’s how an employment contract could limit your rights
• Employment Law Show: 5 things to know about employment contracts
• Employment Law Show: Things to never do before seeking legal counsel

Received a job offer? Speak with an employment lawyer

Before accepting a new employment contract, have the experienced employment law team at Samfiru Tumarkin LLP review the agreement to make sure your workplace rights are protected.

Our lawyers in B.C., Alberta, and Ontario have successfully represented tens of thousands of non-unionized individuals.

We can help you better understand the terms of the contract and advise you on how best to navigate the situation.