Rights When a Business Is Sold | Employment Law Show TV – S3 E32

Episode Summary

EMPLOYEE RIGHTS WHEN A BUSINESS IS SOLD, a termination vs. a layoff, federally regulated severance packages, and more on Season 3 Episode 32 of the Employment Law Show with employment lawyer Lior Samfiru, Partner at Samfiru Tumarkin LLP.

Watch above to discover your workplace rights and learn everything you need to know about employment law in Ontario, British Columbia, and Alberta, on the only employment law show on both TV and radio in Canada.

Episode Notes

New management led to significant changes to a job

I had been working at a company for 15 years when new management came in and started taking away my responsibilities, but did not change her pay. Can they do that?

If your job contains certain responsibilities, and your employer takes those responsibilities away, that’s a change to your job, and that’s a constructive dismissal. Your employer is not allowed to make significant changes to your job, even if that means you’re doing less work. You have a right to treat that as a constructive dismissal and leave with your severance.

Segment starts at 1:27

CALL: Returned from medical leave and put on a PIP

I took a year off work for hip surgery. When I returned to work, I was put on a performance improvement plan (PIP). How much severance pay would I be owed if I fail to satisfy their plan?

After 19 years with the company, there is no way the company can let you go ‘for cause’ if you fail the PIP. If they do decide to let you go, you would be owed severance. Based on your information, your severance pay would be calculated at 18 months’ pay.

Segment starts at 5:02

Termination versus Layoff

If I’ve technically been “laid off”, am I still allowed to ask for severance pay, or is an employer within their right to say no? What’s the difference between a termination vs. layoff?

The difference between a layoff and a termination is that a layoff is often viewed as something that’s temporary, whereas a termination is permanent. With a regular termination, you are owed severance based on your age, position, and length of employment. Even if your layoff is ‘temporary’, you have the right to treat that layoff as a termination and get your severance.

Segment starts at 8:11

Employee Rights When a Business is Sold

1️⃣ When a business is sold, do the employees automatically get severance?

No, severance is not paid automatically. You can get severance if, as a result of the sale, you are out of a job. The company that sold the business would be responsible for paying your severance.

Segment starts at 10:28

2️⃣ What happens to an employee’s length of service if they continue working?

If the new company that purchased the business hires you on, they also inherit your length of service. If you worked for the previous company for 15 years, the new company needs to acknowledge that length of service. If you are let go, you will be owed your full severance based on the time you had with the previous company well.

Segment starts at 11:58

3️⃣ Does it matter if the new company wants the employee to sign a contract of employment?

The problem with signing a new employment contract is that the new company can contract out of your service. If you sign an agreement with the new company that says they are not going to acknowledge your past service, you’ve given up that service. Your employer can’t force you to sign a new employment agreement, especially one that diminishes your rights.

Segment starts at 13:24

4️⃣ What happens if an employee does not want to take a job with the new company, are they entitled to anything? Is that considered a “resignation?”

If you have a good reason as to why you are not accepting the position with the new company (different hours or pay), then you can get your full severance from the company that sold the business. If you don’t have a good reason, you can still get severance, but you won’t get your full severance, you’ll get your minimum entitlements only.

Segment starts at 13:47

LEARN MORE
• Who pays severance when a business is sold in Ontario?
• Sale of business in Alberta: Employee rights
• How does severance work when a B.C. business is sold?

Severance for long-service employees

I am 47 years old, and I have been with my company for 23 years. I was let go without any reason, and given 10 months’ pay for severance. Am I owed more?

We plugged your information into the Severance Pay Calculator and based on the facts of your situation, you are actually owed 18 to 24 months’ pay. Try our free and anonymous Severance Pay Calculator.

Segment starts at 16:00

CALL: Returning to work after an injury

I was off for a month after a soft tissue injury. Following rehabilitation, I returned to work on modified duties. I’m supposed to return to regular duties soon, but I don’t feel ready yet. How do I stay on modified duties?

If you’re not ready to return to your regular duties at work, speak to your doctor and let them know. Get a doctor’s note explaining that you’re not yet physically able to return to your regular duties, and provide an estimation of how much longer you’ll need to be on modified duties. If the company refuses to accommodate you, that’s a human rights violation, and you should speak to an employment lawyer at Samfiru Tumarkin LLP.

Segment starts at 20:10

CALL: Severance pay for federally regulated worker

I was just let go on Monday after 6 years at the company. Because I was at a federally regulated business, I was given 2 weeks in lieu of notice and 2 days’ pay for every year of service. Is that enough severance pay? I’m 53 years old.

Whether you are federally regulated or provincially regulated, your severance entitlements are the same under common law if you are let go. Your minimum entitlements may be two weeks’ pay, plus an additional two days per year of service, but that’s irrelevant because your full entitlements are much more.  Using the Severance Pay Calculator, we estimate that you would be owed approximately 8 months’ pay, which is much more than you were offered.

Segment starts at 23:39

Severance for employees of small businesses

If a company’s payroll is less than $2-million per year, are they exempt from paying their employees severance pay?

An employee’s minimum entitlements may depend on the size of a company’s payroll, but that’s irrelevant because your full entitlements have nothing to do with the size of the company’s payroll. For this reason, you get severance even if you work for a company with a small payroll, the same severance as someone who works for a large company.

Segment starts at 26:05

Non-compete clauses in employment contracts

I just gave my employer of 4.5 years my notice of termination. However, I just read my original employment contract, and discovered that I agreed to a non-compete clause! Is it enforceable?

In most cases, non-compete obligations are not enforceable, except for employees in very senior roles. But just because it’s not enforceable, that doesn’t mean the company is not going to try to enforce it, and if they do, they’ll take legal action against you. The bottom line is, it may not be enforceable, but the real question is will the company try to enforce it, will they take legal action against you? You have to take it seriously. Speak to the company and see if they will release you from the non-compete. You can also negotiate a shorter term for a non-compete obligation before you sign an employment agreement.

Segment starts at 27:12

Next Episode: Employment Law Show S4 E1 – Top Myths of Termination

Previous Episode: Employment Law Show S3 E31 – 5 Things Employment Lawyer Can Do