Barry Sherman’s drug company Apotex bought by SK Capital: Employee rights

A major Canadian pharmaceutical company is coming under new management.

Apotex Pharmaceuticals Holdings Inc., founded by the late billionaire Barry Sherman in 1974, is being purchased by SK Capital Partners LP, a New York-based private investment firm.

In a news release on September 28, 2022, Aaron Davenport, Managing Director at SK Capital, said the firm feels “incredibly privileged” to have the opportunity to support Apotex.

“Apotex is a dynamic, entrepreneurial company with a strong track record of success, underpinned by its diversified product portfolio, robust pipeline of new launches and iconic brand,” he said.

The value of the deal has not been disclosed as both companies await regulatory approval.

With a significant presence in North America and India, Apotex employs a global workforce of nearly 8,000 people.

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Who pays severance if SK Capital doesn’t want to keep certain Apotex employees?

If the sale of Apotex to SK Capital results in you losing your job, then Apotex must provide you with full severance pay.

In Canada, the seller of the business is responsible for providing proper compensation to affected staff.

If you do receive an employment offer from SK Capital, and have a good reason for why you don’t want to accept it (i.e. different hours or pay), you can still get full severance pay from Apotex.

Even without a good reason you can still get severance, but you would only receive your minimum entitlements.

LEARN MORE
• Sale of business in Ontario: Rights to severance
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LISTEN: Employment Lawyer Mackenzie Irwin identifies workplace rights for Apotex employees during the drug company’s sale to SK Capital, on the Employment Law Show.

Can SK Capital make changes to Apotex workers’ jobs?

Non-unionized employees at Apotex don’t have to accept major changes to their job that SK Capital might try to enforce.

Large modifications such as a demotion, cut in pay, reduction in hours, or negative change to commission are illegal.

When the terms of your employment are significantly changed, the law allows you to resign from your job and seek full severance pay through a constructive dismissal claim.

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• Do I get severance if I quit?

New employment contracts for Apotex employees

If you are an Apotex employee, don’t accept a new employment contract from SK Capital before having it reviewed by an employment lawyer at Samfiru Tumarkin LLP.

Employment contracts often take away protections that would otherwise be available to you, including:

• Eliminating past service: A new owner might attempt to reduce or eliminate your years of service with your previous employer. Don’t sacrifice your seniority. Length of service is a key factor when determining how much severance pay you are entitled to.
• Termination clause: A new owner could use this clause to reduce your severance entitlements to the bare minimum. Instead of months of pay, you might only receive a few weeks’ pay if you are fired or let go.
• Ability to make changes: A new employer might try to work in an agreement that allows them to change aspects of your job (i.e. duties and pay) without your permission or lay you off without any penalty.

Your employer can’t force you to sign a new employment agreement, especially one that diminishes your rights.

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Do Apotex staff still have the same workplace rights with a U.S.-based owner?

Yes. Companies outside of Canada can’t use employment contracts to get out of Canadian employment standards legislation.

While SK Capital is based in the U.S., the private investment firm still has to adhere to the same employment laws that Apotex was required to follow for its Canadian staff.

Termination agreements for Apotex employees

In Canada, non-unionized employees and senior executives at Apotex are owed full severance pay when they lose their jobs due to downsizing or corporate restructuring.

Severance can be as much as 24 months’ pay, depending on a number of factors.

LEARN MORE
• Severance for provincially regulated employees
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• Employment lawyer on worker rights in the event of a layoff

WATCH: Employment lawyer Lior Samfiru explains why you are still owed severance if you have been downsized on an episode of the Employment Law Show.

Before you accept any severance offer, have an experienced employment lawyer at Samfiru Tumarkin LLP review it and your employment contract.

We can tell you if what you have been provided is fair and how to get proper severance if it falls short of what you are actually owed.

If you don’t receive the full amount, which happens often, you have been wrongfully dismissed and are entitled to compensation.