Employment Law

Broadcom to acquire VMware for $69B: Employee rights

A close-up photo of a green and white computer ram stick. (Photo: S. Tsuchiya / Unsplash)

Still navigating some regulatory hurdles, Broadcom and VMware are confident that their US$69-billion merger will get the green light.

In a recent news release, VMware reiterated that both companies expect the blockbuster deal, which was announced back in May 2022, to close on Oct. 30.

The announcement comes as reports claim that China’s State Administration of Market Regulation is considering delaying Broadcom’s acquisition of VMware — despite the company receiving approval from regulators in nine jurisdictions, including Canada.

If the deal gets the thumbs up, the U.S. semiconductor giant will purchase the cloud computing company in a cash-and-stock transaction valued at approximately US$61 billion. Broadcom will also assume US$8 billion of VMware’s net debt.

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Following the completion of the transaction, the Broadcom Software Group is set to undergo a rebrand and operate as VMware — incorporating Broadcom’s “existing infrastructure and security software solutions as part of an expanded VMware portfolio.”

In the event that VMware does join the Broadcom family, here are a few things that non-unionized employees in Canada need to be aware of.

Who pays severance if Broadcom doesn’t want to keep certain VMware employees?

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

In Canada, the seller of the business is responsible for providing proper compensation to staff who lose their job.

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

If Broadcom provides you with an employment offer, and you have a good reason for why you don’t want to accept it (i.e. different hours or pay), you might be able to get full severance pay from VMware.

Even without a good reason you can still get severance, but it’s very likely that you will only receive your minimum entitlements.

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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 Ontario, Alberta, and B.C.

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

  • Age
  • Length of service
  • Position at the company
  • Ability to find new work

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 an experienced employment lawyer at Samfiru Tumarkin LLP immediately.

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

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Can Broadcom make major changes to the jobs of VMware employees?

In Canada, non-unionized employees at VMware don’t have to accept substantial changes to their job that Broadcom might try to enforce.

Major modifications, such as a demotion, longer shifts, or reduced pay, are illegal.

When significant adjustments are made to the terms of your employment without your consent, there is a very good chance that you can treat it as a constructive dismissal.

In this situation, the law allows you to quit your job and pursue full severance pay.

If you believe that you have been constructively dismissed, don’t resign before contacting our firm.

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New employment contracts for VMware staff

If you work for VMware in Canada, and you receive a new employment contract from Broadcom, take the time to carefully review it before signing it.

In many cases, these agreements take away key protections that would otherwise be available to non-unionized employees, including:

  • Eliminating past service: The 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.
  • Reducing severance pay: Some employers try to use a termination 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 without cause or let go.
  • Ability to make changes: The new owner might attempt to add a clause that gives them the right to change aspects of your job (i.e. hours or pay) without your permission or lay you off without penalty.

Employers in Canada can’t legally force non-unionized workers to sign a new employment contract immediately or a few days after receiving it.

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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 Ontario, Alberta, and B.C. 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.

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