RenoRun: Severance Packages

RenoRun Inc. is a Canadian technology startup that delivers construction materials to contractors.

Founded in 2016, the company employed a workforce of more than 550 people in July 2022, according to multiple news outlets.

Headquartered in Montreal, Quebec, RenoRun has offices in major cities across North America, including Toronto, Boston, Philadelphia, and Chicago.

According to reports, the company raised $25 million in venture capital from Canadian and U.S. investors in 2019.

RenoRun files for creditor protection

Less than a year after multiple rounds of layoffs, RenoRun Inc. filed for creditor protection in Quebec on March 27, 2023.

According to The Globe and Mail, tech startup has until the end of April, unless formally extended, to provide plans about how it will pay back the debt it owes to creditors.

Under creditor protection, RenoRun doesn’t have to provide non-unionized employees in Canada with the full severance package that they would have been entitled to if the company didn’t declare bankruptcy.

Bankruptcy laws in the country allow companies to favour secured creditors (i.e. banks) over unsecured creditors (employees).

As a result, non-unionized workers at the tech startup will likely receive little to no severance pay. 

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Severance pay when bankruptcy isn’t declared

If RenoRun didn’t declare bankruptcy, non-unionized employees and senior executives in Canada would be entitled to full severance pay when they lose their job due to downsizing or corporate restructuring.

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

Severance is the compensation non-unionized workers in Canada receive from their employer when they are fired without cause. If you are fired for cause, you are likely still entitled to full severance.

LEARN MORE
• Severance for technology industry employees
• Severance for provincially regulated employees
• Severance packages in mass layoffs

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

COVID-19 severance entitlements

All non-unionized Canadian employees at RenoRun are entitled to severance pay during the COVID-19 pandemic if they are terminated or let go from their job.

Unless a company files for creditor protection, employers don’t have the option of “suspending” their legal obligations due to the coronavirus outbreak.

ADDITIONAL RESOURCES
• Severance Pay in Ontario
• Alberta severance packages
• Understanding severance in B.C.

Calculating severance pay

In most cases, employers incorrectly calculate severance pay.

When bankruptcy isn’t a factor, there is a belief that severance pay is one week’s pay, two weeks’ pay, or a week for every year of service an employee has with the company.

While this formula may cover the minimum amount owed by a company as per provincial legislation, our legal system (common law) has determined that a full severance package should be higher — as much as 24 months’ pay.

LEARN MORE
• Layoffs in Canada
• Severance pay during a recession

For non-unionized employees, the main factors of termination or severance pay include age, length of service, position, bonuses, benefits, and the ability to find new work.

To determine how much compensation you could be entitled to, use our helpful Severance Pay Calculator.

Don’t sign on the dotted line!

Do not accept any severance offer, termination papers, or exit agreement that RenoRun may provide you with.

Once you sign back these documents, you eliminate your ability to negotiate a fair and proper severance package.

Long-term disability denied? Don’t appeal

If you are a RenoRun employee in Canada, and your long-term disability claim is denied by your insurance provider, you will likely receive a letter inviting you to appeal the decision.

While it might seem like a good idea to do so, in almost all cases, the appeals process will be handled by the same insurer that denied your claim.

Insurance companies make money by not paying claims. They often use the appeals process (sometimes leading claimants to request multiple appeals) to run out the clock on your ability to file a claim against them to get the money you are owed.

If your long-term disability claim is denied, cut off, or comes under “investigation”, contact Samfiru Tumarkin LLP immediately.

LEARN MORE
• Appealing a long-term disability claim denial
• Disability in the Workplace: Your Rights

Received a severance offer? Speak with an employment lawyer

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

Our lawyers in Ontario, Alberta, and B.C. can tell you if what you have been provided is fair and how to get proper compensation if it falls short of what you are actually owed.

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