Rexall and Well.ca being acquired by Birch Hill: Employee rights

Toronto-based private equity firm Birch Hill Equity Partners is buying Rexall Pharmacy Group and online health retailer Well.ca from McKesson Corp., a Texas-based healthcare services company. While the financial terms of the deal were not disclosed, McKesson stated that the sale would allow it to focus on expanding its oncology and biopharma divisions.

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Details

• Rexall operates 385 pharmacies across Canada, employing around 8,000 people.
• Well.ca offers over 40,000 health and wellness products through its online platform.
• Birch Hill Equity Partners, known for its past investments in companies like Mastermind Toys and Sleep Country, will now gain a foothold in the Canadian healthcare and retail market with this acquisition.
• McKesson will remain as the wholesale distribution supplier for both Rexall and Well.ca.

Who pays severance if Birch Hill doesn’t keep Rexall or Well.ca employees?

In Canada, the responsibility for severance pay when employees lose their jobs after an acquisition depends on the structure of the business sale. If Birch Hill does not keep certain Rexall or Well.ca employees, the severance obligations can differ based on whether the acquisition is an asset purchase or a share purchase.

• Asset Purchase: If Birch Hill acquires only certain assets of Rexall or Well.ca, this is generally considered a termination of employment. In this case, McKesson (the seller) would be responsible for providing severance to employees who are not offered positions with Birch Hill.
• Share Purchase: If Birch Hill acquires all shares of Rexall or Well.ca, they effectively step into the role of the employer. This means there is no termination of employment, and employees continue their roles without severance, unless Birch Hill decides to end their employment later.

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

What happens if you decline a job offer from Birch Hill?

If Birch Hill offers you a job with significantly different terms, such as altered hours or pay, you may be entitled to full severance if you choose not to accept the offer.

Even if you decline without a strong reason, you may still receive severance, but it will likely be limited to your minimum entitlements.

LEARN MORE
• 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 Birch Hill change Rexall or Well.ca employees’ jobs?

In Canada, non-unionized employees cannot be forced to accept significant changes to their job without consent. If Birch Hill imposes major changes, such as reduced pay or altered hours, you may have grounds for a constructive dismissal claim. This allows you to leave the job and pursue full severance.

Always consult with an employment lawyer at Samfiru Tumarkin LLP before your resign or accept a job offer after an acquisition.

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 Rexall and Well.ca staff

If you work for Rexall or Well.ca and you receive a new employment contract, 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.

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.