Employment Law

Sale of business in British Columbia: Rights to severance


In British Columbia, when an employer sells a business, non-unionized workers aren’t automatically entitled to severance pay.

However, if the sale results in you losing your job, you are owed compensation.

Who pays severance if the new owner doesn’t want to keep me?

The seller of the business owes you severance pay if you lose your job as a result of the sale.

  • Example: West Fraser sells its Williams Lake sawmill to Canfor. If you work at the sawmill, and Canfor doesn’t want to keep you as an employee, then West Fraser must provide you with a severance package.

If you receive an employment offer from the new owner, 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 the company that sold the business.

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

If Suncor sells Petro-Canada, what rights do employees have?
West Fraser cutting 147 jobs, reducing production and B.C. mill shifts
Employee rights when a company downsizes
• Employee rights when a company closes

How is severance pay calculated?

Severance pay is based on your specific circumstances. These factors include your:

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

Our Severance Pay Calculator can help you figure out how much compensation you are owed.

An employment lawyer at Samfiru Tumarkin LLP can also review your situation to ensure you are receiving proper severance.

Severance Pay in a Recession
Do I get severance if I quit?

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.

The new owner wants to keep me, what happens to my length of service?

If the new company that purchases the business decides to hire an existing employee on, they also inherit that worker’s length of service.

  • Example: You worked at your company’s Burnaby facility for 15 years prior to the sale. If the new owner decides to keep you, they must acknowledge your length of service. If you are let go two years later, you are still owed severance pay based on the seniority that you built up before and after the sale.

If you receive an employment offer from the new owner, review the contract carefully before accepting it. Employers might attempt to contract out of recognizing your length of service in the new agreement.

Not only could this affect the amount of severance you receive if you are fired in the future, but it would also limit the entitlements of your total compensation package.

The new owner wants me to sign my new employment contract immediately, what should I do?

Employers in B.C. can’t legally force you to sign a new employment contract. While many workers believe that they need to sign to protect themselves, these agreements almost always benefit the company instead.

Employment contracts often take away protections that would otherwise be available to you. In addition to trying to get out of recognizing your length of service, the new owner of the business might attempt to add clauses that:

  • Limit your severance package to a few weeks’ pay
  • Allow the company to lay you off without penalty in the future

When you are presented with a new employment contract, take your time and carefully review it.

If you are not sure about what you are signing, an employment lawyer at Samfiru Tumarkin LLP can help you better understand the terms of your agreement.

Lost your job? Contact an employment lawyer

If you lose your job after your employer sells the business, or for any reason, contact the experienced employment law team at Samfiru Tumarkin LLP immediately.

Our lawyers in B.C. can review your situation, work to secure proper compensation, and ensure that your workplace and human rights are properly enforced.

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