Strathcona Resources buying Pipestone Energy: Employee rights

Strathcona Resources is set to become Canada’s fifth-largest oil producer if its acquisition of Pipestone Energy gets the green light.

In a joint news release on Aug. 1, the Alberta-based companies announced an all-share deal that will create a publicly-traded entity with an expected initial market value of approximately $8.6 billion.

“We are excited about the acquisition of Pipestone, which fits hand-in-glove with our existing condensate-rich Alberta Montney properties and provides a natural hedge to the natural gas and condensate consumed in our Cold Lake Thermal and Lloydminster Heavy Oil operations,” Strathcona President and CEO Rob Morgan said in the release.

“We look forward to welcoming Pipestone’s public shareholders as our new partners and growing per share value for them.”

Once the acquisition is complete, Pipestone is expected to own around nine per cent of the combined company, which will continue to be named Strathcona Resources.

Morgan will remain at the helm as president and CEO.

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Pipestone’s shareholders will vote on the deal during a meeting in September. It needs two-thirds approval to proceed.

If the acquisition gets the thumbs up, it’s expected to close in the fourth quarter of 2023.

Who pays severance if Strathcona doesn’t want to keep certain Pipestone employees?

If the sale of Pipestone to Strathcona results in you losing your job, then Pipestone 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 Strathcona 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 Pipestone.

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

LEARN MORE
• Rights to severance in Alberta when your employer sells the business
• Employer sold the business in B.C.? Know your rights to severance
• 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 Alberta, B.C., and Ontario.

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

• Age
• Position at the company
• Length of service
• 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.

LEARN MORE
• Rights to severance for provincially regulated employees
• Severance packages in mass layoffs
• Severance pay in a recession

Can Strathcona make major changes to the jobs of Pipestone employees?

Non-unionized employees at Pipestone don’t have to accept substantial changes to their job that Strathcona might try to enforce.

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

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.

ADDITIONAL RESOURCES
• Job changes in Alberta: What employees need to know
• Changes to your employment in B.C.: Your rights
• Can my employer make changes to my job in Ontario?

New employment contracts for Pipestone Energy employees

If you are a non-unionized employee at Pipestone, and you receive a new employment contract from Strathcona, 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 you, 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
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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 Alberta, B.C., 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.