Subway exploring potential sale: Employee rights

Subway, one of the world’s largest restaurant brands, is exploring a potential sale.

In a recent news release, the 58-year-old sandwich chain said it has hired J.P. Morgan to help it find a suitable buyer.

“The management team remains committed to the future and will continue to execute against its multi-year transformation journey, which includes a focus on menu innovation, modernization of restaurants and improvements to its overall guest experience,” the release reads.

Subway added that it doesn’t “intend to make any further public comment regarding the [sale exploration process] until it has been completed.”

SEE ALSO
• RBC to buy HSBC Canada for $13.5B: Employee rights
• Apotex bought by SK Capital: Employee rights
• Telus buys LifeWorks for $2.9 billion: Employee rights

While a price tag wasn’t included in the announcement, The Wall Street Journal reported that the company could be valued at more than $10 billion.

If Subway does come under new management, here are a few things non-unionized employees in Canada need to know.

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

Who pays severance if the new owner doesn’t want to keep certain Subway employees?

If you lose your job as a result of Subway selling the business, the 58-year-old sandwich chain must provide you with full severance pay.

In Canada, the person or group who sold the company is responsible for providing proper compensation to affected staff.

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 from Subway.

Even if you don’t have a good reason for turning down the offer, you can still get a severance package.

However, it’s very likely that you will only receive the minimum amount of compensation required under provincial legislation.

ADDITIONAL RESOURCES
• Sale of business in Ontario: Rights to severance
• Rights to severance in Alberta when your employer sells the business
• Employer sold the business in B.C.? Know your rights to severance

How is severance pay calculated?

Severance for non-unionized employees in Canada can be as much as 24 months’ pay. This calculation applies to severance packages for workers at Subway restaurants.

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

Our firm’s free Severance Pay Calculator can help you figure out how much you are owed.

If your company doesn’t provide you with the correct amount, you have been wrongfully dismissed and should contact Samfiru Tumarkin LLP immediately.

Our experienced employment lawyers regularly resolve wrongful dismissal claims and can help you secure proper severance.

LEARN MORE
• Severance pay in a recession
• Rights to severance for provincially regulated employees
• Severance for federally regulated employees

Can the new owner of Subway make major changes to my job?

In Canada, non-unionized employees at Subway don’t have to accept major changes to their job that the new owner of the sandwich chain might try to enforce.

Large 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, the law allows you to resign from your job and seek full severance pay through a constructive dismissal claim.

However, you shouldn’t quit your job before speaking with an experienced employment lawyer at Samfiru Tumarkin LLP.

We can confirm that you have been constructively dismissed, assess your legal options, and help you secure the compensation you deserve.

LEARN MORE
• Can your employer make changes to your job in Ontario?
• Changes to your employment in B.C.
• What happens when your job is changed in Alberta

New employment contracts for Subway employees

If you are a non-unionized employee at Subway, and the new owner of the business provides you with an employment contract, don’t sign anything before seeking legal counsel.

Employment contracts often take away key protections that would otherwise be available to you, including:

• Ignoring past service: The new owner might attempt to reduce or ignore 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.
• Termination clause: 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.

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

Once you receive the agreement, contact Samfiru Tumarkin LLP as soon as possible.

Our experienced employment lawyers can review the contract and make sure that your workplace rights are properly protected.

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

Do I still have the same rights if Subway is sold to another U.S.-based company?

The short answer is yes. Companies outside of Canada can’t use employment contracts to get around Canadian employment standards legislation.

Even if Subway’s new owner is also headquartered in the U.S., the company has to adhere to the same employment laws that the 58-year-old sandwich chain was required to follow for its Canadian staff.

SEE ALSO
• Employment lawyer on severance for Canadians working for a U.S. company
• Accepted a severance offer without consulting a lawyer? Next steps

Received a job offer? Speak with an employment lawyer

Before signing 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 can help you better understand the terms of the contract and advise you on how best to navigate the situation.