Teck selling coal business to Glencore, Asian steelmakers for $8.9B: Employee rights

After months of deliberations, Teck Resources (Teck) is moving ahead with plans to sell its steelmaking coal business.

In a recent news release, the Canadian mining giant announced that it’s selling the business, known as Elk Valley Resources (EVR), to Glencore, Nippon Steel Corporation (NSC), and POSCO for US$8.9 billion.

According to the terms of the transaction, Glencore will acquire 77 per cent of EVR, while NSC and POSCO will receive a 20 per cent stake and a three per cent stake, respectively.

“Glencore has made strong commitments that will create new benefits for Canada and the Elk Valley and ensure responsible stewardship of the steelmaking coal operations for the long term,” Jonathan Price, President and CEO of Teck, said in the release.

The announcement comes just months after the Swiss trading giant proposed buying all of Teck in April, in what would have been a US$23.1-billion cash and stock deal.

“We are dedicated to working with all governing bodies and stakeholders to ensure that the transaction is of benefit to Canada, which includes a commitment from Glencore regarding employment, engaging in further reclamation efforts, and to engage constructively and meaningfully with the Indigenous Nations in the Elk Valley,” Glencore CEO Gary Nagle said in a separate release.

If the company ends up acquiring Teck’s steelmaking coal business, it plans to eventually spin off its coal assets into a separate entity.

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The deal, which still has to pass a variety of regulatory hurdles, is expected to close in the third quarter of 2024.

If Teck’s steelmaking coal business does trade hands, here are a few things that non-unionized employees in Canada need to keep in mind.

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

If the sale of Teck’s steelmaking coal business results in you losing your job, then Teck 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 the new owner of the coal business 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 Teck.

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
• 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:

• Age
• Length of service
• Position at the company
• 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 the new owner make major changes to the jobs of Teck employees?

In Canada, non-unionized employees at Teck don’t have to accept substantial changes to their job that the new owner of the steelmaking coal business might try to enforce.

Major 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, 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
• 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 Teck employees

If you work for Teck in Canada, and you receive a new employment contract from the new owner of the steelmaking coal business, 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 can’t legally force non-unionized workers in Canada 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

Do Teck staff still have the same workplace rights with a non-Canadian owner?

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

The new owner of Teck’s steelmaking coal business still has to adhere to the same employment laws that the mining giant was required to follow for its Canadian staff.

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.