TekSavvy exploring potential sale: Employee rights

Independent internet service provider (ISP) TekSavvy is putting itself up for sale amidst ongoing industry turmoil and a surge in acquisitions of independent ISPs by larger telecom companies.

The Globe and Mail reports that the Chatham, Ontario-based company has engaged the services of bankers and initiated a formal sale process. The media outlet spoke to three confidential sources familiar with the matter.

At present, TekSavvy is in the phase of accepting bids from potential buyers. Requests for comments from TekSavvy representatives have gone unanswered at this time.

Independent ISPs, also known as wholesale-based providers, operate by leasing network space from established incumbents at regulated rates and then offering their services to customers.

TekSavvy is the last remaining major internet wholesale provider, as several others have already been acquired by larger competitors, reflecting the challenges posed by the current regulatory environment faced by independent ISPs.

Since February 2022, approximately six independent ISPs have been purchased by larger entities:

• Ebox: BCE Inc. paid around $139 million to acquire the Longueuil, Que.-based provider offering internet, telephone, and television services.
• Distributel: In addition, BCE Inc. also acquired the Ottawa-based company, for an estimated $335 million last year.
• Altima Telecom and Start.ca: Telus acquired both companies for undisclosed amounts.
• VMedia: This company, which primarily serves Toronto customers, was purchased by Quebecor Inc. in July 2022.
• Oxio: The Montreal-based provider was bought by Cogeco Inc., also headquartered in “la belle province,” for $100 million.

The Competitive Network Operators of Canada (CNOC), an association representing independent ISPs, has attributed these acquisitions to the policies established by Canada’s telecommunications regulator.

In 2021, the Canadian Radio-television and Telecommunications Commission reversed its previous decision to reduce wholesale rates, resulting in increased costs for independent ISPs.

If TekSavvy 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 TekSavvy employees?

If you lose your job as a result of TekSavvy selling the business, the 25-year-old internet provider 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 TekSavvy.

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 TekSavvy.

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 TekSavvy make major changes to my job?

In Canada, non-unionized employees at TekSavvy don’t have to accept major changes to their job that the new owner of the ISP 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 TekSavvy employees

If you are a non-unionized employee at TekSavvy, 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

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.