Employee Rights on the Sale of a Business

When businesses change ownership, employees are usually just happy to hear that they aren’t immediately losing their jobs. However, change of ownership can have far reaching consequences on an employee’s severance entitlements.

There are two methods in which a business can change hands:

  1. If the company is established as a corporation, the shares can be sold to a new person who will then take ownership; or
  2. The company can sell its assets to a new buyer.

When a company changes ownership through the sale of shares, the existing employees will automatically become employees of the new company. A share purchase means that the employer does not change – all that changes is who owns the company. It is the same cause and effect for unionized or unionized employees.

Alternatively, if the company changes hands via an asset sale, all employees’ tenure ends on the date the sale is finalized. This … Continue reading

Resignation v. Constructive Dismissal?

In most cases, an employee who resigns from employment is not legally entitled to severance. However, the distinction between resignation and constructive dismissal has become increasingly complex in employment litigation. In the recent case of Persaud v Telus Corporation, the Ontario Court of Appeal provides useful guidance regarding the effect of conduct in determining whether a resignation is actually a constructive dismissal, thereby entitling the employee to severance.

Case Overview

Ms. Persaud was an employee at Telus for seven years before her resignation in 2004. Soon after resigning, she asserted that she was constructively dismissed on two grounds: increased work hours and a toxic work environment.

At trial, the court dismissed all of Ms. Persuad’s claims. Justice Glustein held that to demonstrate a constructive dismissal claim, the reason for resignation must relate to either a unilateral change to an essential term of employment or a series of acts demonstrating … Continue reading

Supreme Court of Canada Upholds Termination For Breach Of Drug And Alcohol Policy

Courts in Canada have long dealt with human rights issues in the context of workplace policies, including drug and alcohol policies. The competing interests are clear. On one hand, workplaces have an interest in promoting and enhancing safety at work through workplace policies. On the other hand, drug and alcohol addiction has been recognized as a prohibited ground under human rights legislation. In the recent decision of Stewart v Elk Valley Coal Corp., 2017 SCC 30, the Supreme Court of Canada had the opportunity to address the human rights issues of a workplace policy requiring disclosure of drug and alcohol dependence or addiction. The Court ruled that termination for violation of the drug and alcohol policy was not discriminatory as the employee could not demonstrate that it was his addiction, as opposed to a breach of the policy, that led to his termination.

Factual Background

The Employer operated a … Continue reading

Ontario Superior Court awards damages for Harassment in Landmark Case

In the realm of employment law, it isn’t at all uncommon for clients to advise that they have suffered harassment at the hands of their employer – but until now, it has been unheard of that a Court would award damages in such circumstances.

Case Study

Peter Merrifeld (Plaintiff) was an employee of the RCMP (Defendant) for 7 years before attending a nomination meeting for the Progressive Conservative Party in 2005. He claims that after this meeting took place, he suffered losses with respect to his reputation and career advancement, in addition to suffering emotional distress and mental suffering, all caused by his superiors in the RCMP. He claims that the losses were a direct result of his intention to run for political office.

After lengthy and complex litigation, Mr. Merrifeld was awarded $100,000 in general damages as a result of his emotional distress and mental suffering, as … Continue reading

What to do if Your Employer Stops Paying You

“My Employer Didn’t Pay Me, Now What?”

I often get calls from prospective clients who have not been paid by their employer for a period of time, sometimes as long as a few months. In some instances, the issue stems from the employer being a start-up company, and in other situations it can involve a medium to large company experiencing cash flow issues.

B.C. Employment Standards Branch

I advise these prospective clients to call the B.C. Employment Standards Branch (ESB) with respect to an unpaid wages complaint. Alternatively, the complaint can be made on the ESB website here. The ESB will assign an investigator to the complaint who can make an order against the company to pay the unpaid wages. Once an order is made by the investigator, the employee can enforce the order. Here, up to 2 months of unpaid wages can be enforced against the personal assets … Continue reading