With a growing number of small business owners eying retirement, many companies in Canada could be up for grabs in the coming years.
According to a report by the Canadian Federation of Independent Business (CFIB), 76 per cent of small business owners are planning to exit their business within the next decade.
However, the CFIB found that only one in 10 employers have a formal succession plan in place. The biggest challenge for many is finding a suitable buyer or successor.
When big or small businesses come under new management, it’s common for non-unionized employees to be concerned about their job security. In many cases, workers are unaware of their rights in this situation.
READ MORE: The ‘big 5’ workplace rights most often overlooked by employees
If you work for a small business, and your employer finds a suitable buyer, here are four things you need to be aware of once the business changes hands.
1. The seller of the business must provide severance if you lose your job
As soon as the transaction is complete, the new owner of the small business might decide to get rid of certain staff members.
If you lose your job as a result of the sale, the person who sold the company must provide you with a severance package, which can be as much as 24 months’ pay.
READ MORE: 5 ways to determine if your severance package is fair
The amount of severance non-unionized employees in Canada are entitled to is calculated using several factors, including age, position at the company, length of service and their ability to find new work.
To figure out how much compensation you could be owed, use our firm’s free Severance Pay Calculator tool.
If your employer didn’t provide you with the correct amount, you have been wrongfully dismissed and should take legal action.
Our employment lawyers regularly resolve wrongful dismissal claims and can help you obtain proper severance.
READ MORE: 5 of the most common employer mistakes — and what employees can do about them
One of the firm’s clients, a mechanic working at an independent auto repair shop in Edmonton, was let go after her boss sold the business to a local competitor.
When she asked the new owner about severance, she was told that the person who sold the company was responsible for providing her with a package.
However, her former boss refused – arguing that severance pay wasn’t his responsibility.
READ MORE: 5 things your employer can’t legally do in Canada, according to an employment lawyer
Instead of losing her temper, she remained calm and contacted Samfiru Tumarkin LLP immediately.
Since the seller of the business is responsible for providing severance in this situation, our employment lawyers were able to help the former mechanic obtain the compensation that she was legally entitled to.
2. The new owner can’t make major changes to your job
Shortly after the business changes hands, the new owner might consider making significant adjustments to the terms of your employment.
In Canada, non-unionized employees can refuse negative changes to their job, such as a demotion, longer shifts or reduced pay. These types of modifications are illegal.
READ MORE: Boss cut your pay in Ontario? 3 things you must do
If substantial adjustments are made to the terms of your employment without your consent, the law allows you to quit your job and pursue full severance pay through a constructive dismissal claim.
However, you shouldn’t resign 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.
3. If the new owner offers you an alternate role, you don’t have to accept it
Instead of letting you go, the new owner of the small business might offer you an alternate role with the company.
If you have a good reason for refusing the employment offer, such as different hours or pay, you can still get full severance from the seller of the business.
READ MORE: Boss gave you an ultimatum? 4 key rights you have
In some cases, employees receive an excellent offer from the new owner, but they don’t want to work for the company after the sale.
Even without a good reason for turning down an alternate role, you can still get severance pay. However, it’s likely that you will only receive the minimum amount of compensation guaranteed under provincial or federal legislation.
4. The new owner inherits your length of service if they hire you
If the business changes hands, and the new owner wants to keep you, your years of service usually don’t go out the window.
Your length of service plays a crucial role in determining how much severance pay you are entitled to when you are fired without cause or let go.
If the new owner provides you with an employment contract, don’t sign anything until you speak with an experienced employment lawyer at Samfiru Tumarkin LLP. The company can’t legally force you to accept it immediately or a few days after receiving it.
READ MORE: Given a new employment contract? Review these key clauses, employment lawyer says
It’s not uncommon for employers to try to get out of recognizing a worker’s length of service in the new agreement. Our firm can review the contract and ensure that it contains the correct clause to protect your seniority.
Even if the new owner of the small business isn’t based in Canada, your rights don’t change. Companies can’t use employment contracts to get around Canadian employment standards legislation.
Let us fight for you
If you are fired or let go shortly after your employer sold the business, or for any reason, contact the experienced employment law team at Samfiru Tumarkin LLP.
Our firm has helped tens of thousands of non-unionized individuals in Ontario, Alberta and B.C. resolve their workplace issues.
READ MORE: 5 of the most common work situations where getting an employment lawyer can help
We can review your situation, enforce your rights and secure the compensation you are legally entitled to.
Lost your job after your employer sold the business? New owner pressuring you to sign an employment contract immediately?
Contact the firm or call 1-855-821-5900 to secure assistance from an employment lawyer in Ontario, Alberta or British Columbia. Get the advice you need — and the compensation you deserve.
Lior Samfiru and James Parker are employment lawyers at Samfiru Tumarkin LLP, Canada’s most positively reviewed law firm specializing in employment law and long-term disability claims. The firm provides free advice through Canada’s only Employment Law Show on TV and radio.