British Columbia Labour Rights Attorney Giving You the Representation You Need for Protecting Your Rights During a Merger or Acquisition

Mergers and acquisitions are a common business practice. They allow companies to grow and evolve to better serve their client base. They also allow struggling companies to survive and thrive under new ownership. Mergers and acquisitions can be positive experiences for everyone involved from business owners to employees. Just because a new company took charge of the one you worked for doesn’t mean things have to negatively change. However, some businesses may not respect the employees they have taken on during a merger or acquisition. They may attempt to break contracts or terminate employees. Canadian Law has protections in place for employees of companies that have been purchased by or merged with other companies. If you’re an employee of a company that has recently merged with or been sold to another company, you have rights to protect yourself against unlawful practices.

What Is a Merger or Acquisition Under the Law In British Columbia?

A merger or acquisition is when two companies unite to form a new business. How this happens and what happens after can vary according to how the new business is formed.

In a merger, one company purchases another company, but the two businesses then combine to form a new entity. Typically, a merger happens when one company agrees to be purchased by another for any number of reasons. These can include:

•       Access to Resources
•       Better Ability to Compete in the Marketplace
•       Financial Stability
•       Entering a New Market (for Non-Canadian Companies)
•       Talent Acquisition

Mergers are mutually beneficial and intended to strengthen both companies. Employees at every level can benefit through a merger as it makes the company more financially stable, opens up new marketplace opportunities, and brings stronger employees into a shared workforce.

In an acquisition, one company purchases another company but “takes over” that business. This typically happens when one business is financially struggling or facing some other obstacle and they are bought by a more stable business. When an acquisition happens, no new company is formed. The business that was purchased ceases to exist and its resources are folded into the business that purchased it.

What Are My Rights as an Employee During a Merger or Acquisition?

Regardless of whether your company is merging or being acquired, you have certain rights.  Canda has a concept called Continuity of Employment. This means when a business acquires or merges with another business they assume employment of that company’s employees. Thos employees similarly continue to work for the new company. Under Continuity of Employment, a new owner or entity must generally respect:

•       Contracts
•       Union Agreements
•       Salary
•       Benefits
•       Seniority

Many people working for a company that has been acquired by or merged with another business may be worried about termination. There is no at-will employment in Canada. At-will employment means a company can fire an employee for any reason at any time. Under at-will employment laws, an employer does not even have to notify an employee of the reason for their termination.

In countries with right-to-work laws, businesses that acquire or merge with other businesses may simply fire unwanted or redundant employees. Because of this, mergers and acquisitions have negative connotations in many countries around the world. This is not the case in Canda. Canada has strict guidelines on how employee termination must be handled. These include:

•       Notice for Termination Without Cause
•       Two Weeks Pay Up-Front In Lieu of Notice
•       Severance Pay After One Year Consecutive Employment

In British Columbia, the amount of notice required varies based on how long someone has been employed by a company. In the case of a merger or acquisition, this will be based on how long the employee worked for the company prior to the merger or acquisition. These notice periods are:

•       One Week Notice for People Employed More than Three Months but Less than One Year
•       Two Weeks’ Notice for People Employed More than One Year but Less than Three
•       Three Weeks’ Notice for People Employed More than Three Years

Additionally, people employed for more than three years must receive one additional week of notice or pay for each additional year of employment, with a maximum of eight weeks’ notice.

Severance pay is defined as two days’ regular wages for each full year of employment with a minimum of five days wages. Companies that acquire or merge with other companies must abide by all of these laws if they choose to terminate employees. They must also honor any union contracts negotiated by employees. If the new company or owner wishes to alter the terms of these contracts in any way, they must re-negotiate them with the union. Attempting to violate union contracts is against the law. It is also against the law to try and circumvent employment laws as part of a merger or acquisition.

What Should I Do if I’m Facing Legal Issues as Part of a Merger or Acquisition?

Mergers and acquisitions can be positive experiences for employees. They can create new work opportunities and potentially open up new avenues for promotion or advancement. However, some businesses may choose to use a merger or acquisition as a chance to terminate unwanted employees. They may also attempt to unfairly alter contracts, agreements, salaries, or benefits. If this is the case, you may need an attorney to represent you in a case against the new company.

If you are an employee being negatively impacted by a merger or acquisition, don’t hesitate to contact Labour Rights Law, located at 3007 Glen Dr #206,Coquitlam, BC V3B 0L8. We’re 1.6km Southwest of Town Centre Park Community Center and 1.3km West of the Glen Park Off-Leash Dog Area. We’re the only firm in the area to have begun our practice with employment law. We have years of experience in helping employees dealing with complications due to mergers and acquisitions. We can help you whether you are facing termination or have already been terminated, or if your new employer is attempting to change your benefits or salary without your consent. We bring years of experience in helping employees navigate a difficult time in their lives.

Mergers and acquisitions should be chances for new beginnings. Not every business treats them this way though. Employees shouldn’t have to suffer because of business decisions beyond their control. If you’re an employee facing difficulties at a company that’s experienced a merger or acquisition, call Labour Rights Law today at 604-245-3169 or email us for a consultation.