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successor employer

Employees, corporate transactions and the entrepreneur

An entrepreneur’s workforce grows either through fresh hires or through the acquisition of companies that bring along new employees.  Whether your organization is a large multi-national in a complex mergers and acquisitions (M;&A) transaction or a start-up looking to acquire a 2-person corporation with a new development line or skill set, the employment law implications are complex, yet largely the same.

 

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Can an employer be liable to an employee for previous service to a related employer?

In unionized industries and in particular the construction sector, there are well established rules governing when multiple companies can be considered a single employer under the law. Dozens of multiple employer applications per year are brought in Ontario alone.  The same cannot be said about common employer determinations in the non-unionized sector. However, a recent case heard by the Ontario Superior Court of Justice dealt with such a situation.

 

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Notice of dismissal must be clear, specific, and unequivocal

Two recent cases have confirmed a long-standing principle: in order to be effective, notice of dismissal must be clear, specific and unequivocal. Among other things, a definite terminate date must be specified. Otherwise, in most cases, the “notice” will not be effective, and the employer will be on the hook for additional notice or pay in lieu thereof.

 

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Slaw: No continuity of business: Target not the successor employer of Zellers employees

On November 8, 2012, Ritu Mahil, Vice-Chair of the British Columbia Labour Relations Board decided that there was not a continuity between Zellers’ business at the Brentwood Mall in Burnaby, B.C. for its employees to be successively employed by Target in Canada. Although the employees would perform similar jobs at Target stores as they had at Zellers, and the transaction agreement confirmed the transfer of leases, pharmacy records and the brand waiver, these things were not sufficient to conclude that there would be a handover of these employees. As a result, the union’s application under Section 35 of the Labour Relations Code (“Code”) for a declaration that Target is a successor employer to Zellers with respect to the business carried on by Zellers at the Brentwood Mall in Burnaby, B.C.was dismissed.

 

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The sale of a business and some implications for employers and employees

Last month I was consulted by a woman with respect to a new employment agreement that she wanted reviewed. The employment opportunity presented to her was by a company that had purchased the software company she was currently employed with for the past 19 years. Her salary remained the same, as did the total of her bonus, although the bonus structure was altered to reflect seemingly unattainable goals. While the new bonus structure did in fact reflect the purchasing company’s exact bonus structure with all of its existing employees, this arrangement was originally her main concern.

 

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