Ontario Company’s Buyer – Not Consulting for Employment Standards

One company in Ontario has a complicated situation. The previous owner was selling it and as soon as it was purchased, complications occurred gradually. The problems included dealing with the severance and termination pay of the previous employees. To do this kind of transaction, employment standards must be exercised. It is only appropriate and it prevents breaking corporate laws.

As the business owner, if you are looking to sell your company, you must consider, for the sake of your employees who help you in along the way, in doing the following:

Communicate with the employees

Since the employees are under your leadership, communicating with them will be best for the interests of both parties involved. They have been part of your workforce until you decide to sell your company, so it is just appropriate to conduct discussions with them regarding your plans and ask feedback from them. Nothing prevents further conflict as change occurs than a firm agreement.

Provide complete notice

Whether you are closing the company or selling it, the law requires you to give your employees official notice. You will have to pay the employees through the remainder of the notice period, even if those employees chose to accept the option of working the sold company under new leadership.

If the new owner won’t consider hiring the previous employees, then before the sale is finalize, you have to let them go. Communicate with them how they will cope up with the changes and if possible, provide referrals to those who were performing well at their jobs.

If the new owner welcomes the previous employees, before the transfer occurs, you need to do the following:

  1. Provide the new owner the updated records of the employees
    1. Notify the new owner of any corporate and legal obligations pending with the employees
    1. Work with the new owner regarding your current obligations and the responsibilities you are transferring
    1. Provide employees the notice of the contracts’ end and the necessity of signing new contracts with the new owner

Finalize any payment

As the business is about to be sold, as an owner, you have to settle all payments required. These include the following:

  1. entitlement that includes:
  2. outstanding wages
  3. accrued leave
  4. employment termination that includes:
  5. payment in lieu of notice
  6. redundancy or severance pay
  7. gratuity
  8. compensation
  9. unused days off
  10. unused long service or annual leave
  11. employee tax that includes:
  12. fringe benefits tax
  13. pay as-you-go
  14. superannuation

The said payments can be negotiable with the owner and must be stated on the contract what you have agreed upon. If you choose to continue with the sale while the new owner doesn’t want any of your payment obligations, then you will have to shoulder all of them. It will really factor whether you proceed in selling the business with the necessary preparations or blindly transfer the obligations to the new ownership. Either way, there will be appropriate consequences.

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