Canadian HR Reporter

www.hrreporter.com 15 claims… including all severance pay, termination pay or other compensation howsoever arising," said the ruling. Severance was noted by the appeals judge, says Ledgerwood, but it wasn't given undue consideration in the final outcome. "The vendor and the employee had a purported settlement agreement under which the employee waived all claims that were related to employment issues and, in exchange, the vendor employer provided the employee with just under $6,000, which was about eight weeks of that employee's compensation — the maximum that she would have been entitled to under the ESA." But the principle of privity of contract meant that ASCO might not be held liable, he says. "The purchaser employer was not a party to that agreement because, in Ontario, the rule is if you're not a party to a contract, you generally can't rely on it. However, one interesting nugget is that, unlike the summary judgment decision, the Court of Appeal still held that $6,000 was one relevant consideration that would go into the reasonable notice analysis, because the Court of Appeal Mail set out key factors to be assessed in determining reasonable notice, such as the type of employment, the length of service, the employee's age and the likelihood of finding future employment. Severance not given undue consideration Manthadi was paid out by 63732 Ontario, but "the weight given to the original severance was actually one of the issues that the Court of Appeal remitted back for reconsideration at a new trial, so it isn't really clear how much weight the severance is going to be given," says Van Ginkel. But the amount paid out often reveals plenty, he says. "A smaller severance might provide evidence that an employee expected continued indefinite employment with the purchaser, whereas a really substantial severance package might show an intention on the part of the seller and the purchaser to enter into a fixed term as opposed to an indefinite contract." Ma n t h a d i w a s p a i d $ 5 , 9 0 0 , "representing eight weeks' gross compensation in full satisfaction of all confirmed that employees generally shouldn't be entitled to double dip and receive termination pay that isn't offset in a later decision." HR's role in managing payouts Keeping track of termination entitle- ments by human resources would go a long way in preventing disputes after the purchase agreement is settled, says Ledgerwood. "HR departments should be aware that length of service will be continuous for ESA purposes following the sale of businesses like this but not necessarily for common law purposes, and that specific steps can be taken during the transaction process to limit or recognize length of service for the common law purpose," he says. "Tracking that length of service in internal HR systems to ensure that employers don't make any mistakes in the future when determining what an employee's ESA entitlements are would be important." And human resources can be a key resource consoling the workplace after a purchase by "providing employees with assurances and almost being a safe "All of the skill, experience and knowledge that was built up with the vendor might provide the purchaser with far more value." Kyle Lambert, McMillan space for employees who may be ill at ease as a result of the transaction," says Lambert. "HR is generally not going to speak to the legal ramifications or issues relating to the interpretation of employee contracts, but there's that softer side of employee management and making sure that everybody knows that they're still rowing in the same direction." CHRR

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