CANADA LAW AND PRACTICE Contributed by: Kevin West, Andrea Hill, Priya Ratti and Meryam Kellow, SkyLaw
2.5 Labour Law Regulations Employment legislation varies by jurisdiction in Canada. Minimum statutory employment stand - ards, such as notice requirements on termina - tion, generally cannot be contracted out of or waived. For example, an employment agreement providing for “termination at will” would not be enforceable. Other legislation applies to the employment rela- tionship, including the applicable human rights code, pay equity statute and occupational health and safety legislation. Canada supports the principles of collective bar - gaining. Each jurisdiction in Canada has a labour code. Ontario prohibits non-competition provisions in employment agreements and requires certain employers to have a written policy with respect to “disconnecting from work” . In 2024, Ontario and British Columbia adopted standards for minimum working conditions for digital platform workers such as app-based ride-hailing and delivery drivers. Acquirors should conduct due diligence to understand the potential severance costs asso- ciated with a target’s key employees and con- sider whether any future plans (for example, a return-to-office policy) could be construed as constructive dismissal requiring severance pay - ments. In the context of M&A transactions, while there is no requirement to engage with employees or pension trustees, target company directors in discharging their fiduciary duties are encour - aged to take the interests of these stakeholders into account. If a target business is unionised or about to become unionised, a potential acquiror
should also learn more about the current collec- tive bargaining agreement and any negotiation process that is underway. 2.6 National Security Review See 2.3 Restrictions on Foreign Investments . 3. Recent Legal Developments 3.1 Significant Court Decisions or Legal Developments Poonian v British Columbia (Securities Commission) Filing for bankruptcy will not discharge all penal- ties relating to fraudulent securities conduct. The Supreme Court of Canada ruled that adminis - trative penalties may be dischargeable through bankruptcy; however, disgorgement orders, which are designed to return ill-gotten gains to victims, are not dischargeable. Riot Platforms v Bitfarms Riot, the largest shareholder in Bitfarms, sought a cease trade order for Bitfarms’ shareholder rights plan. The plan contained a 15% trigger threshold, which Riot argued undermined the takeover bid regime (which has a 20% trigger threshold). The Capital Markets Tribunal granted the cease trade order and found that a share- holder rights plan could be cease-traded if it substantially undermines securities law princi- ples. The Tribunal stated that “exceptional cir- cumstances” would be required to justify a trig - ger below the 20% threshold of the takeover bid regime. Re Cormark Securities The Ontario Capital Markets Tribunal held that “distribution” is the first sale of securities in the market and that pledging restricted shares as collateral for a share loan and selling the bor-
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