I am currently on LTD with an unknown date to return to work. I have been employed by my current employer for 8.5 years. It has just become public that the they have just sold my place of work. From past experiences and since deals do not have definitive closing dates, my previous employers will severe employees by paying out termination pay in lieu of notice plus severance pay on sale closing. Employees, in most cases, may continue their employment with the new owners. Over the past 20 years I have just continued my employment with new owners, after being paid out. For this next sale it is not clear yet if I would continue with them at this point.
My questions: how will this affect me since I’m on LTD? Will they pay me out on change of ownership or once my LTD ends (what if they are no longer around)? If I take the payout how does that affect my LTD? Will my benefit coverage and LTD continue afterwards if I take the pay out / what if I don’t get paid out? What has always been straightforward for me is all very confusing and not clear cut for me this time around ugh I’ve estimated, based on my length of employment approximately 8 weeks termination and 8 weeks severance pay. My two year LTD mark is a few months after the sale and not clear on what happens after that.
Thanks in advance!
Hi, it will be impossible to know exactly what they are planning to do until they send you a letter telling you. Sometimes the buyer takes all employees, sometimes the seller keeps people on leave, it all comes down to what the buyer and seller negotiate. If they are terminating all employees normally they would terminate you the same way as everyone else to avoid the risk of a human rights claim. But it splits on whether the buyer takes the employees who are on leave. The buyers are more likely to take the employees on leave in a big company than in a little one since it’s a relatively smaller and more predictable expense than for a littler company. I am assuming you aren’t unionized either?
Your LTD is separate from your employment relationship. If you are still disabled your LTD claim will continue even if your employment is terminated (for as long as the insurance coverage goes for - check your policy for that, some people have two years, some people have till age 65). Your benefits go with your employment relationship, so they will probably end if your employment is not picked up by the buyer. If the seller isn’t going to be continuing operations then they won’t be able to keep your benefits going so try to get stuff done now if you can. Sometimes if the seller is only selling part of its operations then it can keep employees on leave on benefits even if their job was ‘sold’ to another company. But it might affect whether there is a job you are qualified for to go back to when you do get better.
Severance and termination may or may not be deductible from your LTD payments, it depends on what your policy says. Mine says severance is not deducted from LTD payments. Others do have it deducted. You’ll need to check the wording of your policy to see. If they are terminating your employment on the sale of a business they will probably have to do it whether or not you ‘take the payout’ - if they are going to terminate your employment, you will probably be negotiating how much they pay you and how it is characterized rather than whether or not your job gets terminated. If your LTD policy deducts some types of payments but not others from your LTD, you should ask your company to characterize the payments to you as the type of payment that doesn’t get deducted. For example LTD might deduct payments in lieu of notice but not severance payments, and you might be able to get them to agree to pay everything as severance and nothing as notice so that it’s not deductible. But check your policy wording.
I am sorry for all the uncertainty, I know it’s very stressful not being able to plan because you don’t know what’s going to happen yet. Hopefully all will become clear soon.
Thanks so much for the reply and all the details! Its very helpful.
Typically, and I assume in this case as well, the buyer will want all employees terminated so they do not assume any years of service/senority. And no there is no Union.
I am just concerned about what happens with my LTD but I think understand now the difference. Hopefully the LTD will continue even after the sale, until when or if I am able to return to work. So then its safe to assume that my actual health benefit coverage would be terminated since its separate and my employment would be terminated with the seller.
There is still some grey areas for sure. Some piece of mind soon if I will have LTD would be nice so I’ll keep my fingers crossed I learn more soon.
Your LTD will continue because it is with the insurance company, not the employer.
The return to work will be interesting since your original job may be gone.
Yes, it is tied to the original employer.
Thanks for the response! The sale appears to be dragging on and its unclear if it will be delayed or even close.
To complicate matters, but good news, I received a call late last week from CPPD regarding my appeal to the denial of benefits. I had submitted updated medical records and the appeal application in July, so was quite surprised they just call. They also asked for an update of my condition. My application has been approved and retroactive the first day I stopped working in 2017.
I did consent that the retro payments be made to my insurer. I understand that the CPPD benefit is taxable. Does this mean I need to refile taxes for previous years?
How does this affect the relationship with my employer? Will they terminate me?
Will my insurer have rights now to terminate payments to me? I have checked my policy and the coverage extends not only to not being able to perform my actual occupation, but any other occupation and if not able to earn 60% or more of my initial income at onset of disability. I have heard that if approved by CPPD, it is harder for the insurer to stop payments and they will just continue with their reduced portion. I have not had any issues with my insurer to date fortunately, but I’d like to be prepared in the event they try to change something.
Congrats on being approved.
I would ask the CRA if they still adjust old tax returns for retroactive lump sum of CPPD.
They used to do it.
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How does this affect the relationship with my employer? Will they terminate me?
They always could.
I think they are more likely to keep paying you but who knows.
They can reassess your claim whenever they want.
Thanks for the info. I’ve just learnt that my employee sold the business and instead of severing employees they were sly enough to transfer to new ownership. This is very unusual in my field. Where does that leave me? I was anticipating they would have severed me but I’m guessing I’ve been transferred to new owner. Should I not have received some sort of notice. I’ve heard from staff that my personal belongings have been put in boxes. Is new ownership under any obligation to contact me. This is overwhelming and confusing now.
Are you in a union?
The sale probably specifies how the new owner handles existing employees.
It could be that the new employer can rehire existing employees on a case by case basis.
You need an employment lawyer.
No Union. I’ve just heard that as part of building services industry regulations new owners take on employees. If they don’t have a position for me then previous owner need to give me a package as no notice was provided. I haven’t hear from either one but I do know there is a new GM in my office now.
The employees getting transferred to the new employer is usually the best case scenario for employees - it means you should get ongoing credit for your length of service, vacation amounts, severance pay and benefits etc will stay the same and the new employer will be taking on the obligations of your old employer unless they specifically tell you otherwise.