24July 2023

TekSavvy Solutions Up for Sale: Industry Challenges and Employee Rights

TekSavvy Solutions: Up for Sale Amid Industry Challenges and Acquisitions

TekSavvy Solutions, an independent internet service provider (ISP) in Canada, is reportedly up for sale as the company faces industry challenges and a trend of acquisitions by larger telecom companies. The company has engaged bankers and initiated a formal sale process, according to anonymous sources cited by The Globe and Mail.

TekSavvy is currently accepting bids from potential buyers, and requests for comment from the company have not been answered. Independent ISPs, which lease network space from established incumbents at regulated rates and offer services to customers, have faced difficulties in the current regulatory environment.

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The Canadian Radio-television and Telecommunications Commission (CRTC) reversed its decision to reduce wholesale rates in 2021, leading to increased costs for independent ISPs. As a result, several independent ISPs have been acquired by larger companies.

  • Ebox: BCE Inc. acquired the Longueuil, Que.-based provider offering internet, telephone, and television services for approximately $139 million.
  • Distributel: BCE Inc. also acquired the Ottawa-based company for an estimated $335 million.
  • Altima Telecom and Start.ca: Telus acquired both companies for undisclosed amounts.
  • VMedia:Quebecor Inc. purchased this Toronto-focused company in July 2022.
  • Oxio:Cogeco Inc., headquartered in Montreal, acquired the Montreal-based provider for $100 million.

If TekSavvy undergoes a change in ownership, it is important for non-unionized employees to understand their rights. The employees should receive full severance pay if they lose their jobs due to the sale, as the responsibility lies with the person or group selling the company. Even if employees receive a job offer from the new owner and choose not to accept it, they are still entitled to severance pay, although the amount may be limited to the minimum required by provincial legislation.

Severance pay for non-unionized employees in Canada can be as much as 24 months' pay and is calculated based on factors such as age, position, length of service, and the ability to find new work. If employees do not receive the correct amount of severance, they may have grounds for a wrongful dismissal claim and should seek legal advice.

Employees at TekSavvy are protected from major changes to their job without their consent. Significant modifications such as demotion, longer shifts, or reduced pay are illegal. If significant adjustments are made without consent, employees may have grounds for a constructive dismissal claim and can seek full severance pay.

Employees should also exercise caution when presented with new employment contracts by the new owner. They should seek legal counsel before signing anything, as employment contracts may contain provisions that diminish their rights, such as disregarding past service, including unfavorable termination clauses, or allowing the employer to make changes to the job without consent. Employers cannot legally force non-unionized workers to sign new employment contracts immediately, allowing employees time to seek legal advice and ensure their rights are protected. It is advisable for employees to consult with experienced employment lawyers to understand their rights and navigate the situation effectively.