Impacts on business buying and selling

Pascal Comeau, lawyer

As of December 31, 2010, all private, public and parapublic sector businesses with at least 10 employees or which have had at least ten employees, with exceptions, must comply with the Pay Equity Act (R.S.Q. c. E-12.001) or face possible fines. The Act stipulates that such businesses must carry out pay equity exercises to ensure that the people who are employed in female-dominated occupations receive the same pay as those employed in male-dominated occupations of equal value to the company.

As a result, employers may have to pay the salaries of people employed in female-dominated occupations who were paid less than those employed in male-dominated occupations of equal value, retroactive to November 21, 2001.

An investor who purchases a business that is not in compliance with the Pay Equity Act may therefore be obligated to retroactively pay these salaries and face potentially heavy fines.

Investors planning to purchase a business and business owners seeking to sell must stipulate Pay Equity Act clauses in their business sales agreements to protect buyers against employee claims under the Act and sellers against any proceedings brought by buyers.

LAW COLUMN 01/2012

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Get a copy of the bond!

A. Électrique inc. has just been awarded the largest contract in its history from general contractor Miserly Construction. Upon signing the contract, Miserly insisted on including a clause by which André waived his right to file a legal construction hypothec in exchange for a bond guaranteeing the material and labour provided by A. Électrique inc. Thrilled with the new contract, André neglected to obtain a copy of the bond when signing the contract...

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