Workers that require LMOs
With respect to mergers and acquisitions, changes in ownership structure should not require a new LMO application if the new entity continues to be the worker's employer, provided the new owner assumes the previous owner's duties and liabilities, including those of the prior owner related to the filing of LMO applications, i.e. where a successor in interest can be demonstrated.
It would be in the best interest of the temporary foreign worker to apply for a new work permit to reflect the name of the new entity.
If some assets or liabilities are not assumed by the successor entity after the corporate restructuring, then a “successor-in-interest” may not exist. As a result, the new entity will have to apply for a new LMO and the worker for a new work permit.
Workers Requiring LMOs: Documentation to Support New Work Permit
In order for a new work permit reflecting the new corporate name to be issued, the following documentation should be submitted:
• A statutory declaration signed by an authorized officer of the corporation attesting to the nature of the
restructuring and successor in interest
• Copy of a corporate press release or announcement confirming the corporate change.
Where a “successor in interest” exists, a temporary foreign worker who requires a LMO would benefit from Regulation 186(u) while the application to vary terms and conditions was being decided on by CPC Vegreville, as long as the application for the renewal was made before the expiry of the existing work permit.
It would be in the best interest for affected workers to submit applications to renew their work permits to reflect the new corporate name within 90 days of the closing of a deal. Cost recovery fees would apply.
LMO Example
A small company plans to merge with a large company. After the merger, the small company, which employs many workers who require a LMO, will cease to exist. After the merger, the workers requiring a LMO, who were employed by the small company, are now working for the large company under the same conditions. The large company takes over the small company's assets and liabilities. Because of this, the large company becomes “successor in interest”, i.e. substantially succeeds to the interests and obligations, assets and liabilities of the small company. Therefore, the workers from the small company do not need new LMOs but should apply for new work permits to reflect the name of the new owner.
