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Hagwon is being sold, new owner may not retain staff. Help?
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ontheway



Joined: 24 Aug 2005
Location: Somewhere under the rainbow...

PostPosted: Thu Mar 19, 2009 8:28 am    Post subject: Reply with quote

JFuller317 wrote:
So the new owner is absolutely not required to honor the contracts of the old owner?

Imagine if this were true in America. James Dolan could just sell the New York Knicks to a buddy, and all those terrible contracts would instantly come off the books.



In America, it is possible for the new owner to not be required to honor the contracts of the old owner. It just depends on how the transaction is set up legally. Here are two simplified possiblities:

1) The new owner buys the business itself, that is, the entire company, corporation, partnership, proprietorship, whatever, and he takes on all the liabilites and assets, contracts etc of the business. (Actually, in some cases some items are not aquired even when buying the whole business.

2) The new owner buys some or all of the assets of a business but not the actual business entity. Although it may appear to casual observers that he has purchased the business itself, the business may remain in the hands of the previous owner. The new owner may take the name, the buildings and offices, the furniture and fixtures, but the liabilities, contracts and other parts of the business remain with the business entity.



So, it is possible in America and in Korea for some or all of the assets of the business to transfer to a new owner while some or all of the liabilities and contracts remain with the previous owner.

The previous owner gets cash which should be used to cover the remaining liabilities. In cases where the liabilities exceed the cash, of course, the previous owner may be bankrupt.
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ontheway



Joined: 24 Aug 2005
Location: Somewhere under the rainbow...

PostPosted: Thu Mar 19, 2009 8:37 am    Post subject: Reply with quote

OP. You should get busy looking for a new job. Try to get your present employer to pay you everything up to date and a prorated amount for your 1 year severance before he actually closes his doors.
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JFuller317



Joined: 10 Oct 2008

PostPosted: Thu Mar 19, 2009 8:51 am    Post subject: Reply with quote

As I understand it, the doors will never close. A new owner will just take over in early to mid April. He'll bring in his own foreign teacher, so I'll be made redundant and will be out on the street, possibly without money for a return flight. Since I first posted this thread, I learned that two of the k-teachers will be retained, while I and the last k-teacher will be gone.

Edit: one thing that may or may not be relevant is that this is apparently one location of a loosely-franchised chain. As my recruiter led me to believe, there is one central owner. So it may be only this location that is being sold. One of my friends works at a school which is supposed to be another school owned by the same people. So it's possible that I could go to my boss's boss to try and get severance and return fare.
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ontheway



Joined: 24 Aug 2005
Location: Somewhere under the rainbow...

PostPosted: Thu Mar 19, 2009 9:17 am    Post subject: Reply with quote

The fact that "the doors will never close" in the sense that the business seems to keep going is not the point. The new owner has most likely aquired the assets of the franchise without aquiring the existing contracts or liabilities. He has hired two of your coteachers from the previous owner to continue, but these may be essentially new contracts, and very likely only verbal ones.

It is in the interest of the new owner to keep the current customers coming in, so he wants the business to appear to keep going. This does not mean that he has any obligation to pay you. If this is an ECC franchise, then likely the parent corporation has no legal obligation to pay you either.

To be sure, you would have to find out what the terms of the business transaction were.


If your employer was an actual branch of ECC, owned by the parent, then this new "owner" would just be a manager, possibly with some owner type contract incentives and powers. In that case, the parent would be obligated to pay you under your contract, as the actual ownership has not changed. Of course, they could just terminate your contract as is likely provided for in the contract and you would be right back to where you are.


Unfortunately, you still need to get out there and find a new job ASAP. Try to get your old boss to pay your prorated severance. Try to negotiate return airfare and the balance of your severance from your next employer. Or get better terms in a new 1 year contract.

You are already in Korea and have some experience. You should get a better job anyway and you should be able to transfer your visa from the failed school to the new one.
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JFuller317



Joined: 10 Oct 2008

PostPosted: Thu Mar 19, 2009 9:30 am    Post subject: Reply with quote

Thanks for all the advice. I will definitely try to negotiate with them tomorrow. As for getting a new job, the thing is that I've got a girlfriend back in the states, so I can't really sign on for another year. I wanted to just take all my savings and head back when my contract would have ended in July. I was actually scheduled to take my vacation between April 11th and 27th, and I was going to fly back and see her. That ticket is already paid for, so I do have a way home, but I still think they should give me cash for return fare. If I can get that and pro-rated severance, then I'll just do some part time work between now and July in order to save some more money before going home.

I suppose that calling on them to do the honorable thing won't go too far, will it?
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ontheway



Joined: 24 Aug 2005
Location: Somewhere under the rainbow...

PostPosted: Thu Mar 19, 2009 9:43 am    Post subject: Reply with quote

JFuller317 wrote:
Thanks for all the advice. I will definitely try to negotiate with them tomorrow. As for getting a new job, the thing is that I've got a girlfriend back in the states, so I can't really sign on for another year. I wanted to just take all my savings and head back when my contract would have ended in July. I was actually scheduled to take my vacation between April 11th and 27th, and I was going to fly back and see her. That ticket is already paid for, so I do have a way home, but I still think they should give me cash for return fare. If I can get that and pro-rated severance, then I'll just do some part time work between now and July in order to save some more money before going home.

I suppose that calling on them to do the honorable thing won't go too far, will it?



I worked for a very nice, but incompetent, owner long ago. I knew the school was failing and had a new job lined up before the owner had revealed what I already knew was coming. When the school finally closed, I got all my money, without any argument, and the owner helped me transfer my visa to my new school.

Maybe the previous owner will pay you prorated severance, but probably not your return airfare.

You should talk to the old owner and the new owner, calmly, about your money, and maybe you'll find out about the conditions of the sale of the business and who owes you what.

Try to get a quick visa transfer. Someone might hire you on a 6 month or less contract.
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lifeinkorea



Joined: 24 Jan 2009
Location: somewhere in China

PostPosted: Thu Mar 19, 2009 4:30 pm    Post subject: Reply with quote

Quote:
prorated severance


Can someone tell me what that means? I thought severance was a fixed amount (1 month's pay/base salary). Why does it have to be prorated? If I work only 8 months, I get 8/12 (2/3) of one month's salary?
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JFuller317



Joined: 10 Oct 2008

PostPosted: Thu Mar 19, 2009 6:49 pm    Post subject: Reply with quote

lifeinkorea wrote:
Quote:
prorated severance


Can someone tell me what that means? I thought severance was a fixed amount (1 month's pay/base salary). Why does it have to be prorated? If I work only 8 months, I get 8/12 (2/3) of one month's salary?


It seems that the definitive answer is that if you don't work for an entire year, your employer is not required to pay you severance at all. However, I'm going to try to get them to give it to me anyway in a pro-rated amount, hopefully playing on the guy's conscience and sense of honor. We'll see how far that goes.
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JFuller317



Joined: 10 Oct 2008

PostPosted: Thu Mar 19, 2009 9:20 pm    Post subject: Reply with quote

Update: I spoke to the director again today. He said that it is possible that I will be retained. However, I got him to agree that if I am let go, he will pay me two-thirds of severance plus airfare since I will have worked there for eight months.
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lifeinkorea



Joined: 24 Jan 2009
Location: somewhere in China

PostPosted: Thu Mar 19, 2009 10:50 pm    Post subject: Reply with quote

Dang, that's awesome. Maybe I'll try that with my school, LOL (I'll wait till the exchange rate is better though)
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JFuller317



Joined: 10 Oct 2008

PostPosted: Thu Mar 19, 2009 11:02 pm    Post subject: Reply with quote

Yeah, thanks for all the advice. I thought I would be safe from 2 Great 2 Depressing with a hagwon job over in Korea, but it's really hitting everywhere. Hopefully there won't be too many stories like mine on this board.
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Whistleblower



Joined: 03 Feb 2007

PostPosted: Fri Mar 20, 2009 6:56 am    Post subject: Reply with quote

OP, make sure you get everything agreed in writing. Although the owner (or the new owner) is promising the moon and sky, they will decide to change their mind and go back on it.

It is best for both parties to get anything agreed in writing. You could write it up and ask the director and new director to sign it and say that you what to keep a record.

Record any conversations, type up minutes of meetings and get everything countersigned. You got to cover your ass otherwise your ass will get covered by ...
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