Am I liable for termination pay if my employees refuse the buyer’s offer?

Employees who turn down a buyer’s job offer are the part of a sale that worries sellers most, because the answer decides whether anything is owed on top of the price. The honest answer starts with the province and then turns on how the new job compares with the old one. Employment standards are set provincially, so the same refusal can have different consequences in different places.

British Columbia treats a refusal on unchanged terms as quitting

The BC Employment Standards Branch says employees who refuse to work for the purchaser are not entitled to compensation or notice under the Act’s termination sections if their conditions of employment have not substantially changed, so neither seller nor purchaser owes them termination pay. The same policy adds that if the sale causes substantial, adverse changes, the director may treat it as a termination, and the purchaser would then be responsible for the compensation.

Ontario and Quebec carry service over for staff who stay

Ontario’s Employment Standards Act guide says that when the new owner takes over the business and the employee keeps working there, length of employment with the seller flows through to the purchaser. Quebec’s CNESST says that when a company changes owner the employment relationship is maintained as if nothing had changed, and the former and new owners are solidarily liable for amounts owed. Neither page describes an employee who declines the offer, so do not assume the BC rule applies there.

The offer itself and the contract matter

A refusal is easier to defend when the buyer’s offer keeps the same role, pay and credit for past service, and harder when the terms are noticeably worse. Read each written employment contract as well, because it may set its own terms on notice or severance. Put into the purchase agreement who pays if an employee declines or is let go after closing. Our answer on what happens to employees when you sell covers the wider picture.