Can a buyer choose which employees to hire in an asset purchase?

In an asset purchase the buyer is not buying the seller as an employer, so it is natural to assume the buyer simply offers jobs to the people it wants. In practice the choice is shaped by when the seller ends employment, what the province’s sale-of-business rule says and whether a union is involved. Build the staffing plan province by province.

Ontario: past service follows the people you hire

Ontario’s Ministry of Labour guide says the continuity-of-employment rule applies when the business is sold or transferred and the employee continues to work in it for the new owner. An employee the purchaser hires keeps credit for service with the seller. The guide’s subject is service credit for employees who stay on, so how endings for employees the purchaser does not hire are handled and paid for belongs in the purchase agreement and in advice from an employment lawyer.

British Columbia: the seller makes the cut

British Columbia’s Employment Standards Branch reads its sale-of-business section to cover the disposal of all or part of a business. If the seller does not terminate an employee before the sale date, the employment continues with the purchaser, who is responsible for outstanding wages. If the seller terminates first, outstanding compensation is the seller’s responsibility. Employees who decline to work for the purchaser, where conditions have not substantially changed, are treated as having quit.

A union can change the picture

If the workforce is unionized, Ontario’s Labour Relations Act and British Columbia’s Labour Relations Code both bind a buyer of the business, or of part of it, to the agreement in force. Read that agreement and any labour board ruling before assuming you can leave anyone out. Does a union follow the business to a new owner? explains the rule.