Can I insist certain employees stay with the seller, not me?

Who stays with the seller is a term you negotiate. The purchase agreement can name the employees you will offer jobs to and the ones the seller keeps or releases. What the agreement cannot safely do is settle what employment standards law says about those employees. Each province writes its own rules, and they treat staff differently when a business changes hands.

Ontario: hiring is what triggers continuity

Under the Employment Standards Act, 2000, s.9(1), if an employer sells a business or a part of a business and the purchaser employs an employee of the seller, the employment is deemed not to have been terminated or severed. The employee’s time with the seller then counts as time with the purchaser. Section 9(2) says this does not apply if the purchaser hires the employee more than 13 weeks after the earlier of the employee’s last day with the seller and the day of the sale. On its wording, s.9 attaches to an employee the purchaser employs.

British Columbia and Alberta: continuity follows the sale

British Columbia’s Employment Standards Act, s.97, says that when all or part of a business is disposed of, an employee’s employment is deemed continuous and uninterrupted. The Branch’s interpretation guide adds that it asks whether the employee was employed when the business was disposed of. It says outstanding pay owed for a termination before the sale is the seller’s responsibility. Alberta’s Employment Standards Code, s.5, deems employment continuous and uninterrupted when a business, undertaking or other activity, or part of it, is sold, leased, transferred or merged.

Other provinces and what to write down

Manitoba’s Employment Standards Code, s.5, has its own rule for when a business or part of it is sold, leased, transferred, merged or otherwise disposed of whereby the control, direction or management of the business is given to another person. Other provinces have their own statutes, so read the one where the staff work. In the agreement, name each employee who stays with the seller. Say who ends their employment and on what date, and who pays wages, vacation pay and any termination amounts. Ask an employment lawyer whether a clause between you and the seller changes the statutory result.