Does layoff seniority carry over in an asset purchase?

Seniority in a layoff means the order in which people are laid off and recalled. For union members that order comes from the collective agreement. For everyone else, the employment standards rules deal with length of service rather than layoff order. An asset purchase therefore raises two separate questions.

Union staff: the agreement travels with the business

Ontario’s Labour Relations Act and British Columbia’s Labour Relations Code both bind the buyer of a business to the seller’s collective agreement as if the buyer had signed it. British Columbia’s Code refers to the seniority rights under an agreement when it lists what its board can adjust after a sale. A buyer bound by the agreement should expect its seniority and recall rules to come along.

British Columbia: the board can redraw seniority

After a sale, lease or transfer, and once it has made an inquiry or directed a vote, British Columbia’s labour board may modify or restrict a provision of the agreement to define the seniority rights of the employees affected. Ontario’s section does not mention seniority. Where a buyer mixes the acquired employees with those of its other businesses, it lets the Board decide whether the buyer stays bound, which bargaining units exist and which union represents them.

Non-union staff: service carries over, ranking does not

Ontario’s Employment Standards Act counts an employee’s time with the seller as time with the purchaser, and British Columbia deems the employment continuous. Both concern length of service for entitlements such as notice and vacation. A promised layoff order is a different matter, so treat it as a question for the employment contract and a lawyer rather than assuming service credit covers it.

What a buyer asks for

• The collective agreement, including its seniority, layoff and recall provisions.
• Current seniority lists and any open grievances about layoffs or recall.
• Any labour board proceedings about the sale or the bargaining unit.