What do I inherit if I hire the seller’s staff in British Columbia?

In British Columbia, employees the seller has not terminated before the sale are treated as carrying on with the buyer. Section 97 of the Employment Standards Act deems their employment continuous and uninterrupted when all or part of a business is disposed of. The Employment Standards Branch’s interpretation guide reads that as making the purchaser the employer, bound to honour past service and to assume the seller’s obligations under the Act.

What carries over

The Branch’s guide lists the effects. Length of service for compensation on termination counts from the date the seller hired the employee. Wages outstanding at the sale, including wages that fell due before it, become the purchaser’s responsibility. Accrued vacation pay is assumed by the purchaser and becomes payable when the employee next takes a vacation. Statutory holiday entitlement reflects days worked and wages earned with both employers. Benefit plans that continue become part of the employees’ conditions of employment, and employees on leave are still employees.

What stays with the seller

When the seller terminates an employee before the sale, wages and compensation then owing are the seller’s responsibility and cannot be claimed from the purchaser. Employees who decline to work for the purchaser, when their conditions have not substantially changed, are treated as having quit. If the sale brings substantial and adverse changes, the director may determine that they constitute a termination, and the purchaser would pay. If the seller does not fulfil an agreement to terminate the employees or pay the outstanding wages, the Branch’s guide says the purchaser takes over the assets with a lien attached, though it may have recourse against the seller under the contract.

Unionized staff and bankruptcies

Two situations work differently. If the employees are unionized, section 35 of the Labour Relations Code provides that a collective agreement in force continues to bind the purchaser as if it had signed it. If a trustee in bankruptcy sells the business, the Branch’s guide says employment is not treated as continuous and the purchaser is not liable for wages owed before the bankruptcy. An employee who believes an entitlement was missed can file a complaint with the Branch. The seller’s side is in Employees when you sell a business in British Columbia.