Treadstone Associates
Ask an Expert · 4 min read

How long can there be a gap before Ontario treats a sold business’s employees as having a break in service?

Thirteen weeks — but the clock starts from the earlier of two dates, and one of them is not the closing date at all.

Treadstone Associates · Updated 2026

Short answer

Ontario’s Employment Standards Act, 2000 s.9(2) provides that continuity “does not apply if the day on which the purchaser hires the employee is more than 13 weeks after the earlier of his or her last day of employment with the seller and the day of the sale.” Miss that window and s.9(1)’s continuity never engages at all — the employee’s service does not merely shrink, it restarts from zero with the buyer.

Two starting points, and the earlier one governs

The 13 weeks is not measured from the day the deal closes. It runs from the earlier of the employee’s last day with the seller and the day of the sale — so an employee whose last paid day with the seller predates closing starts the clock on that earlier date, not on the closing date the deal team is watching. A buyer that measures the gap from its own closing calendar can be weeks further along than it thinks.

This is a hire-timing rule, not a payroll-continuity rule: it is not about whether pay was interrupted, it is about when the purchaser actually took the employee on relative to that earlier date. An employer that gets the reference date wrong loses continuity for the whole group at once, because the same 13-week test applies to everyone measured against it.

Elsewhere, there is no gap to measure at all

The 13-week gate is a feature of Ontario’s own statute, not a general Canadian rule. British Columbia, Alberta and Saskatchewan each deem continuity on different tests with no comparable hire-timing window — BC and Alberta regardless of whether the purchaser ever hires the employee, and Saskatchewan’s Employment Act s.2-10 conditions continuity only on the employee “continu[ing] to be employed at the business after the sale,” with no gap provision at all. A national rollout that models one 13-week rule for every province is modelling a rule three of its provinces do not have.

Where this played out — Case Files

The reference-date error played out in a buyer that measured the gap from the vendor’s last payroll instead of the earlier statutory date. The cross-Canada contrast is worked through in the identical fourteen-week gap run on a cross-Canada rollout instead of a single-province deal.

Sources

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