Yes — even though no business is bought and no assets change hands, Ontario law treats the employees you decline to hire as your own employees whom you have just let go.
Short answer
ESA s.75(2) requires a new building-services provider to “comply with Part XV (Termination and Severance of Employment) with respect to every employee of the replaced provider who is engaged in providing services at the premises and whom the new provider does not employ, as if the new provider had terminated and severed the employee’s employment,” and s.75(3) deems it to have been that employee’s employer. A bid that carries a labour line only for the workers it plans to hire has not priced the contract; the incumbent’s employees it declines to hire are its largest hidden cost.
ESA s.77(1) entitles a bidder to request the prescribed information about the incumbent’s workforce from the premises owner before the bid, and O. Reg. 287/01 ties the reasonableness of any offer the new provider later makes back to that request: an offer is judged against “the terms and conditions of the employee’s employment with the replaced provider on the date of the request” only where that request was actually made. Skipping the request leaves the reasonable-offer exclusion arguable in theory and unprovable in practice — the liability lands in full on every employee not hired.
Labour Relations Act, 1995 s.69.1(3) deems a sale of a business to have occurred on a retender where employees perform services at their principal place of work, the outgoing employer stops providing them there, and substantially similar services continue under the new provider — all three limbs are met by definition on an ordinary retender. British Columbia’s equivalent list of covered services is broader still, reaching bus transportation, food services and non-clinical health-sector services in addition to cleaning and security.
The full mechanic, with the information-request outcome, decided a cleaning contract won, and a severance bill inherited.
A 30-minute call is enough to tell you whether your structure holds up.
Canadian small-business transaction data is not published anywhere, so most valuations in this country quote an American benchmark. The Deavo–Treadstone Acquisition Index is a daily record of Canadian listings built to replace that: asking-price distributions by province and city are published now, and days on market, departure rates and asking-to-sale spreads follow as the series lengthens. Leave an email and we will tell you as each measure lands.
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