Anonymised, illustrative composite. An Ontario buyer built a British Columbia asset deal's workforce plan around Ontario's conditional continuity rule. BC's own rule has no condition to build around.
At a glance
An Ontario-headquartered buyer agreed to acquire the business assets of Coastal Fabrication Works Ltd., a sheet-metal fabrication shop near Vancouver, with 31 employees. The buyer's HR lead built the workforce transition plan the way an Ontario deal is normally built: identify the strongest performers, extend offers to them, and let the vendor deal with the rest ahead of closing. Twenty-two employees were on the offer list. Nine were not.
Coastal was a British Columbia employer, and the plan assumed an Ontario rule that does not apply there. Under Ontario's Employment Standards Act, 2000, s.9(1) deems employment continuous on a business sale only “if an employer sells a business or a part of a business and the purchaser employs an employee of the seller.” Decline to hire someone, and the continuity rule simply never engages for that person — the choice belongs to the buyer. British Columbia's Employment Standards Act does not give the buyer that choice at all.
Nine employees were left off the offer list, with an average of six years' service to Coastal. Under the Ontario-style plan, that service history was the vendor's problem to price into its own severance obligations before closing, and the buyer's cost was zero. Under the rule that actually applied, all nine employees' service carried forward against the buyer whether it had extended an offer or not.
Section 97 of the British Columbia Employment Standards Act, headed “Sale of business,” reads in full: “If all or part of a business is disposed of, or the business continues to operate under a receiver or receiver-manager, the employment of an employee of the business is deemed, for the purposes of this Act, to be continuous and uninterrupted by the disposition or receivership, as applicable.” There is no purchaser-employs condition anywhere in it. The moment the asset sale closes, every employee of the business is deemed continuously employed — full stop, regardless of who is on anyone's offer list.
That inverts the entire workforce plan. In Ontario, the buyer decides who to offer employment to, and a decline simply leaves that person as the seller's problem. In British Columbia, the buyer does not get to decline by omission: an employee it does not want to retain has to be actively terminated, post-closing, by the buyer as the new employer — carrying that employee's full pre-sale length of service into whatever statutory notice or termination-pay calculation follows. Choosing not to make an offer does not avoid the liability. It just means the buyer inherits it and then has to act on it itself.
Alberta's equivalent, s.5 of the Employment Standards Code, reaches even further on its face: continuity attaches “when a business, undertaking or other activity or part of it is sold, leased, transferred or merged…” A structure built as an amalgamation rather than an asset purchase does not sidestep the Alberta rule either — the section names that route explicitly, alongside an ordinary sale.
The workforce plan was rebuilt around the actual rule rather than the assumed one. All 31 employees' continuous employment carried forward automatically at closing by operation of s.97; the nine the buyer did not want to retain were terminated by the buyer, as the new employer, in the weeks after closing, with severance obligations calculated on each employee's full historical service with Coastal, not on a fresh start date. The purchase price and the working-capital adjustment were revised to reflect that cost as a buyer liability rather than a vendor pre-closing cleanup item.
Closing on the Ontario-style assumption — treating the nine unoffered employees as the vendor's unresolved problem — would have left the buyer facing termination and severance claims from employees it believed it had never employed at all, calculated on service years it had never budgeted for.
The tell was the plan itself: a workforce transition built entirely around who gets an offer letter, on a target where the statute never asks that question.
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