Hiring the seller’s employees in British Columbia does not restart their service. Employment Standards Act section 97 deems employment “continuous and uninterrupted” by the disposition, so compensation for length of service under section 63 is measured on years the buyer never owned. Unlike Ontario, British Columbia attaches no time window to that rule.
Key takeaways
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It sits in Part 11, Enforcement, under the marginal note Sale of business, and is one sentence: “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.”
Read what is missing: no hiring window, no going-concern requirement, no requirement that the purchaser take all of it. The Employment Standards Branch’s interpretive guide agrees the reach is wide — “The wording of s.97 is very broad. It refers not only to the sale of a business, but to the disposal of all or part of a business.” Treadstone Law covers the same ground for BC deals.
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The largest gap between the provinces runs against a buyer who knows the Ontario rule. Ontario’s Employment Standards Act, 2000 section 9(2): “Subsection (1) 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.” Those mechanics are in what happens to the staff when the business is sold.
British Columbia has no equivalent. “13 weeks” appears twice in the BC Act — in the temporary-layoff and pregnancy-leave rules — and neither is a continuity window. Pause-and-rehire does not work here. The Branch’s example is a restaurant where “the new owner takes over, the restaurant is closed for a few days to redecorate. The employees are then called in to work and continue working as before.”
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Section 63(1) starts the liability early: “After 3 consecutive months of employment, the employer becomes liable to pay an employee an amount equal to one week’s wages as compensation for length of service.” Subsection (2)(b) runs it up — “after 3 consecutive years of employment, to an amount equal to 3 weeks’ wages plus one additional week’s wages for each additional year of employment, to a maximum of 8 weeks’ wages”.
Eight weeks is a ceiling a buyer can inherit already reached, and the Branch’s example shows how fast it bites: “Sam, a 4 year employee of JKL Company, is terminated without notice one month after TUV Ltd. takes possession of the business. Sam is entitled to 4 weeks compensation for length of service.” One month of the buyer’s ownership; four weeks of the seller’s payroll history.
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The word severance does not appear once in British Columbia’s Employment Standards Act — zero occurrences in the consolidated text. Section 63 is the whole of it. Ontario stacks a second payment on top, capped far higher by its section 65(5): “An employee’s severance pay entitlement under this section shall not exceed an amount equal to the employee’s regular wages for a regular work week for 26 weeks.” That regime is covered in statutory severance pay and what an asset buyer inherits.
On parameters of my own choosing rather than data — $1,500 a week, twelve years’ combined service at closing — one long-service employee carries 8 weeks, or $12,000, in British Columbia. Treadstone Law on whether an asset purchase avoids severance is Ontario-framed, and its point transfers: the deal sheds the duty to hire anyone, and nothing about the service of anyone kept.
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Section 97 itself says only that employment is deemed continuous. The Employment Standards Branch draws a liability consequence from it — “The purchaser assumes the role of employer and is required to honour the employee’s past service with the seller and assume all of the seller’s liabilities and obligations under the Act toward the employees” — and, where the employee is not terminated first, “the purchaser is responsible for all outstanding wages, including those that fell due prior to the sale of the business”.
That debt is secured. Section 87(1): “Despite any other Act, unpaid wages constitute a lien, charge and secured debt in favour of the director…against all the real and personal property of the employer” named in a determination, ranked by subsection (3) ahead of a PPSA security interest. The Branch applies it to the deal: where the seller does not clear what it promised, “the purchaser takes over assets with a lien attached to them”. Hence the indemnity and holdback and the diligence list.
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Continuity depends on the person still being employed at the disposition. The Branch is explicit on the other case: “When the seller terminates an employee prior to the sale of the business, any outstanding wages or compensation pay is the seller’s responsibility. The employee cannot obtain any outstanding wages or compensation from the purchaser.” Treadstone Law reaches the same conclusion on someone fired right before closing.
Employees on leave are the trap inside it: the Branch treats anyone on paid or unpaid leave at the date of disposal as still an employee, so an active-payroll headcount misses them.
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Section 64(1) engages a second regime where a buyer takes the assets but not the whole workforce. “If the employment of 50 or more employees at a single location is to be terminated within any 2 month period, the employer must give written notice of group termination” to each affected employee, any union, and the minister. Subsection (3) sets eight weeks’ notice for 50 to 100 employees, twelve to 300, sixteen above.
Subsection (5) is the sentence that costs money: “The notice and termination pay requirements of this section are in addition to the employer’s liability…in respect of individual termination under section 63”. Group notice does not absorb the section 63 compensation. Ontario runs the other way: its section 58(1) opens “Despite section 57” and counts 50 terminations “in the same four-week period”. Treadstone Law on group layoffs after buying notes short ownership is no defence.
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Section 65(1)(f) removes sections 63 and 64 for an employee “who has been offered and has refused reasonable alternative employment by the employer”. The Branch reads employees who decline to work for the purchaser on unchanged conditions as having quit, so neither side owes notice or compensation.
Reasonableness is objective. The guide to section 65 quotes the Employment Standards Tribunal in Walther Hopp, BC EST #D433/97: “The test of reasonableness is an objective test that is what a reasonably officious bystander would consider as reasonable, not what the employee believes is reasonable.” One gap — the Act says an offer “by the employer”, and whether an unrelated purchaser’s offer qualifies is answered neither in the Act nor the guide, so it is not answered here.
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A buyer who keeps everyone and then reorganises has delayed the liability, not avoided it. Section 66 is one line: “If a condition of employment is substantially altered, the director may determine that the employment of an employee has been terminated.” The Branch applies it to acquisitions directly — “If these alterations are substantial, and adverse, the director may determine that they constitute a termination”, with the purchaser paying, priced on the whole continuous history (changing job titles).
Inherited layoffs carry a clock. A temporary layoff is “a layoff of up to 13 weeks in any period of 20 consecutive weeks” for an employee with no right of recall, and section 63(5) backdates the trigger: “the employment of an employee who is laid off for more than a temporary layoff is deemed to have been terminated at the beginning of the layoff”. A buyer inheriting staff on layoff inherits a deadline (Treadstone Law on inherited layoffs).
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Vacation crosses too. Section 57(1) gives “at least 3 weeks, after 5 consecutive years of employment”, and section 58(1)(b) moves the money at the same threshold. The Branch says the accrued balance moves too: “the purchasing employer assumes liability for accrued vacation pay at the time it takes on the employees” (clearing it in the deal).
Some people sit outside all of this. Employment Standards Regulation section 31 provides that the Act does not apply to listed licensed professionals — lawyers, CPAs, engineers, architects, land surveyors, insurance agents, real estate licensees, veterinarians — but only “so long as that person is carrying on the occupation governed by the Acts referred to in paragraphs (a) to (p)”. Managers are different: the Regulation excludes a manager from Part 4 and says “Part 5 of the Act does not apply to a manager”, but not Part 8, termination.
Insolvency is the one clean slate: where a trustee in bankruptcy sells the business and the employees continue, the Branch’s position is that “the employees’ rights under the Act are extinguished” and “The purchaser of a bankrupt business is not liable for the unpaid wages owed prior to the date of bankruptcy.” Receivership does the opposite — section 97 names it expressly (distressed acquisitions).
So: list every employee with combined service at closing, run the section 63 ladder, add accrued vacation, add wages outstanding — then treat the total as a floor. Section 4 makes those requirements a minimum and section 118 preserves the parallel civil claim, so common-law reasonable notice sits above them. This is British Columbia law; a federally regulated business is outside the provincial Act (federal continuity).
No. Ontario excuses a purchaser who hires more than 13 weeks after the sale, but British Columbia’s continuity rule has no equivalent window, going-concern test or carve-out — a pause-and-rehire strategy that works in Ontario does not work in BC.
Eight weeks’ wages — three weeks after three consecutive years, plus one additional week per additional year, capped at eight. Unlike Ontario, BC’s Act has no separate severance pay entitlement stacked on top; the word severance does not appear in the Act at all.
No, only delayed it. The director can determine that employment has been terminated where a condition of employment is substantially altered, and the Employment Standards Branch applies this directly to post-acquisition reorganizations — the liability is priced on the employee’s whole continuous history, including the years worked for the seller.
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