Parties to an asset transaction should carefully consider the
implications of the proposed acquisition on existing employment
arrangements, including, non-competition agreements, workers'
compensation programs, and pension plans. The provisions of the Employment Standards Act, 2000, S.O. 2000,
c. 41 (ESA), the governing employment
standards legislation in Ontario, should be considered when
negotiating employment arrangements as the ESA can impact packages
and offers made–or not made–to existing employees, and
any liability that may arise for the vendor and/or purchaser.
ESA: relevant provisions
The ESA provides minimum terms and conditions of employment for
the majority of employees in Ontario. The provisions of the ESA
most relevant to the purchase or sale of businesses relate to
giving notice to employees of their impending termination,
providing severance pay to qualifying employees, and paying
employees in lieu of service. "Notice of termination" provisions
are
