Liability after sale of business

Does new ownership have to provide identical compensation to employees?
By Leah Schatz
|Canadian HR Reporter|Last Updated: 06/27/2019

Question: If a company sells a part of its business to another company (employees and all), does the new company have to provide the same compensation, benefits and pensions, or can it change any of these without risking liability?

Answer: This is something that the parties should consider at the front end of a transaction. Purchasers and vendors alike must turn their minds to labour and employment law issues when conducting a business purchase and sale.

A major consideration is whether the transaction takes the form of an asset purchase or a share transfer. Where the transaction is the latter, the corporation and employer remain the same, even if the corporation has new owners.