FREQUENTLY ASKED QUESTIONS AND ANSWERS

I’ve just bought a business and the employees have been there forever. That’s fine, right?

Congratulations on your new purchase, but if you are going to make any staffing changes then you want to speak with a lawyer first. 

Without getting into too much detail, how you bought the business is going to make all the difference here. If you have bought the business through a share purchase, then nothing changes with regard to the employment relationships and you inherit all of their seniority and all of the employer’s obligations. Your employees may not even realize that a change has happened. If you’ve made an asset purchase though, the situation is more complicated as there is a change of employer behind the scenes, and the old employment relationships are effectively terminated. This can be problematic if the employees just keep coming to work as though nothing has happened, so it’s definitely something to discuss with your lawyer and the purchaser. 

The bottom line is that in either scenario you’ll want to look at the employment relationships prior to striking a deal. No matter how the deal is structured, work with your lawyer to take a close look at the employment relationships, and what your obligations will be if you’re looking to let go of any of the employees.