Can an employee's reasonable notice entitlement grow because of years worked for the seller?

Yes, and this is one of the more significant risks buyers underestimate in an asset purchase specifically. Common-law reasonable notice, which can far exceed the statutory minimums under the Employment Standards Act, is generally assessed with reference to an employee's total length of service, along with factors like age, position, and the availability of similar employment. Where an employee continues working for you without any real break, and without a valid new employment agreement that clearly and enforceably resets the relationship, a court can look at their entire tenure, including years worked for the seller, when assessing what notice they're owed if you later terminate them.

This is exactly why a new employment agreement signed at closing matters, and why it needs to be properly drafted with fresh consideration to actually be enforceable — without one, you may be treated, at common law, as though you'd employed that person for their entire combined tenure, not just your own period of ownership.

Have any new agreements reviewed to make sure they're actually enforceable, rather than assuming a change of ownership alone limits common-law exposure. A Treadstone business lawyer can help draft agreements that hold up.