TREADSTONE LAW · ONTARIO · DIGITAL LEGAL SERVICES · EST. MMXXI ·TSL
Learn/Ask a Lawyer/Buying & Selling a Business/Can I be a successor employer…
Buying & Selling a Business

Can I be a successor employer without ever having employed anyone before?

TSL Written by the Treadstone Law team· Updated August 2026

Yes. Being a successor employer under the Employment Standards Act's continuity-of-employment rule doesn't depend on your history as an employer — it depends on whether you've bought a business (or part of one) as a going concern and continued to employ the seller's staff. A first-time buyer who's never employed anyone is treated exactly the same way as an experienced operator: if you hire the seller's employees as part of taking over the business, their prior service generally counts as service with you.

This surprises some first-time buyers, who sometimes assume that because they're brand new to being an employer, they're starting with a completely clean employment relationship with everyone they hire. The rule doesn't work that way — it looks at the nature of the transaction and whether the employment relationship actually continued, not at your prior experience as an employer.

If this is your first time buying a business with existing staff, get proper advice on what continuity actually means for vacation, leave entitlements, and future notice or severance calculations before you finalize hiring decisions. A Treadstone business lawyer can walk you through what successor employer status means practically for a new buyer.

Key takeaways

  • Successor employer status doesn't depend on your prior experience as an employer.
  • What matters is whether you continued employing the seller's staff as part of a going-concern sale.
  • First-time buyers are treated the same as experienced operators under this rule.
  • Get advice on what continuity means for vacation, leave, and future notice calculations before hiring.
This is general information, not legal advice. It doesn’t create a lawyer–client relationship, and the rules can change. For advice on your situation, a Treadstone business lawyer can help.
Was this helpful?Share:

Go deeper

Still have questions?

Search 6,000 answers, or send yours to a Treadstone lawyer — we answer in plain language.

All answersStart a File →