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Buying & Selling a Business

Do I inherit an employee's original start date even if they sign a brand new contract with me?

TSL Written by the Treadstone Law team· Updated August 2026

For Employment Standards Act purposes, generally yes — if you've hired the employee as part of a going-concern business sale, their statutory entitlements continue to be calculated using their original start date with the seller, and simply having them sign a new contract with you doesn't erase that by itself. The new contract can set new terms going forward, but it doesn't automatically override the statutory continuity the ESA already provides.

There's an important nuance here that catches buyers off guard: a new employment agreement signed at closing, particularly one meant to limit an employee's entitlements (for example, a termination clause capping notice at statutory minimums), generally needs its own fresh consideration to be enforceable — something of real value the employee wouldn't otherwise get. Simply continuing them in the job they were already going to keep under statutory continuity typically isn't enough consideration on its own, and a court can refuse to enforce a limiting term signed without it.

If you're asking employees to sign new agreements at closing, build in real consideration and get the drafting reviewed rather than assuming a signature alone resets their position. A Treadstone business lawyer can help structure this properly.

Key takeaways

  • ESA entitlements generally continue to be measured from the original start date, new contract or not.
  • A new contract sets terms going forward but doesn't erase statutory continuity by itself.
  • A contract limiting entitlements typically needs its own fresh consideration to be enforceable.
  • Simply continuing someone's existing job usually isn't enough consideration on its own.
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.
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