Am I required to reinstate an employee who's on parental leave when I take over the business?

Generally, yes, if you're continuing the business as a going concern and continuity of employment applies. The Employment Standards Act's job-protected leave provisions, including parental leave, are among the entitlements that continue when an employee's service is treated as continuous through a business sale — an employee on leave at the time of a going-concern sale doesn't lose their right to return to their job, or a comparable one, simply because ownership changed while they were away.

This surprises some buyers who assume an employee who wasn't actively working at closing is somehow outside the transaction, or that a change in ownership creates a natural break point for someone on leave. It generally doesn't work that way: the statutory obligation to reinstate follows the continuing employment relationship, and as the new employer of a going-concern business, you generally step into that obligation the same way you would for continuity of service, vacation, or any other entitlement.

Identify anyone currently on a protected leave as part of your employee due diligence, and plan for their return as part of your workforce, not as a separate issue the sale somehow resolved. A Treadstone business lawyer can help you understand your specific reinstatement obligations.