- Under Ontario’s Employment Standards Act, 2000 (ESA), a buyer in an asset purchase has no statutory obligation to hire any of the seller’s employees.
- Human rights law still applies Even though the ESA doesn’t require you to hire anyone in particular, ordinary human rights law still applies to whatever hiring decisions you do make.
- - Coordinate your hiring list with the seller early — surprises close to closing create friction and can affect the seller’s own termination costs.
In an asset purchase, buyers often want to bring on the manager who knows the customers, the technician who keeps the equipment running, and skip a role that duplicates something they already have. It’s a natural instinct — but it raises a real legal question: can you actually pick and choose?
The short answer is yes, with important limits. This article looks at what the law does and doesn’t require, and where selective hiring carries risk for both buyer and seller.
The Short Answer: You Generally Can Choose
Under Ontario’s Employment Standards Act, 2000 (ESA), a buyer in an asset purchase has no statutory obligation to hire any of the seller’s employees. You are buying specific assets, not the seller’s workforce as a package. If you want to bring on some employees and not others, the ESA itself does not stop you from doing that.
This is one of the clearest differences between an asset purchase and a share purchase. In a share purchase, the corporation — and therefore its existing employment relationships — comes with the deal automatically; the buyer isn’t "hiring" anyone, because the employer entity never changes hands. In an asset purchase, every employment relationship with you has to be newly created.
Where the Freedom to Choose Has Limits
Human rights law still applies
Even though the ESA doesn’t require you to hire anyone in particular, ordinary human rights law still applies to whatever hiring decisions you do make. You cannot decline to offer a position based on a protected ground such as age, disability, or family status under Ontario’s Human Rights Code. Selective hiring has to rest on legitimate business reasons.
Continuity of employment still attaches to who you do hire
For the employees you do choose to bring on as part of a going-concern purchase, ESA section 9 can deem their service with the seller to continue with you — provided you hire them within the statutory window after the sale. Section 9(2) specifically cuts off that continuity if you hire someone more than 13 weeks after the earlier of their last day with the seller or the closing date, so timing your offers matters, not just who receives them.
The employees you don’t choose remain the seller’s responsibility — for now
If you decide not to offer a role to a particular employee, that person doesn’t become your responsibility. They remain employed by the seller’s corporation unless and until the seller deals with their employment separately. This is exactly why purchase agreements typically spell out, before closing, which employees the buyer intends to hire — so the seller can plan for anyone being left behind.
Practical Considerations Before You Decide
- Coordinate your hiring list with the seller early — surprises close to closing create friction and can affect the seller’s own termination costs.
- Document the business reasons behind your selections, particularly for any role where a human rights complaint could plausibly arise.
- Watch the 13-week hiring window if you want ESA continuity to apply, and don’t assume a delayed offer carries the same legal consequences as a same-day one.
- Remember that choosing not to hire someone is different from terminating them — you were never their employer, so that step, if it happens, belongs to the seller.
Comparing Employees You Hire vs. Employees You Don’t
| Employees You Offer Positions To | Employees You Don’t Hire | |
|---|---|---|
| Who is their employer after closing? | You, once they accept your offer | Still the seller, until the seller addresses it |
| Does ESA continuity of service potentially apply? | Yes, if hired within the statutory window as part of a going-concern sale | Not applicable — no employment relationship with you |
| Who bears any termination cost if things don’t work out later? | You, going forward, under your new contract | The seller, for any termination it carries out |
| Whose job is it to communicate the decision? | Typically coordinated between buyer and seller | Usually the seller’s responsibility |
Frequently asked questions
Can I offer jobs to some employees and simply not mention it to the others?
The mechanics of who gets told what, and when, are usually coordinated in the purchase agreement and are as much a practical and reputational question as a legal one. Silence has consequences too — talk to your lawyer about timing before you finalize your hiring list.
What if I want to hire someone a few months after closing?
Watch the 13-week rule in ESA section 9(2). If you hire someone more than 13 weeks after the earlier of their last day with the seller or the closing date, statutory continuity of service generally will not apply to that hire.
Does it matter if the role I’m not filling still exists in my business plan?
It can. If you’re effectively continuing the same function under a different person, or restructuring roles in a way that avoids recognizing someone’s tenure, that can attract scrutiny. Get advice on how you structure and document your hiring decisions.
Is a share purchase a way to avoid this issue entirely?
In a share purchase, the corporation’s existing employees come with the business automatically — there’s no "choosing," because you’re not hiring anyone new. But that also means you inherit their full employment history and any associated liabilities, which is a very different trade-off.
This is a business purchase or sale question
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