- Whether your years of service carry over often depends on how the sale is structured and what the employment rules say, so confirm it rather than assume.
- Ask for the answer in writing, including your start date, vacation balance and terms of employment.
- Corporate Registry searches can help you identify who your employer is and who owns it.
If the business you work for has been sold, one of your first questions is likely to be whether your time with the company still counts. Your length of service is one of the things that can matter when a job changes hands, and how it applies to you depends on your situation, so it is worth confirming with a lawyer.
The answer is not the same in every sale. This article explains the questions that usually decide it, how to protect yourself, and when to get legal advice. It does not apply the Employment Standards Code or case law to your situation, because that depends on your facts.
This article covers the law of Alberta.
Why your years of service matter
Length of service can matter in several ways when your job changes or ends, and the details depend on your contract and your circumstances. How your years of service are counted after a sale depends on the structure of the deal and on your circumstances, so it is worth confirming with a lawyer. If your service is treated as starting over on the sale date, the result can look very different from what you expected.
Your written employment contract may also say something about how your service is treated, and other legal rules may apply as well. Which rules matter, and how they fit together, depends on your situation. A lawyer can confirm this for you, so keep your contract and any letters about the sale close at hand.
Asset sale or share sale: why structure matters
There are two common ways to sell a business. In a share sale, the buyer purchases the shares of the company that owns the business, so ownership of the company itself changes hands. In an asset sale, the buyer purchases selected assets, and the question becomes whether you are moving to a new employer. Financing rules illustrate the difference: the CSBFP can finance the eligible assets of an existing business but does not finance share purchases.
How the deal is structured may affect your situation in ways that are worth confirming with a lawyer, so always ask which type of deal this is. The answer may not be obvious from announcements or emails, and the sale agreement will say.
Questions to ask your employer or the buyer
- Is this a sale of shares or a sale of assets?
- Who will be my employer after the closing date, and what is the legal name of that business?
- Will my start date for service purposes stay the same? Please confirm in writing.
- What will happen to my accrued vacation and any other earned entitlements?
- Will my job title, pay, hours and location stay the same?
- Will I be given a new contract, and do I have time to review it before signing?
If you are unsure who your employer is, a Corporate Registry search through a registry agent can show the registration date, owners, directors and legal addresses of Alberta corporations. A registry agent charges a government fee plus a service fee.
What buyers and sellers should think about
Buyers often assume they can start fresh with staff. That assumption can be costly if the law or the circumstances treat prior service as continuing. Sellers have a stake too, since promises made in the sale agreement about employees can affect their obligations after closing.
Both sides do better when employee treatment is dealt with openly in the agreement. Useful points to cover include which employees will be offered jobs, how service and vacation will be recognized, and who is responsible for amounts owed up to closing. These are drafting questions a lawyer can help with, based on the structure of your deal.
What to do next
- Keep copies of your employment contract, pay stubs, and any letters about the sale.
- Note your original start date and your current vacation balance.
- Ask in writing how your service will be treated and keep the reply.
- Do not sign a new contract or release until you understand what you may be giving up.
- Speak to a lawyer if you are offered a new agreement, a reduced role, or a termination.
Deadlines can apply to employment claims, so do not wait long if something goes wrong. A lawyer can confirm the time limits and options that apply to you.
Frequently asked questions
Do I automatically keep my years of service if my employer is sold?
Not necessarily in every case. It often depends on whether the deal is a share sale or an asset sale and on what the employment rules and your contract provide. Ask for the answer in writing and have a lawyer confirm it.
Does my vacation balance carry over?
That depends on the structure of the sale and the terms agreed. Ask your employer and the buyer how accrued vacation will be handled, and get the answer in writing.
Can the buyer make me sign a new contract?
You can ask for time to review any new contract before you sign. A new contract may change terms, so it is worth having a lawyer look at it first.
How can I find out who my employer is after the sale?
Ask in writing for the legal name of the employer. You can also request a Corporate Registry search through a registry agent, which can show owners, directors and legal addresses.
Sources
- ISED – CSBFP FAQ for small businesses — ised-isde.canada.ca
- Alberta.ca – Find corporation details — alberta.ca
Links go to official government, court and regulator pages. The law changes — confirm you are reading the current version.
This is a buying & selling a business question
Buying or selling a business with us is from $3,148.95, tax included. Third-party fees are extra.