When an Employee Refuses to Work for the Buyer After an Ontario Business Sale

Not every employee wants to keep their job under new ownership — and when a business is sold, that mismatch raises a genuine legal question rather than just an awkward conversation. What happens when an employee refuses to work for the buyer depends heavily on whether the deal was structured as a share sale or an asset sale, and on whether the new arrangement being offered actually resembles the old job.

This article walks through both deal structures, what "refusing" legally means in each, and what employers and employees should each keep in mind before assuming they know how it plays out.

Two Very Different Starting Points

Asset Sales: What "Refusing" Actually Means

In an asset sale, the purchaser has no statutory obligation to hire any of the seller’s employees, and any offer it does extend is a genuinely new employment relationship, not a continuation of the old one — though the Employment Standards Act’s going-concern rules automatically deem that employee’s service to continue for ESA purposes if the buyer hires them within the statutory window, counting time with the seller toward statutory entitlements such as notice, severance, and vacation. That is a deeming rule, not something the buyer opts into or out of. An employee is legally free to decline that offer. The real question isn’t whether they’re "allowed" to refuse — they are — but what refusing means for what the seller, their existing employer, owes them.

Does Refusing a Reasonable Offer Cost the Employee Anything?

Generally speaking, an employee facing a job loss is expected to take reasonable steps to reduce the financial impact of that loss — including accepting a genuinely comparable alternative job if one is offered. If a buyer’s offer closely matches the employee’s existing role in pay, duties, location, and status, an employee who turns it down without good reason may find that decision affects what they can later claim from the seller for lost income. This is a general, fact-specific principle rather than an automatic rule, and how "comparable" the offer really was is often exactly what gets disputed.

What If the Offer Isn’t Actually Comparable?

The flip side matters just as much: if the buyer’s offer involves meaningfully lower pay, a demotion, relocation, or materially different terms, an employee generally isn’t expected to accept it just to avoid affecting their entitlements from the seller. Whether a specific offer is "comparable enough" to change the analysis is a fact-specific question — not something either side should assume in either direction without a proper review of what’s actually being offered against what the employee had before.

Share Sales: A Different Question Entirely

In a share sale, there is no new employer to refuse — the same corporation continues employing the same people under new shareholders. An employee generally can’t treat new ownership, by itself, as grounds to walk away and claim they were terminated; the employment relationship simply continues. That said, if the new owner makes substantial changes to role, pay, or working conditions after taking over, that raises a separate question about whether those changes go far enough to affect the employment relationship — a different analysis from "refusing to work for the buyer" at the time of sale.

Frequently asked questions