Summary: Business Sales & Closures
When an Alberta business is sold or closed, your employment rights depend on whether your “continuous service” is maintained or if your employment is being terminated.
In many cases, a sale or closure triggers a wrongful dismissal, entitling you to full severance pay. If you are being transferred to a new owner, you must ensure your years of service are legally recognized to protect your future entitlements.
Don’t Lose Your Years of Service
Whether the company is being bought out or shutting its doors, you are likely owed more than the “minimums.” Our Alberta team ensures your transition is fair and your severance is protected.
On This Page:
Rights When a Business is Sold
Rights When a Company Closes
What is Continuous Service?
Unemployment & EI
Speak to a Lawyer
What Are My Rights If My Employer Sells the Business?
If your employer sells the business in Alberta, one of two things usually happens: you are offered a job by the new owner, or your employment is terminated.
- If you are terminated, you are owed severance pay Alberta by the original owner based on your total length of service.
- If you are offered a job by the new owner, you generally do not have to accept it. However, if the new job is substantially similar to your current role and you refuse it, you may forfeit your right to full severance pay. This is a complex area of law known as constructive dismissal.
➡️ Learn more about the Sale of a Business in Alberta.
Employee Rights When a Company Closes Down
When a company shuts down its operations entirely, it is a “termination without cause.” Even if the business is closing due to financial failure, you are still legally entitled to severance pay.
Many employees mistakenly believe that if the company is broke, there is no money for severance. However, employees are often considered “unsecured creditors” or may have priority claims for unpaid wages and vacation pay under the Wage Earner Protection Program (WEPP).
➡️ Learn more about Company Closures and Severance.
Continuous Service: Transfer of Employees in Alberta
The transfer of employees from one company to another in Canada hinges on the concept of “continuous service.” In Alberta, if the new owner continues to employ you, your years of service with the previous owner should be recognized.
If the new owner refuses to recognize your past service, it is effectively a termination of your previous employment. You should not sign a new employment contract that “resets” your start date to zero without consulting a lawyer, as this could cost you thousands of dollars in future severance entitlements.
If a Business Is Sold, Can I Collect Unemployment?
Yes. If your employer sells the business and you are not offered a job by the new owner — or if the business closes — you have been laid off through no fault of your own. This typically qualifies you for Employment Insurance (EI) benefits. Keep in mind that receiving a large severance package may delay the start of your EI payments, but it does not disqualify you from receiving them.
Contact an Alberta Employment Lawyer
The legal team at Samfiru Tumarkin LLP has extensive experience navigating complex business transitions. Whether you are facing a termination due to sale of business or a sudden closure, we can ensure you receive the maximum compensation you are owed under Alberta law.