What happens to my redundancy entitlements in the sale of a business?

What is redundancy?

Redundancy occurs when, through no fault of your own, your job is longer required to be done by anyone. Effectively, your job ceases to exist.

What happens in a sale of business situation?

A sale of business occurs when a business or part of a business is transferred from one employer to another employer.

Has your length of service with your old employer been recognised by your new employer?

Generally, where there is a sale of business, service with the old employer counts as service with the new employer.

However, if the new employer is not an associated entity of your old employer, they can decide not to recognise your length of service with the old employer. Therefore, you will be entitled to redundancy pay from your old employer upon termination pursuant to the National Employment Standards (NES).

Have you been offered a job with the new employer?

Under the NES if you accept a job with the new employer and the new employer recognises your length of service with your old employer or is legally obligated to recognise your length of service, you will generally not be entitled to redundancy pay from your old employer so long as the terms and conditions of your employment remain the same or substantially the same.

If you reject the job offer with the new employer because you do not think that the new job is suitable, for example, because it represents a significant reduction in pay, status or responsibilities, you may be entitled to reject the offer and still claim redundancy pay from your old employer. However, you should seek legal advice before rejecting the offer to make sure you will still be entitled to redundancy pay because your employer may refuse to pay you redundancy pay on the basis that it made you an acceptable offer of redeployment.