Under New Brunswick employment law, when a business is bought out and you continue working for the new owner, your years of service are generally carried over seamlessly. If the new owner later fires you, your common law severance is calculated based on your total continuous service from your very first day with the original company.
Corporate buyouts and mergers are common occurrences in Canada. Whether a small tech startup in Fredericton is purchased by a larger corporation or a manufacturing plant in Saint John changes hands, the employees are often left worrying about their job security. One of the biggest fears is that a new owner will erase all their hard-earned seniority and treat them like a brand new hire.
In this guide, we will explain exactly how your years of service are calculated for severance purposes if your company was bought out in New Brunswick as of 2026. 🔍 We will discuss the “successor employer” rules under the Employment Standards Act, how common law severance works, and what to do if the new owners try to force you into signing away your past service.
Step-by-Step Process in New Brunswick
In Canadian employment law, a core principle is the protection of long-term employees. If a business changes hands, the new owner generally inherits the existing employees along with all their past service liabilities. Here is how you ensure your rights are protected.
Step 1: Understand the “Successor Employer” Rule
Under the New Brunswick Employment Standards Act, if a business is sold, leased, or transferred, and you continue to work for the new owner without interruption, your employment is deemed to be continuous. 📅 This is known as the successor employer doctrine. For example, if you worked for Company A for 10 years, and Company B buys them out and employs you for 2 more years before laying you off, your severance must be calculated based on 12 total years of service.
Step 2: Do Not Sign Away Your Past Service
Sometimes, the new owner will hand you a new employment contract and ask you to sign it. ✍ Be extremely careful. Some sneaky contracts include clauses stating that you are starting as a “new employee” and waiving your past service. Before signing any new agreement during a buyout, you should always have a local law firm review it to ensure you are not accidentally destroying your severance entitlements.
Step 3: Determine the Type of Purchase
The mechanics of the buyout matter slightly. If it is a “share purchase” (Company B buys the shares of Company A), your employment is legally untouched. Company A still exists, just with a new owner. If it is an “asset purchase” (Company B buys the equipment and client lists but not the legal entity), Company A effectively terminates you, and Company B rehires you. However, common law still heavily protects your continuous service if the transition is seamless.
Step 4: Calculate Your Common Law Severance
If you are terminated after the buyout, do not settle for the minimums listed in the Employment Standards Act. In New Brunswick, common law severance provides significantly more. Generally, courts at the Court of King’s Bench award roughly 3 to 4 weeks of pay per year of continuous service, factoring in your age, position, and how hard it will be to find similar work in your city.
How Much Does it Cost in New Brunswick?
Protecting your severance package during or after a corporate buyout is one of the best investments you can make. 💵
- Contract Review: Having an employment lawyer review a new employment contract presented by the new owners typically costs a flat fee of $300 to $600 CAD.
- Severance Review: If you are fired, getting a professional review of your severance offer costs the same flat fee of $300 to $600 CAD.
- Contingency Legal Fees: If the new owner refuses to recognize your past service and you need to sue for your full severance, most lawyers work on a contingency basis. They will take 25% to 35% of the additional money they secure for you, meaning no out-of-pocket costs to fight the case.
| Legal Service | When to Use It | Estimated Cost (CAD) |
|---|---|---|
| New Contract Review | During the corporate buyout transition | $300 – $600 Flat Fee |
| Severance Package Review | Immediately after you are let go | $300 – $600 Flat Fee |
| Litigation / Negotiation | If the employer lowballs your continuous service | 25% – 35% of the settlement |
How Long Does the Process Take?
If you are simply having a transition contract reviewed, a lawyer can usually provide advice within 3 to 5 business days. 🕐 If you are terminated and your lawyer needs to negotiate a better severance package recognizing your full decades of service, standard negotiations usually take 2 to 4 months. If the new corporate owners refuse to be reasonable and force a lawsuit, the process at the Court of King’s Bench can take 12 to 18 months to reach a resolution.
Frequently Asked Questions (FAQ)
What happens if the new owner wants to put me on probation?
It is generally illegal to place a long-term employee on a new probationary period just because the company was sold. Under common law, your years of continuous service override any new probation clauses the buyer tries to enforce.
Can the new owner drastically lower my pay?
No. If the new owner cuts your pay by a significant margin (usually 15% or more) or heavily demotes your title, you may be a victim of “constructive dismissal.” You can treat the change as a termination and sue for full severance.
What if I refuse to sign the new employment contract?
If you refuse to sign a new contract that strips away your past service, the employer’s only real option is to terminate you without cause. In doing so, they trigger your massive common law severance payout based on your full tenure.
Does the successor rule apply to unionized environments?
Yes, but the process is different. If you are in a union, the collective agreement and specific labour laws govern the buyout transition. You must speak directly to your union representative rather than a private employment lawyer.
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