On Leave When Your Employer Is Sold? An Ontario Ruling Says You Can't Be Skipped
If you are on maternity leave, parental leave, or another protected leave when your employer changes hands, can the new owner quietly leave you off the list of people it hires? An Ontario decision — recently upheld by the Divisional Court — says no. The ruling is a useful, plain-language reminder of how human rights law protects workers who are "out of sight" during a business sale.
The case in brief
In Morasse v. Brandt Tractor Ltd., 2025 HRTO 1401, an employee was on maternity/parental leave when her employer, Nortrax Canada Inc., sold substantially all of its assets to Brandt Tractor Ltd. In an asset sale, the buyer generally does not automatically inherit the seller's staff — it runs its own hiring process and chooses whom to bring on. Brandt offered jobs to the large majority of the workforce, but it built its process around interviewing people who were actively at work during the transition. Employees who were away on leave were not interviewed or offered positions, and the applicant's employment ended.
The Human Rights Tribunal of Ontario found this was discrimination based on sex and family status under the Ontario Human Rights Code. Brandt asked the Divisional Court to overturn that result. In Brandt Tractor Ltd. v. Morasse, 2026 ONSC 992, the court dismissed the challenge and upheld the Tribunal's decision.
Why a "neutral" rule still broke the law
The most important lesson here is about how discrimination works in Canadian law. Brandt's position was essentially that it treated everyone the same: it interviewed the people who were working and available. There was no stated intention to single out new mothers.
The Tribunal and the court rejected that as a defence. Two principles drove the result:
- Intention is not required. A workplace can discriminate even when nobody
set out to. What matters is the effect of a decision, not the motive behind it.
- Equal treatment can still be unequal. A rule that looks neutral on its
face — "we only interview people currently at work" — can have a disproportionate impact on a protected group. People on maternity, parental, medical, or disability leave are, by definition, not at work. A policy that excludes "everyone on leave" therefore falls hardest on those groups. This is often called adverse-effect (or constructive) discrimination.
In short, framing a policy in neutral words and applying it consistently does not make it safe if it predictably disadvantages people the Code protects.
protected group? e.g. parental leave} E -- Yes --> F[Adverse-effect discrimination
under the Human Rights Code] E -- No --> G[Likely no Code issue] F --> H[Remedy possible at the HRTO]
What this means for everyday workers
You do not lose your human rights protections just because you happen to be away when big changes happen at work. A few practical takeaways:
- Being on leave is not a reason to be passed over. If you are on a protected
leave during a restructuring, sale, or round of hiring, you are still entitled to be considered on the same footing as colleagues who are at their desks.
- An asset sale is not a loophole. Buyers in an asset transaction get to
choose whom to hire, but that choice still has to respect the Code. "We only considered active employees" is not, on its own, a safe rule.
- Family status and sex are protected grounds. Pregnancy and parental
responsibilities are tied to these grounds, so decisions that sweep up new parents deserve a closer look.
- Keep your records. Save letters, emails, and dates around any transition.
If you were left out of a hiring process while on leave, that paper trail can matter a great deal.
What this means for employers
If your business is buying or selling assets, or reorganizing, the safe approach is to include employees on leave in any selection or hiring process and to assess them on the same criteria as everyone else. Treat a list of "people currently at work" as a red flag, not a convenient shortcut. Getting advice before finalizing who is hired is far cheaper than defending a complaint later.
Where to read more
- The HRTO decision: Morasse v. Brandt Tractor Ltd., 2025 HRTO 1401 on
- The Divisional Court's review: Brandt Tractor Ltd. v. Morasse, 2026 ONSC 992
(search the citation on CanLII).
- Your rights and grounds under the Code:
Ontario Human Rights Commission.
- How to file: the Human Rights Tribunal of Ontario at
Get in touch
If you were left out of a hiring decision, demoted, or let go around a leave, a sale, or a restructuring, the timelines and paperwork move quickly — an HRTO application generally must be filed within one year of the event. JSR Legals can help you understand whether your situation raises a human rights issue and what your options are. Reach us at info@jsrlegals.ca.
This article is general information about Ontario law, current as of June 2026, and is not legal advice for any specific situation. Court and tribunal decisions turn on their own facts — confirm how the law applies to you before acting.
Immigration & paralegal practitioner at JSR Immigration & Legals, helping newcomers and Ontario residents with their cases.
This post is general information about Canadian immigration and Ontario paralegal matters and is not legal advice. Rules change and every case is different — confirm current requirements for your own situation.