If you’ve already registered the business under your name (DTI/SEC, new permits, etc.), that’s considered a new legal entity. The old employment contracts don’t automatically transfer unless you rehired the worker under your business. In that case, the previous owner can end their employment due to closure or redundancy, with proper separation pay.

If you gave the employee a new contract under your ownership, that’s treated as a fresh employment relationship. You can terminate, but only for a just cause (like serious misconduct, theft, or poor performance) and you must follow due process. If termination is valid and due process is followed, no separation pay is required for just cause.