Work life balance and ban on non-competes – changes to laws in Ontario
*Last updated: December 17, 2021 (originally published December 1, 2021)
Bill 27, Working for Workers Act (“Act”), 2021, received Royal Assent on December 2, 2021, and is now in force in Ontario. The Act amends Ontario’s Employment Standards Act, 2000 (“ESA”) and other statutes in the province.
The most significant changes for Ontario employers include the requirement for a “disconnecting from work” policy and a prohibition on non-compete agreements.
Disconnecting from work policy
Employers with 25 or more employees as of January 1, 2022, are required to implement a written policy with respect to disconnecting from work by June 2, 2022.
- “Disconnecting from work” means not engaging in work-related communications, including emails, telephone calls, video calls or the sending or reviewing of other messages, so as to be free from the performance of work.
- Employers must provide a copy of the written policy to employees within 30 days of preparing the policy or if an existing policy is changed, within 30 days of the changes being made.
- A copy of the policy must also be provided to a new employee within 30 days of their hire date.
- Going forward, employers with 25 or more employees as of January 1 of any year, are required, before March 1 of that year, to implement a “disconnecting from work” policy.
At this time, there remains several outstanding questions regarding the “right to disconnect” provisions, including what will be required to be included in the policy, or whether certain employees may be exempt from the requirements. It is expected that these details will be addressed at a later date through regulations. Our team continues to monitor these changes and will provide updates as they become available.
Prohibition on non-compete agreements
The Act also amends the ESA to prohibit the use of non-compete agreements and clauses, which are defined as “an agreement, or any part of an agreement, between an employer and an employee that prohibits the employee from engaging in any business, work, occupation, profession, project or other activity that is in competition with the employer’s business after the employment relationship between the employee and the employer ends”. The Act carves out two exceptions to the prohibition:
- Exception for an employee who is an executive, defined as “any person who holds the office of chief executive officer, president, chief administrative officer, chief operating officer, chief financial officer, chief information officer, chief legal officer, chief human resources officer or chief corporate development officer, or holds any other chief executive position”.
- Exception in the context of a sale (including a lease) of a business or a part of a business and, as a part of the sale, the purchaser and seller enter into an agreement that prohibits the seller from engaging in any business, work, occupation, profession, project or other activity that is in competition with the purchaser’s business after the sale and, immediately following the sale, the seller becomes an employee of the purchaser.
Subject to the exceptions noted above, any non-compete agreement in violation of the Act entered into after October 25, 2021, will be rendered void. According to a statement from the Ministry of Labour, the prohibition will not apply retroactively to agreements formed prior to October 25, 2021. Please contact our team regarding how the Act may affect your agreements.
Other noteworthy changes under the Act
The Act further amends the ESA and other statutes in Ontario, including:
- Amending the ESA to establish a detailed licensing framework for recruiters and temporary help agencies.
- Amending the Fair Access to Regulated Professions and Compulsory Trades Act, 2006 to make it easier for internationally-trained immigrants to get licensed to practice in specific regulated professions, as well as trades, by prohibiting strict Canadian experience requirements as qualifications for registration.
- Amending the Occupational Health and Safety Act to require the owner of a workplace to provide access to a washroom to persons making deliveries to or from the workplace with some minor exceptions.
- Amending the insurance fund under the Workplace Safety and Insurance Act, 1997 in response to the pandemic to provide certain circumstances where the board can distribute the insurance fund in excess of specified amounts to Schedule 1 employers.
Implication for employers
Ontario employers should familiarize themselves with the new amendments under the Act and await regulatory guidance in respect to the requirements for the “disconnecting from work” policy. Further, employers should stay informed regarding how the non-compete prohibition will be interpreted and enforced. Employers in other provinces should be mindful of the developments in Ontario as these may prompt other jurisdictions to adopt similar changes.
As always, employers are encouraged to seek legal advice from our team if they have any specific questions or concerns regarding the impact of the Act on their operations.
This client update is provided for general information only and does not constitute legal advice. If you have any questions about the above, please contact a member of our Labour and Employment group.
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