In our recent blog, we talked about Ontario’s Bill 27, Working for Workers Act, 2021, which proposed new changes to several pieces of legislation, most notably the Employment Standards Act, 2000. On November 30, 2021, Bill 27 passed third reading and on December 2, 2021, it received royal assent, making it now law. In this post, we will highlight some of the key changes.
Non-Compete Agreements are Prohibited
Under Bill 27, employers are prohibited from entering into employment contracts or other agreements with employees that is or includes a non-compete agreement. Employers will be pleased to know that there is an exception for executives; these employees may still enter into non-compete agreements with employers.
Executives are 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”.
There is also an exception applicable in the context of the sale of a business. This exception allows purchasing businesses to restrict the right of the seller to compete with the business where the seller becomes an employee of the purchaser.
Disconnect from Work Policy
There has been quite a bit of buzz in the news about the employee’s right to disconnect from work. However, Bill 27 requires only that employers who, as of January 1 of any year, employ 25 or more employees, have a written policy in place, before March 1 of that year, for all employees with respect to disconnecting from work. This policy must include the date the policy was prepared and the date any changes were made to the policy. For the purposes of initial compliance, employers have 6 months from the date of Royal Assent to enact the policy, so employers will need to have this policy prepared by June 2, 2022.
A copy of this policy in writing must be provided to each employee within 30 days of preparing the policy or, if an existing written policy is changed, within 30 days of the changes being made.
Many employers are wondering what their Disconnecting From Work Policy should contain. The Ontario Government set out a few examples in its October 25th announcement, including setting expectations for response time for emails and encouraging employees to turn on their out-of-office notifications when not working. These examples are not binding on employers, but are a starting point as they flag what upcoming regulations might require in employer policies. Also relevant is the definition of “disconnecting from work” in the Working for Workers Act, 2021, which is: “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”.
The Employment Protection for Foreign Nationals Act, 2009 is amended by Bill 27 by prohibiting recruiters or employers, in connection with the recruitment or employment of a foreign national, from knowingly using the services of recruiters who have charged fees to foreign nationals.
Contravention of this prohibition can result in a refusal, by the Director of Employment Standards, to issue or renew the recruiter’s licence (which is required for recruiters for that purpose). Failure to comply with this prohibition may also carry fines.
Employers should review their employment contract templates to ensure that there are no non-competition provisions in these agreements going forward – except where an employee falls under an exception.
Employers with more than 25 employees on January 1, 2022, should start thinking about their Disconnection from Work policy, which they will need to roll out by June 2, 2022. Employers should also consider what other policies addressing hours of work and/or overtime might need to be addressed to ensure consistency with their new Disconnecting From Work Policy
If you need help with navigating the changes enacted by Bill 27, please get in touch for a consultation.