On December 2, 2021, the Ontario’s ‘Bill 27, An Act to amend various statutes with respect to employment and labour and other matters’ (‘the Act’) received Royal Assent.
I have previously advised that the Act, referred to as the ‘Working for Workers Act’, would introduce a number of amendments to the ESA, most notably in regard to regulations surrounding work-related emails during personal time and post employment non-compete terms in employment contracts.
The Act also makes amendments to licensing requirements for recruiters and temporary help agencies and requirements for business owners to permit washroom access for delivery workers.
I have reviewed the legislation and provide my thoughts on the implications for employers below.
As always, my comments are about the Act in general and your business or workplace may have specific or unique circumstances that fall outside the general scope of the regulations. Please contact me if you have any questions or for advice on your particular situation.
Disconnecting from work policy
This is the most widely discussed and applicable section of Bill 27. The act requires employers with 25 or more employees to have a written policy in place for all employees with respect to “disconnecting from work.”
When the act is fully implemented, qualifying employers will need to have this policy available by March 1 of any year. However, employers have until June 2, 2022 – six months from the date the Act received Royal Assent – to formulate this first policy.
The term “disconnecting from work” is defined to mean: “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 Act does not yet mandate what specifics would be required in the policy, but it is anticipated that details will be forthcoming.
It is also likely that future amendments to the regulations will exempt certain classes of employees from the policy, particularly those exempted from the hours of work and overtime provisions of the ESA.
I will keep you informed about any information issued in regards to both of these matters.
Until such time as the government does provide more detail, it would be prudent to prepare for the policy by conducting internal reviews of the number of after-hour communications sent to employees – including employees who may be exempt.
In regard to drafting the elements of the policy itself, and in the absence of specific guidance from the Ministry, I suggest that you consider including expectations about prolonged response time for emails and encouraging employees to turn on out-of-office notifications when they are not working.
Prohibition of non-compete clauses
The second most discussed amendment is that, subject to narrow exceptions, Bill 27 introduces a prohibition against including non-compete clauses in employment contracts. In the past the enforceability of non-compete terms post employment has been subject to the decision of judges at common law. The test for whether a non-compete was enforceable focused on whether the clause was reasonable in terms of its scope and duration.
The outright ban of Bill 27 prohibits employers from entering into employment contracts or other contracts that are, or include, a non-compete agreement.
This prohibition applies to all employees, except for “executives” and when such agreements are entered into in connection with the sale of a business.
The prohibition is deemed to be in force and effective as of October 25, 2021 (the day of first reading of Bill 27). Any non-compete agreement entered into on or after October 25, 2021, in violation of Bill 27 will be rendered void and unenforceable.
The Act in its current form does not address agreements that have already been entered into and whether those agreements will be subject to the outright ban, or have to meet the common law test of reasonability.
Again, I will keep you informed as more information becomes available.
In regard to the wording of the Act, it defines “non-compete agreement” 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.”
It further defines “executive” 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.”
While the Act references job titles, it is likely that the definition of “executive” will be dictated by an employee’s duties rather than the simple use of a title. Further guidance may be forthcoming from the Ministry of Labour. I will keep you informed.
With respect to the sale of a business, Bill 27 provides that a non-compete agreement can be entered to if:
- there is a sale 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; and
- the seller becomes an employee of the purchaser.
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Licensing requirements for recruiters and changes related to foreign nationals
Under Bill 27, all temporary help agencies and recruiters are required to apply for licenses to operate and prohibits persons from operating without a license.
As part of the licensing requirements, recruiters must expressly state that:
- they are aware of amendments to the Employment Protection for Foreign Nationals Act, 2009 (Act), that prohibit charging fees to foreign nationals
- they are aware that the Director of Employment Standards will refuse to issue a licence or revoke or suspend a licence if fees have been charged to a foreign national in contravention of the Act and
- they must confirm that they have not charged such fees
Bill 27 also makes it an offence for a person, including an employer, to knowingly engage or use the service of an unlicensed temporary help agency or recruiter.
These changes to the ESA will come into force at a future date upon proclamation. Again, I will keep you informed as these changes are announced and implemented.
Washroom access for delivery workers
Bill 27 amends the OHSA to require that workplace owners ensure delivery workers have access to a washroom when they are making deliveries to or from that workplace.
This requirement is subject to certain exceptions, such as where providing access would not be reasonable or practical for reasons relating to the health and safety of any person in the workplace or because of other circumstances related to the workplace.
Current regulations in Ontario do not require that all delivery workers be vaccinated against COVID-19. Depending on the layout of your workplace, you may make the evaluation that access to your washroom by delivery workers with unknown vaccination status could impact your obligations to maintain a safe workplace. Unfortunately, it is unclear at this point what specific parameters and dimensions would be necessary to support such an evaluation.
I hope you find this information helpful. Please contact me with any questions you may have or for assistance working through your employment and labour law matters.
