New rules affecting employment relationships in unprecedented and varying ways have been made as a result of the Ontario Government passing Bill 27, the Working for Workers Act, 2021 (“Bill 27”). Chief among these changes will be a requirement for employers to have “disconnecting from work” policies and a prohibition on non-competes.
Set out below is an overview of the changes that will most directly affect employers in Ontario.
Mandatory Disconnecting from Work Policies
Employers with 25 or more employees would be required to have a written policy with respect to employees disconnecting from work at the end of each workday. This would be brought in by way of amendments to the Employment Standards Act, 2000 (the “ESA”).
The term “disconnecting from work” is proposed to mean not engaging in work-related communications, including emails, telephone calls, video calls or the sending or reviewing of other messages, to be free from the performance of work.
Bill 27 is vague in terms of what these policies are supposed to say and does not explicitly require employers to forbid employees entirely from working after hours.
Bill 27 is silent as to whether such a policy should apply to employees who are exempt from hours of work requirements in the ESA, such as certain professionals.
We also do not know what the consequences would be for employers who break their “disconnecting from work” policies. The new requirement in the ESA would be simply to have a policy. Bill 27 does not say that a breach of the policy would amount to a violation of the ESA or give rise to potential charges.
Therefore, employers will be left wondering just how far these new policies should go in requiring employees to “disconnect from work” after hours and if there will be any practical impact of not following them.
Abolition of Non-Compete Agreements
Non-compete agreements or clauses in Ontario employment contracts will be prohibited. This means non-compete clauses in existing agreement will be rendered void in most cases.
Exemptions from this prohibition include “c-suite” level executives and where they are agreed to as part of a sale of a business and the seller becomes an employee of the purchaser.
The term “non-compete agreement” is defined as meaning an agreement, or any part of an agreement, 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.”
This definition is quite broad and raises the question of whether it would also apply to what are commonly referred to as “non-solicit” agreements. Such agreements typically prohibit former employees from soliciting customers, suppliers or employees of the former employer. The courts have considered such agreements to be different from “non-compete agreements”, which prevent an employee from working at all in the same business or for a competitor.
What is clear from the definition is that employers will still be able to have clauses in their employment agreements requiring employees not to disclose confidential information to third parties.
Although non-compete agreements have always been difficult to enforce because they are considered to be in “restraint of trade”, the Courts have enforced them where they are not overly broad in scope or duration and the employer can establish that it has a legitimate interest to protect. The Courts in Ontario have always strived to balance employees’ rights to earn a living versus an employer’s right to protect itself from unfair competition from its employees and the rights of the parties to agree to the terms of their employment. Bill 27 would sweep aside this caselaw and simply render all non-competes void.
No doubt this development will cause alarm for employers who are vulnerable to competition from former employees.
Licensing Requirements for Recruiters and Temporary Help Agencies
Recruiters and temporary help agencies would be required to be licensed to operate in Ontario. Such licenses would be issued by the Director of Employment Standards and would be valid for one-year terms, subject to renewal. Bill 27 also proposes rules regarding suspension and revocation of these licenses and review of decisions to suspend or revoke.
Employers would be prohibited from knowingly engaging the services of an agency they know is not licensed.
At this point it is unclear what the specific requirements will be for recruiters and temporary help agencies to be licensed and if they will be onerous or expensive to comply with. Of course, if the new requirements will impose additional costs on such agencies, those costs will likely be passed on to the companies who depend on workers from these agencies.
Relaxing of Canadian Experience Requirements
Bill 27 would remove barriers for qualification of internationally trained individuals in certain regulated professions (which includes certain trades). Regulated professions would not be able to require as a condition of qualification that a person’s work experience be Canadian unless an exemption is granted.
Bill 27 also provides for the Ministry of Labour, Training and Skills Development to support the access of internationally trained individuals to regulated professions by providing information and assistance, conducting research and assisting organizations that deal with internationally trained individuals.
Washroom Access to Delivery Workers
Owners of a workplace will be required to ensure access to a washroom is provided, on request, to a worker who is present at the workplace to deliver or collect anything.
Access to washrooms, particularly for truck drivers delivering to warehouses, became an issue during the pandemic when some employers instituted rules that forbade access to their washroom facilities for fear of spreading COVID-19 in the workplace.
Prohibition on Using Recruiters Who Charge Fees to Foreign Nationals
Employers will be prohibited from knowingly using the services of a recruiter who has charged a fee to a foreign national. This will be implemented by way of amendments to the Employment Protection for Foreign Nationals Act, 2009 and the ESA.
Workplace and Insurance Fund Surplus Distribution
Bill 27 would allow surpluses in the Workplace Safety and Insurance Fund, which funds benefits provided by the Workplace Safety and Insurance Board, to be distributed to registered employers. The surplus would only be distributed if funding sufficiency ratios are met.
Bill 27 now only needs Royal Assent to become law. That could happen any day now.
Employers should accordingly start preparing now to comply with Bill 27. For employers with 25 or more employees that means preparing a “disconnecting from work” policy. Employers with non-compete clauses in their standard employment contracts will want to review and revise them to comply with Bill 27 and consider other potential measures to protect themselves from competition from former employees. Employers who use temp agencies or foreign employee recruiters should also contact those service providers to ensure they are in compliance with Bill 27.
For more information or assistance, please contact:
Landon P. Young at [email protected] or 416-862-1713
Haadi Malik at [email protected] or 416-849-2552