Bill 27, the Working for Workers Act, 2021, S.O. 2021, c. 35, (the “Act”), received Royal Assent on December 2, 2021. The Act itself only has three (3) sections, but it contains a total of six (6) schedules which amend various pieces of Ontario legislation. Of importance employersare amendments to the Employment Standards Act, 2000, S.O. 2000, c. 41, which are found in Schedule 2.
Employers must be aware oftwo significant changes to the Employment Standards Act. First, the Act now requires employers to have a written policy on employees disconnecting from work; and second, the Act prohibts non-compete clauses in employment agreements in certain circumstances.
The Employee’s Right to Disconnect from Work
Employers who employ twenty-five (25) or more employees on January 1st of every year, must have a written policy on “disconnecting from the workplace” before March 1st of that year. “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.”
A copy of the written “disconnecting from work” policy must be provided to employees within thirty (30) days of preparing the policy or, if an existing written policy has been changed, within thirty (30) days of the changes being made. New employees are likewise entitled to receive a copy of the written “disconnecting from work” policy within thirty (30) days of being hired.
Employers have until June 2, 2022 to comply with the requirement to create a written “disconnecting from work” policy and to review its workforce to determine whether they employ 25 or more employees. After this initial period, employers will be required to review their workforce and if it over 25 employees create a written policy on disconnecting from the workplace on or before March 1st of that particular year.
The Prohibition on Non-Compete Agreements
The Act prohibits employers from entering into an employment contract, or other agreement with an employee, that is, or includes, a non-compete agreement. A “non-compete agreement” is 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.” There are two exceptions, as set out below:
- Executives which is 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.”
- The prohibition on non-compete agreements does not apply if there is a sale of a business, or a part of a business, and as a part of the sale:
a. 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
b. Immediately following the sale, the seller becomes an employee of the purchaser.
Key Takeaways for Employers
- Employers with 25 or more employees should begin to draft a “disconnecting from work” policy so it is finalized on or before June 2, 2022.
- Employers cannot enter into a non-compete agreement with an employee unless the employee is an “executive” as defined by the Act or the employer is selling their business or a part of the business.
Paquette & Associates can help employers with:
- Drafting, or revising, a “disconnecting from work” policy;
- Drafting, or revising, employment agreements that contain non-compete clauses;
The information provided in this Article is not intended to be professional advice, and should not be relied on by any reader in this context. For advice on any specific matter, you should contact legal counsel, or contact Rachael Paquette. Paquette & Associates Lawyers disclaims all responsibility for all consequences of any person acting on or refraining from acting in reliance on information contained herein.
Authors: Joshua A. Sinoway and Rachael M. Paquette