The Working for Workers Act, 2021: Ontario
On December 2, 2021, Ontario’s Bill 27, Working for Workers Act, 2021 (the Act), received royal assent. While this bill ranges with its amendments to the Employment Standards Act, 2000 (ESA), two significant changes affect employers and business owners when it comes to non-compete agreements and an employee’s right to disconnect from work. There is undoubtedly controversy surrounding the changes coming into law, where some consider these new requirements too forward thinking and generous to employees, although others argue these requirements are long overdue.
While Ontario is the first Canadian province to enact legislation which restricts the use of non-compete agreements in employment contracts and requires employers to have policies that allow employees to disconnect from work, both requirements follow trends from other jurisdictions (notably the U.S. and Europe), making these changes not so novel in the global employment landscape. The two key features of the Ontario legislation are described in greater detail below.
Prohibition Against Non-Compete Agreements
In accordance with the new Act, employers are prohibited from entering an employment contract (or other agreement) with an employee that is or includes a non-compete agreement. By definition, a non-compete agreement is ‘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’.
For employers, this means that those regulated under the ESA can no longer implement an employment contract or agreement prohibiting an employee from working for a competitor upon their termination. This prohibition is retroactively effective to October 25, 2021, and the language reads as though previously signed non-compete agreements may still be enforceable, although judicial application to contracts signed prior to the December 2021 amendment is not yet determined.
To comply with these changes, employers may look to adjust employment contract templates and contractually protect proprietary information through a robust clause. Notably, the prohibition of non-compete agreements in employment contracts can serve to be beneficial for workers to advance in their careers and various employment opportunities with ease.
Employees’ Right to Disconnect
In an era where many individuals work from home full-time (as has been evident since the pandemic), it has become common practice for employees to continue to work past their workday hours. Such a lack of work-life balance can be detrimental to employees, often causing burnout, and can be risky for employers if challenged about employees being paid overtime or extra for attending to work beyond their contractually obligated hours. The legislative addition under the Act now provides employees the right to disconnect from work, where employees can be free from work outside of regular working hours. ‘Disconnecting from work’ is defined as ‘not engaging in work-related communications, including emails, telephone calls, video calls or sending or reviewing other messages, so as to be free from the performance of work’.
To comply with the legislation, employers with 25 or more employees must have a written policy on disconnecting from work, where the policy is required to be in effect by March 1st of each year. A grace period has also been granted for 2022, where employers need not have policies in place until June 2, 2022. While no details are yet available regarding the contents of such a policy, the following details have been set out:
· The policy must mention the date it was prepared and the date any changes were made to said policy
· A written copy of the policy must be provided to each employee within 30 days of the policy’s preparation (or within 30 days of a policy being changed, if applicable)
· New employees must receive a written copy of the policy within 30 days of their hire date
Conclusion
The next step for Ontario employers is to amend employment contract templates containing non-compete language along with preparing a ‘disconnecting from work’ policy. Employers should continue to follow legislative and legal developments insofar as the right-to-disconnect policy is concerned for guidance on what the contents of said policy must contain.
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