On November 30, 2021, the Ontario legislature passed the Working for Workers Act, 2021 (the “Act”) which, once Royal Assent is received, will amend the Employment Standards Act, 2000 (the “ESA”) and create new statutory rights for provincially-regulated employees in Ontario. In this blog post, we address the following two changes in detail: (i) the “Right to Disconnect”; and (ii) the prohibition on non-competition clauses. We also briefly highlight some other changes which could impact your workplace.
i. The Right to Disconnect
Since the COVID-19 pandemic has shifted many employees to home office environments, the lines between working time and personal time have become increasingly blurred. In an attempt to restore a clearer work / life balance for certain classifications of employees, the Act will require employers with more than 25 employees as of January 1 in a given year to prepare a written policy by March 1 of that year respecting “disconnecting from work”. “Disconnecting from work” is defined as:
Not engaging in work-related communications, including e-mails, telephone calls, or of the sending or reviewing of other messages, so as to be free from the performance of work.
Practically speaking, this definition means employers cannot telephone, e-mail, video call, instant message or otherwise contact certain employees during non-working hours.
The Act does not specify the hours during which an employee has a “right to disconnect”, nor does it explain the classes of employees that will be exempt. Our expectation is the Act’s regulations will use the same exemptions as the ESA’s hours of work provisions, meaning many employees with professional designations and those acting in a managerial or supervisory capacity will not have a right to disconnect.
The Act prescribes that a written “right to disconnect” policy must include: (i) the date it was prepared; and (ii) the date any changes were made. Once drafted or amended, the policy must be provided to employees within 30 days.
Once Royal Assent is obtained, the Act provides employers a 6-month grace period to prepare a disconnecting from work policy. We expect further clarification regarding the elements which must be included in a “right to disconnect” policy once the Act’s regulations are released.
In the interim, employees do not have a statutory “right to disconnect” and employers can continue contacting employees outside of normal work hours. However, employers that want to honour the spirit of the Act can, on a trial basis, cease contacting employees after certain hours. This could assist employers in determining how a right to disconnect will impact their business and, subject to further clarity in the regulations, the hours which employees will ultimately be provided to disconnect from work.
ii. Prohibition on Non-Competition Clauses
Ontario Courts have, except in rare cases, refused to uphold non-competition clauses believing they unduly restrict an employee’s ability to earn a living. Non-competition clauses were only enforced in “exceptional” circumstances, such as when the employee was the “face” of an employer’s business and clients would follow that employee to a competitor after the cessation of the employment relationship regardless of whether any solicitation occurred. In order to be seen as appropriately balancing an employer’s business interests with an employee’s right to work, any restrictive covenants (including non-solicitation clauses) needed to be limited in terms of temporal and geographic scope to be deemed enforceable.
As a result of the Act, non-competition agreements are now prohibited in Ontario (whether as part of an employment contract or as a stand-alone agreement) except in the following two circumstances:
1. In the context of a business transaction, the seller becomes an employee of the purchaser and the parties agree the seller cannot subsequently leave and engage in a competitive business.
2. The employee holds any “executive” position, specifically, chief executive officer, president, chief administrative officer, chief operating officer, chief financial officer, chief information officer, chief legal officer, chief human resources officer, chief corporate development officer, or any other chief executive position.
The Act does not clarify whether the prohibition on non-competition clauses will apply retroactively or on a go-forward basis. In the meantime, employers can still protect their corporate interests through narrowly drafted non-solicitation, confidentiality, and intellectual property assignment agreements. Given non-competition agreements can no longer be used (except in the above referenced circumstances), employers should now review their employment agreements and policies to ensure they are legally enforceable and effectively protect corporate interests.
iii. Other Changes
While the “right to disconnect” and prohibition on non-competition clauses will likely have the largest impact on employees and employers, the Act makes some other changes that could impact the workplace:
• Temporary help agencies and their recruiters will now be required to comply with certain licensing requirements.
• Employers are prohibited from knowingly using the services of a recruiter who charged a fee to a foreign national. This change complements the existing prohibition on recruiters directly or indirectly charging a foreign national for any service, good or benefit.
• Regulated professions must comply with English or French language proficiency testing requirements and cannot include Canadian experience requirements as qualifications (absent an exemption). This change is seen as removing barriers for internationally trained individuals from becoming licensed in a regulated profession.
• Workplaces are required to provide washroom access to delivery drivers, subject to limited exemptions.
Royal Assent is expected to follow in the “coming weeks”. Turnpenney Milne LLP will provide another update once the regulations have been released and additional information regarding the Act is available.
If you have any questions about the Working for Workers Act, 2021 please contact a Turnpenney Milne Lawyer.