Ontario Passes Amendments to Employment Standards Act

Kalen Ingram
Posted December 9, 2021 Category: Businesses, News & Updates

On December 2, 2021, Bill 27, the Working for Workers Act, 2021 received Royal Assent. This Bill amends several statutes, including the Employment Standards Act (the “ESA”). The ESA updates, and our corresponding recommendations, are detailed below:

  1. Disconnecting from Work: The ESA now requires employers with 25 or more employees as of January 1 on any given year to have a written “Disconnecting from Work” policy.  This policy must be in place by March 1 each year; however, for 2022, the deadline is 6 months after the day the Bill received Royal Assent. This means all employers with 25 or more employees as of January 1, 2022 must have a written Disconnecting from Work” policy in place by June 2, 2022.

Disconnecting from work is defined in the bill to mean “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.” Employees must be provided a copy of this policy within 30 days of the day it is prepared or within 30 days of the employee’s start date.

Recommendation: The Regulation which will set out the prescribed information that must be included in these “Disconnecting from Work” policies has not yet been published. As such, it is not yet clear what provisions these policies must contain, what employees these policies will apply to, and how the hours free from work are to be defined.  Once that Regulation is published, employers with 25 or more employees will have to begin the process of drafting this policy and considering how it can be implemented and upheld within their workplace.

  1. Prohibition on Non-Compete Agreements: The new bill also includes a prohibition on employers entering into non-compete agreements with employees. There are two exceptions to this prohibition:

A) Sale of Business: If there is a sale of a business and, as a part of the sale, the purchaser and seller enter into an agreement that prohibits the seller from competing with the purchaser after the sale and, immediately following the sale, the seller becomes an employee of the purchaser, the non-compete agreement will not be affected by this new provision in the ESA.

B) Executives: The prohibition on non-competes also does not apply to executive employees, 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”

Recommendation: Employers should review their existing employment agreements and consider whether any existing non-competition provisions will be considered void and unenforceable due to this Bill.  Where this is the case, employers may want to consider new employment agreements that appropriately protect the employer’s proprietary interests in certain clients or information, while also respecting the new requirements of the ESA.

  1. Licensing: The bill introduces two new types of licenses – licenses for operating a temporary help agency and licenses for acting as a recruiter – and includes provisions for the application, maintenance, and revocation or suspension of such licenses.

Recommendation: The provisions related to temporary help agencies and recruiters will come into force on a day to be named by proclamation. Once that date is proclaimed, temporary help agencies, recruiters, and those that use their services should ensure they are acting in compliance with these new requirements by the specified date.

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Kalen Ingram
Posted December 9, 2021 Category: Businesses, News & Updates

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