The move could impact how employers use non-compete clauses
by Rhonda B. Levy and Monty Verlint of Littler
On October 25, 2021, Ontario announced the introduction of Bill 27, Working for Workers Act, 2021 (Act) for First Reading. If passed, the Act would amend Ontario’s Employment Standards Act, 2000 (ESA) and other statutes in the province to improve protection and support of workers and provide Ontario with a competitive advantage in attracting innovative global talent. The Act, which was carried at First Reading,1 would implement changes based on the recommendations of experts on the Ontario Workforce Recovery Advisory Committee following consultations with workers, employers, and unions.
The most significant changes to the ESA proposed in the Act are discussed below.
The Act would require employers with 25 or more employees as of January 1 of any year to ensure, before March 1 of that year, it has a written policy in place for all employees with respect to “disconnecting from work” (Policy). The Act defines “disconnecting from work” as “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.” The Policy must include the date it was prepared and the date any changes were made to it. An employer would be required to provide a copy of the Policy to each of its employees within 30 days of preparing it or, if an existing written Policy is changed, within 30 days of such change. An employer would be required to provide a copy of the Policy that applies to new employees within 30 days of their hire.
If the Act receives Royal Assent, for initial compliance purposes, the employer would have six months from that date (instead of by March 1) to put a Policy in place. In addition, the date the employer would use for assessing whether it has 25 or more employees would be the January 1 preceding the date that is six months after the day the Act receives Royal Assent.2
The Act would prohibit employers from entering into employment contracts or other contracts that are, or include, a non-compete agreement. The Act defines a “non-compete agreement” 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.” Any non-compete agreement entered into in violation of the Act would be rendered void. The Act contains an exception: the prohibition would not apply if there is a sale of a business or a part of a business and, as a part of the sale, 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, immediately following the sale, the seller becomes an employee of the purchaser. Notably, employers would be able to protect their intellectual property through narrower clauses.
The Act, if passed, would protect vulnerable workers by amending the ESA to establish a licensing regime for temporary help agencies (THAs) and recruiters. This regime would, among other things:
Some additional measures proposed in the Act include:
The Act would make it easier for internationally trained immigrants to get licensed to practice in certain regulated professions and trades such as law, accounting, architecture, engineering, electrical and plumbing. Specifically, the Act would amend the Fair Access to Regulated Professions and Compulsory Trades Act, 2006 by prohibiting Canadian work experience requirements for professional registration and licensing unless an exemption from the prohibition is granted, for example, based on a demonstrated public health and safety risk. The Act would also require regulated professions to ensure they comply with any regulations respecting English or French language proficiency testing requirements.
If passed, the Act would amend the Occupational Health and Safety Act by requiring the owner of a workplace to provide access to a washroom to persons making deliveries to or from the workplace. Exceptions would be made if providing access would not be reasonable or practical for reasons relating to the health or safety of any person at the workplace, including the worker who requests to use a washroom. Other considerations for granting an exemption would include, but are not limited to, the nature of the workplace, the type of work at the workplace, the conditions of work at the workplace, the security of any person at the workplace, and the location of the washroom within the workplace. Access would not need to be provided if the washroom is in, or could only be accessed through, a dwelling.
If passed, the Act would help employers cope with the impacts of COVID-19 by amending the Workplace Safety and Insurance Act, 1997 (WSIA) to allow a significant portion of the Workplace Safety and Insurance Board’s current reserve (valued at $6.1 billion) to be distributed to Schedule 1 employers as defined in the WSIA, provided the amount of the insurance fund meets a sufficiency ratio.
Employers are encouraged to become familiar with the changes proposed in the Act that, if passed, would apply to them. Because the legislative process in relation to the Act is in its early stages, employers should be aware that the Act might not ultimately pass, or could be passed in a form different from its current version.
