We have previously written about Bill 27, Working for Workers Act, 2021 in November. Since the last time we wrote about it, Bill 27 has received Royal Assent. Employers now have a limited amount of time to ensure that they are in compliance with certain new provisions, including non-compete agreements and the right to disconnect policies. Other provisions such as those requiring licensing for temporary help agencies and access to washrooms for delivery drivers will be coming into force in the coming months, though advance preparation will ease the transition for affected businesses.
Non-competes Are Void As of October 25, 2021
As we wrote in November, employers need to review existing employment agreements that contain non-compete clauses. Having received Royal Assent, Bill 27 has effectively amended the Ontario Employment Standards Act, 2000 (“ESA”) to prohibit non-compete agreements. The probation on non-competes comes into force on October 25, 2021.
Under Bill 27, a non-compete is defined as “an agreement or 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”.
Bill 27 does provide for two exceptions from the prohibition on non-competes as follows:
- If the non-compete relates to the sale of the business and is entered into between a purchaser and a seller; or
- Executives are also exempt and employers are able to subject their executives to non-compete clauses. Bill 27 provides that an executive is “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”.
Employers should consider reviewing their standard employment agreements and consider whether, in light of the changes imposed by Bill 27, changes need to be made to any provisions in employment agreements relating to non-solicitation, confidentiality or similar provisions that could afford employers continued protection in the case of the departure of a key employee. A thorough review of job titles and responsibilities should also be undertaken as quickly as practicable. A job title alone is unlikely to allow an employer to restrict an employee’s future job-seeking prospects. There may also be situations where an employee is very senior but does not have the appropriate title that would reflect the responsibilities. Therefore, it will likely be a worthwhile exercise to undertake a thorough review of all senior jobs and standard agreements used for those positions to ensure that there is no mismatch between the legislation, the employer’s intent, and the actual executed agreements.
As non-compete provisions are now void under the ESA, and not just viewed as unenforceable under the common law, continuing to include non-compete provisions in non permitted agreements could impact the enforceability of other provisions in these agreements. This is a great opportunity to revisit the entire employment agreement, especially if there are restrictive covenants included.
Mandatory Written Policy on Disconnecting From Work
Under the new requirements of Bill 27, employers with 25 employees or more as of January 1, 2021, will be required to create and maintain a written policy outlining “disconnecting from work”. The term is defined 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”.
Employers will only have until June 2, 2022, to put the policy in place.
Introduction of Licensing for Temporary Help Agencies and Recruiters
Bill 27 introduces a new licensing requirement for Temporary Help Agencies and recruiters. Further, the Bill also includes language prohibiting “against knowingly engaging or using the services of an unlicensed temporary help agency or recruiter”.
We will continue to monitor the requirements that will apply to the licensing process and will update our readers as the application process is unveiled.
It should be noted that Minister McNaughton has been quoted as saying that “employers who used “deceitful recruiters” could be required to repay workers for illegal fees charged”. Therefore, if you operate or work at a business that uses the services of a Temporary Help Agency or Recruiter, this change could have a significant impact on your operations as the licensing process is rolled out.
Introduction of the Requirement to provide Washroom Access to Delivery Drivers
Under Bill 27, and subject to a small subset of exemptions, business owners would be required to provide “access to a washroom […] to a worker who is present at the workplace to deliver anything to the workplace, or to collect anything from the workplace for delivery elsewhere”.
This requirement will come into force on a date to be announced in the future, however, business owners may wish to consider the options available to them to ensure that they are able to comply once the requirement comes into force, as there may not be a lot of time provided for compliance after such an announcement is made.
Employment Lawyers Helping Employers and Employees Ensure Compliance with Legal Obligations
The Mississauga employment lawyers at Bader Law regularly assist business owners and entrepreneurs in ensuring compliance with their legal and financial obligations. Contact us online or at (289) 652-9092 to learn what we can do for you and your business.