Background

Bill 27, Working for Workers Act 2021(the "Act") introduced by the Ontario government on October 25th, 2021 for First Reading, will attempt to level the playing field for Ontario professionals through several changes. Most notably, it eliminates the use of non-compete agreements in employee contracts. This will be a step towards protecting employees entering into other work opportunities for the benefit and advancement of their careers and improving the support and standards for employees, along with a work policy for employees to disconnect, required by employees with 25 employees or more. This would mean employees would be expected to disengage from work-related communications during "off" hours, and employers could not seek recourse for such disconnection.

Minister Monte McNaughton, Minister of Labour Training and Skills Development, established the Ontario Workforce Recovery Advisory Committee, June 2021, undertaking the revival of Ontario's economy and how to better its future progress. The result is the Government's proposed changes to Bill 27.

Proposal

If passed, this Act would amend Ontario's Employment Standards Act 2000 (ESA) amongst other statutes in Ontario. This could attract global talent and provide the province with a competitive advantage, especially within industries where Canadian companies lack a leading edge.

Work Disconnect

If passed by the Act, Employers with 25 or more employees will be required to formally notify employees through written Policy about "disconnecting" from their work-related obligations and post at the end of each workday. The proposal addresses the meaning of disengaging from work-related communications such as emails, phone or video calls, sending or reviewing messages as per the employee's job description. Employees would be free from work performances following the end of each workday. The Policy drafted by employers must include the date it was prepared and any changes made, providing a copy to all employees within 30 days of preparation.

The employer would be subjected to a timeline of six months from the date of Royal Assent to draft and distribute a Policy.

Proscribe Non-Compete Agreements

Employers would be banned from including non-compete agreements into employee contracts and other contracts which could potentially prohibit employees from engaging in other opportunities, be it work, occupation or business that is in direct competition with the employee's current business, following the end of that relationship. If any employee were to sign such an agreement, this would be rendered void and violate the Act.

While the effort could assist the Canadian economy, there could be some setbacks for employers looking to protect their intellectual property and current and long-standing clients. In this regard, there is an exception to the Act. The legislation would still allow companies to forbid departing employees from using intellectual property, confidential information. It would still be allowed in the sale of a business or part of a business. As per the agreements of the sale, the purchaser and seller enter into a binding contract which forbids the seller from partaking in any activity, business, work, occupation, profession, project, or other related action that is in direct competition with the engagements of the purchaser acquiring the business after the sale, as well as after the seller becomes an employee of the purchaser. The goal is, to provide job mobility and limit competition barriers.

Further Changes Included are:

Lifted Barriers for Canadian Experience Requirements

Amendments to the Fair Access to Regulation Professions and Compulsory Trades Act, 2006, through the Act would remove existing barriers for access to jobs that match skills and qualifications. This would be applicable for Canadian experience requirements and internationally trained individuals. There will, however, still be requirements to ensure there is compliance with the regulation in respect to language proficiency in English or French.

Recruitment and Help Agency Licensing

If passed, the Act would add protection for vulnerable employees with amendments to the Ontario Employment Standards Act 2000 to establish a licensing system for recruiters and temporary help agencies. There would be a list of requirements for such as licensing to operate in the province. The licenses would then be issued by the Director of Ontario Employment Standards yearly.

Availability and Accommodation of Restrooms for Delivery Workers

The Act would require business owners to provide company restrooms for delivery workers if they are delivering or picking up items. This would amend the Occupational Health and Safety Act. Any exceptions would include that providing access would not be reasonable for the health and safety of any person at the workplace; if providing access would not be reasonable or practical regarding all circumstances, with several regards to specific circumstances relating to the current employees of the workplace and location of the washroom in the workplace.

COVID-19 Recovery and WSIB

Bill 27 could allow surpluses in the Workplace Safety and Insurance Board's (WSIB) Insurance Fund to be distributed to certain levels to business as an initiative to assist employers with the impacts of COVID-19. It could provide that the WSIB's current reserve be distributed to Schedule 1 employers as defined in WSIA if the amount of the insurance fund meets a sufficiency ratio.

Progress

This process is in the early stages, although as of October 25th, 2021, Bill 27 was conceded at First Reading. The Second Reading is expected to progress, with consideration and public consultation from a committee for additional deliberations. Employers should become aware of the proposed changes in the Act.

Future Impact

The wording of the legislation with respect to non-compete clauses will be important as many employers have non-compete clauses in their current contracts. As we know from Waksdale v. Swegon North America Inc., 2020 ONCA 391, if an employment contract contains a clause that violates the Employment Standards Act, the entire contract is void, even if the employer has no intention of enforcing the offending clause. An employer's action or inaction will not be enough to save an otherwise invalid contract. Employers will need to take another look at their contracts and may need to consider amending their contracts if the legislation does not address non-compete clauses that were entered into prior to the Amendments to the Employment Standards Act. Employers should be vigilant of the changes in the Employment Standards Act to reduce the risk of unwelcome surprises upon the termination of an employee.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.