What the “Working for Workers Act, 2021” really means for your business and employment
On November 30, 2021 the Ontario government passed Bill 27, An Act to amend various statutes with respect to
employment and labour and other matters, commonly referred to as the “Working for Workers Act, 2021” (the “Act”) with amendments to various employment-related statutes, including Employment Standards Act, 2000 (the “ESA”). The changes to the ESA include the much-hyped (1) requirement for certain employers to have a ‘disconnecting from work’ policy and (2) prohibition of non-compete agreements in certain employment contracts. Though this legislation has been widely reported, some commentators appear to have misunderstood what this new law actually does (spoiler alert: it may not be as dramatic a change as you think).
Disconnecting from Work
An employer with 25 or more employees will be required to have a written policy in place about disconnecting from work. “Disconnecting from work” is defined in the new legislation 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”.
Although some are celebrating this new legislation as creating an absolute right to disconnect from work, the new legislation does not go so far as to make it illegal for your boss to contact you after hours.
Rather, this new law simply requires certain employers to have a policy in place about disconnecting from work. At this point, the legislation provides no particulars or mandates as to the contents of such policies apart from requiring the policy to include the date it was created and the dates of any subsequent changes. The Act does, however, include a provision that the policies are to include such information “as may be prescribed.” Subject to any future prescriptions of the information to be included, we can likely expect ‘disconnecting from work’ policies to vary widely as between organizations depending on the nature of the employer’s business and taking into account different employees’ roles and responsibilities, as well as the reasonable expectations of customers or clients.
This new workplace policy requirement will come into force when the Act receives Royal Assent (at a date yet to be determined).
Prohibition of Non-Competes
The new law also includes a much-anticipated prohibition of non-compete agreements – deemed in force as of October 25, 2021. A non-compete agreement is an agreement or, more typically, a clause in an employment agreement that purports to prohibit the employee from engaging in competitive conduct for a certain period of time after the employment relationship ends.
However, the new non-compete prohibition does not apply to everyone. Non-competes are still permitted for the following types of employees:
- The seller of a business where the seller becomes an employee of the purchaser as part of the sale; and
- “Executive” employees, defined in the new law 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”.
Further, this legislative prohibition on non-competes largely codifies the already-existing state of employment case law. Prior to the Act, non-competes in employment contracts were already prima facie invalid at law and only enforced in very narrow circumstances where reasonable (i.e. in terms of duration and geographical scope of the agreement) and in the public interest. Though now non-executive employees have certainty that non-compete provisions or agreements cannot be enforced against them.
For more information about the “Working for Workers Act, 2021″ and how it may affect your work or business, feel free to contact any of the lawyers at Mathers McHenry and Co.