Ontario Introduces Employee Friendly Legislation That Includes Non-Competition Ban | Bennett Jones LLP

The Ontario government tabled legislation on October 25, 2021, which, if passed, will prohibit non-competition in employment contracts, force employers to adopt a “work disconnection” policy and require that workers Temporary help agencies and recruiters be licensed, among other changes.

Bill 27: Labor for Workers Act 2021 includes proposed changes to various employment-related legislation as outlined below. The proposed changes are based on recommendations made by experts from the Ontario Workforce Recovery Advisory Committee. While the Committee has consulted with a range of workers, employers and unions throughout 2021, Bill 27 is very “pro-worker”.

If Bill 27 is passed, changes to the Employment Standards Act, 2000 will include the following:

  • Prohibition of non-competition: Employers will be prohibited from entering into non-competition agreements with their employees. Non-compete agreements are intended to prevent employees from seeking other work opportunities that compete with their previous employer’s business. after termination of employment (for example, 12 months after termination of employment). The Amendments do not prohibit: (1) an employer prohibiting an employee from competing with the employer’s business during use; or (2) the use of a non-compete agreement related to the sale of a business.

    The changes also do not prohibit an employer to protect its confidential information, intellectual property and customer relationships by using more restrictive covenants, including non-solicitation clauses prohibiting the solicitation of employees and customers.

    As currently drafted, the non-competition ban appears to come into effect on October 25, 2021 and does not appear to apply retroactively to non-competition entered into before that date. However, as the proposed legislation was only adopted at first reading, it remains subject to potential changes.

  • “Disconnection from work” policy: Employers with 25 or more employees (as of January 1 of each year) will be required to develop a “work disconnection” policy by March 1 of this year. This policy will address the practice of not engaging in work-related communications such as phone calls or emails, after a certain time of day, in order to allow the employee to be free to perform work. Details on what information to include in the policy will be included in a regulation that has not yet been published.

    The policy should be in written form and a copy of the policy should be provided to all employees within 30 days of the preparation of the policy. An employer will also be required to keep a copy of each written policy on workplace disconnection for three years after the policy ends.

  • License Requirements: Temporary help agencies and recruiters will be prohibited from acting as such without first obtaining a license from the Director of Employment Standards. The changes will also prohibit individuals or businesses from using the services of an unlicensed agency or recruiter.

    Licenses will need to be renewed annually and will not be transferable. A public database listing all active, revoked or suspended licenses will also be available.

    The amendments also include a prohibition on any possible act of retaliation by a recruiter against an employee because of an employee’s compliance with the Employment Standards Act, 2000 or ask a recruiter to do the same.

    The government press release indicates that this part of the bill may not enter into force until 2024.

The proposed changes to the Workplace Safety and Insurance Act, 1997 include the following:

  • Surpluses: The Workplace Safety and Insurance Board (WSIB) will be allowed to distribute surpluses from its insurance fund among Schedule 1 employers to mitigate some of the impacts of COVID- 19.
  • Rationalization of services: The WSIB will be allowed to work with entities like the Canada Revenue Agency to streamline payments for businesses. This will allow businesses to have a more efficient way of submitting bonuses and payroll deductions.

Some of the other notable changes to other pieces of legislation also include:

  • Access to toilets: Businesses will be required to provide washroom access to delivery people who pick up or deliver anything to the business, with limited exemptions.
  • Professionals trained abroad: Regulated professions will be prohibited from including a Canadian experience requirement as a qualification for a foreign-trained professional to obtain a license to practice the profession. Certain exemptions from this ban are foreseen for reasons of public health and safety.
  • Food industry: The Ministry of Agriculture, Food and Rural Affairs will be authorized to collect information related to the agribusiness workforce to ensure that the government can improve the coordination of services such as immunization and COVID-19 tests.

Key points to remember:

  • Many employers have historically included non-compete provisions in their standard employment contracts in an attempt to protect their business, knowing that given the case law there was a risk that a court would not enforce non-competition. . Employers should review their model employment contract to determine whether they will continue to use non-competition clauses. Although Bill 27 has not been passed and therefore does not yet have the force of law, it is likely that it will be given the majority government in Ontario and the date of entry into force of the law. ban on entering into non-compete agreements would then be on October 25, 2021. In addition, employers may want to review and update their non-solicitation provisions to ensure that they are likely to be enforceable and may offer some protection in the absence of non-competition.
  • Employers with 25 or more employees may wish to start thinking about what a “work disconnection” policy might look like for their organizations. Some employers already have policies on after-hours communication, but for those who do not, if Bill 27 is passed, it may require a cultural shift in the approach to organizing work after hours. hours and early consideration by management will ease the transition.
  • If Bill 27 is passed, employers will have an obligation to ensure that the temporary help agencies and recruiters they hire have the appropriate permits to operate. Employers should think about how they will track this information to ensure compliance.

About Michael S. Montanez

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