Ontario government to ban non-compete agreements, require employers to implement policy with respect to disconnecting from work

October 27, 2021 − by Emily Kroboth − in Employment and Labour, General − Comments Off on Ontario government to ban non-compete agreements, require employers to implement policy with respect to disconnecting from work

On October 25, 2021, the Ontario government introduced the Working for Workers Act, 2021 (Bill 27). If passed, this new law will bring several important changes to Ontario workplaces.

A ban on non-compete clauses

One major change that Bill 27 proposes is a ban on entering into non-compete agreements other than those entered into by a person selling a business. In its press release, the Government states that, through this change, it is aiming to make Ontario more attractive to global talent and facilitate career advancement. It is not entirely clear whether Bill 27 will render existing non-compete agreements unenforceable, but the general rule is that new laws do not apply retrospectively unless the Bill clearly says so, which Bill 27 does not. In recent years, courts have rarely enforced non-compete agreements signed by employees – other than an owner selling their business – so it is questionable what practical effect Bill 27 will have in this regard.

“Disconnect from work” policies

Another significant change Bill 27 proposes is requiring employers with 25 or more employees to develop “disconnecting from work” policies. While the proposed legislation does not provide any specifics, in announcing this new law, the Government stated that these policies would attempt to solidify the boundary between work hours and off hours by addressing issues such as the expected response time for emails received after-hours. If passed, Ontario will be the first province in Canada to legislate policies on disconnecting from work. Other jurisdictions, such as France, have introduced similar legislation requiring employers to produce a “charter of good conduct”, which covers expectations regarding email communication during off hours.  Employers should begin thinking about what their “disconnect from work” policies will look like, and how best to optimize their systems and workflows to meet their obligations under Bill 27.

…and more changes

Bill 27 also addresses barriers that internationally-trained professionals face when attempting to get licensed in Ontario. Bill 27 will remove Canadian work experience requirements, reduce official language proficiency testing and allow applicants to practice their chosen professions more quickly during emergencies, such as a global pandemic. Additionally, Bill 27 requires temporary help agencies to acquire a licence to operate with the goal of protecting workers from predatory behaviour. Finally, Bill 27 gives delivery drivers the right to access the washrooms at the places of business they are delivering items to or picking up from.

Employers should begin thinking about preparing a “disconnecting from work” policy and also review their template employment agreements to determine whether there is any “non-compete” clause that must be removed after Bill 27 takes effect. Please reach out to our Employment and Labour group if you have any questions about Bill 27 and its impact on your business

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