Ontario Says “No” to Non-Competes and “Yes” to Disconnecting from Work Policies

December 01, 2021 − by Ernest Tam − in Employment Standards − Comments Off on Ontario Says “No” to Non-Competes and “Yes” to Disconnecting from Work Policies

In a previous blog post, we had alerted readers to the Ontario government’s intention to ban non-compete agreements and require employers to implement a disconnecting from work policy. On November 30, the Ontario government followed through with its intention and passed the Working for Workers Act, (“Bill 27”). We now wait for this legislation to receive royal assent – the final step in the legislative process before the bill becomes law.

Non-Compete Agreements

Under the legislation employers will be prohibited from entering into any agreement that is, or includes, a non-compete agreement with the employee. Any non-compete agreement that an employer enters into with an employee will be void. However, there are two circumstances where non-compete agreements will be permitted: (1) when there is a sale or lease of a business or a part of a business and the seller/lessor becomes an employee of the purchaser as part of the sale or lease; and (2) when the employee is an executive. The legislation defines “Executive” 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.”

“Disconnecting from Work” Policies

Employers with 25 or more employees on January 1st of any year will need to ensure that they have a written policy in place for all employees with respect to disconnecting from work before March 1st of that year. “Disconnecting from work” means “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 must also provide a copy of the written policy with respect to disconnecting from work within 30 days of preparing the policy to existing employees, or within 30 days from the date that a new hire becomes an employee. For 2022 only, employers will have six months after the day Bill 27 receives Royal Assent instead of March 1, 2022 to prepare a disconnecting from work policy.

Temporary Help Agencies and Recruiters

Bill 27 also introduces significant changes to temporary help agencies and recruiters. Bill 27 establishes a mandatory licensing framework for temporary help agencies to operate and for employment recruiters to act as such. Recruiters and employers are also prohibited from charging foreign nationals a fee in connection with their recruitment or employment. The Director of Employment Standards may refuse to issue or renew a licence if an applicant has ever contravened this prohibition and can revoke or suspend a license on these grounds. These changes will not immediately come into force upon Royal Assent and more information will be provided when the regulations governing the licensing framework become available.

Media reports indicate that Bill 27 is expected to receive Royal Assent imminently. As a result, we encourage our readers to 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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