Working For Workers Act, 2021: Significant Changes to Employment Law in Ontario

The Working for Workers Act, 2021 (the “Act”)[1] became law when it received Royal Assent on December 2, 2021. The Act introduces significant changes to employment laws in Ontario, including the following:

  • Requirement that employers with 25 or more employees institute a disconnect from work policy;
  • Prohibition on employers from entering into non-compete agreements with employees, with limited exceptions; and
  • Requirement that temporary help agencies and recruiters obtain a license to operate in Ontario with a prohibition against a recruiter or employer charging fees to foreign nationals.

These changes are discussed in more detail below.

DISCONNECT FROM WORK POLICY

The Employment Standards Act, 2000[2] was amended effective December 2, 2021 to require employers with 25 or more employees to institute a written policy for all employees permitting the right to disconnect from work. Disconnecting from work is defined 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”.

Employers will have until June 1, 2022 (six months from the time the Act received Royal Assent) to comply with the requirements of the written policy on disconnecting from work. Regulations are expected to come into effect in the future which will prescribe the terms required to be contained in the policy.

PROHIBITION OF NON-COMPETE AGREEMENTS

The Employment Standards Act, 2000 was amended retroactive to October 25, 2021, to prohibit employers from entering into an employment contract or other agreement with an employee that is, or that includes, a non-compete agreement. Non-compete agreements restrict employees from engaging in any business, work, occupation, profession, project and/or other activity that is in competition with their former employers’ business after the cessation of the employment relationship.

This prohibition is subject to certain exceptions such as an employee who is an executive. An executive is defined 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.” Another exception is in the context of the sale of a business.

Non-solicitation covenants and covenants protecting employers’ confidential information and intellectual property remain permissible and unaffected by the Act.

LICENSING FOR TEMPORARY HELP AGENCIES AND RECRUITERS

Temporary help agencies and recruiters are required to obtain a specific license in order to operate in Ontario. The Employment Protection for Foreign Nationals Act, 2009[3] was amended effective December 2, 2021 to include a prohibition against a recruiter or employer from charging fees to foreign nationals.

On a future day to be named by proclamation of the Lieutenant Governor, the Employment Standards Act, 2000 will also be amended to require those applying for a license to act as a recruiter to provide statements that they (i) have not charged fees to foreign nationals; and (ii) are aware of, (a) the new prohibitions contained in the Employment Protection for Foreign Nationals Act, 2009 regarding the charging of fees to foreign nationals, and (b) the fact that the Director of Employment Standards will refuse to issue a license or will revoke/suspend a license if the applicant has charged fees to a foreign national.

FINAL THOUGHT

Ontario is the first jurisdiction in Canada to mandate disconnecting from work policies and to prohibit an employer from entering into an employment contract or other agreement with an employee that is, or that includes, a non-compete agreement. Ontario employers will want to carefully review and update their employment contracts, agreements and policies to ensure compliance with the new significant changes in Ontario employment laws. We should also expect a reasonable likelihood that with the new world of work from home brought on by the pandemic, and expected to continue to some extent, that other provinces will take note and introduce their own versions of the ‘right to disconnect’ portions of this novel legislation.

Should you have any questions or require assistance in reviewing and updating your employment contracts, agreements or policies, please contact Michael Furyk at Alexander Holburn Beaudin + Lang LLP or another member of our Labour and Employment Team.


[1] Working for Workers Act, 2021, S.O. 2021, c. 35

[2] Employment Standards Act, 2000, S.O. 2000, c. 41

[3] Employment Protection for Foreign Nationals Act, 2009, S.O. 2009, c. 32

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