To wrap up 2021, we have highlighted key developments in Canadian labour and employment law, with a focus on Ontario:
- Bill 27 – Working for Workers Act: On December 2, 2021, the Ontario government passed the Working for Workers Act, 2021, (the “Act“) which introduces significant changes to Ontario’s employment law, including:
- A Right to Disconnect from Work Policies: Employers subject to the Employment Standards Act, 2000 (“ESA“) with 25 or more employees must have a written policy which outlines employees’ right to disconnect from work. The term “disconnecting from work” means not engaging in work-related communications (g. emails, calls) and not sending or reviewing any messages, so that employees are free from the performance of work outside of normal working hours. Employers have six months from December 3, 2021 implement the policy.
- No Non-Compete Agreements: Employers subject to the ESA are prohibited from entering into non-compete agreements with employees. Non-compete agreements are those that prohibit the employee from working for or running a competitive business after the employment relationship has ended.
There is an exception to the prohibition on non-competition agreements in the event of a sale or lease of a business and for executive-level employees.
This amendment to the ESA is deemed to be in force as of October 25, 2021, and all non-compete agreements entered into before this date will remain unaffected. Non-solicitation, confidentiality, and assignment of intellectual property agreements are still permissible.
The Act brings about a number of additional changes that will be relevant for employers which are fully summarized here.
- Ontario severance pay obligations are based on global payroll: In Hawkes v Max Aicher (North America) Limited (“Hawkes”), Ontario’s Divisional Court ruled that the $2.5 million payroll threshold for triggering the severance pay provisions under the ESA are based off of an employer’s global payroll. This means that many employers who were not paying severance pay will now have to do so.
Please see our full blog on the decision here.