The Ontario Government has introduced legislation to ban non-compete agreements for employees, require recruiters and temporary help agencies to be licenced, and promote healthy work-life balance through mandatory policies dealing with employee rights to disconnect from work at the end of the day.
According to the press release, the stated purpose of the proposed legislation – dubbed the Working for Workers Act, 2021 – is to “better protect, support, and attract workers to the province”. Non-compete agreements are being targeted because they are said to restrict work opportunities, suppress salary increases and wage growth. The legislation passed the first reading on October 25, 2021.
If passed, the proposed legislation would impose a number of changes, highlights of which include:
- Mandatory Policy on Disconnecting from Work – Employers with 25 or more employees (as of January 1st of each year) would be required to have and distribute a written policy about employees disconnecting from work, relating to engaging in work-related communications, including emails, telephone calls, video calls or the sending or reviewing of other messages. By example, the policy might address expectations about response times for emails and encouraging employees to turn on out-of-office notifications when they aren’t working.
- Ban Non-Compete Agreements – Employers would be prohibited from imposing non-compete agreements that prevent people from exploring other work opportunities that are in competition with the employer’s business after the employment relationship between the employee and employer ends.
Employers will still be able to protect their intellectual property and confidential information through narrower clauses, and non-compete clauses would still be allowed in some cases where a business is sold. The proposed legislation does not prohibit competitive behaviour during the course of employment, nor does it ban clauses which block ex-employees from soliciting their former employer’s clients (often referred to as non-solicitation clauses or agreements).
As drafted, the legislation appears to be intended to operate prospectively, by banning employers from entering into new non-competition agreements (as of October 25, 2021), while leaving existing arrangements in place; however, the way in which the Act will be interpreted and applied remains to be seen. It is also not clear the extent to which the proposed amendments to the legislation will impact on any implied common law or fiduciary obligations which may exist.
- Licencing for Recruiters and Temporary Help Agencies – Recruiters and temporary help agencies would be required to have a licence to operate in the province to help protect vulnerable employees from being exploited. Licences would automatically expire after one year (except where a longer period is prescribed by regulation), and a public record would be available of all active, revoked and suspended licences.
- Improve Access for Internationally Trained Professionals – The legislation would help remove barriers, such as Canadian experience requirements, for internationally trained individuals to get licenced in a regulated profession and get access to jobs that match their qualifications and skills.
Other proposed changes include:
- Requiring business owners to allow delivery workers to use a company’s washroom if they are delivering or picking up items;
- Allowing surpluses in the Workplace Safety and Insurance Board’s (WSIB) Insurance Fund to be distributed over certain levels to businesses. See our prior In A Flash Ontario WSIB Announces New Financial Measures at AGM;
- Enabling the WSIB to work with entities, like the Canada Revenue Agency (CRA), to streamline remittances for businesses, enabling a way to give them an efficient one-stop-shop for submitting premiums and payroll deductions; and
- Allowing the Ministry of Agriculture, Food and Rural Affairs to collect information related to the agri-food workforce to ensure the government can enhance the coordination of services such as vaccination and testing.
We will continue to update our clients with information as soon as it becomes available. If you have any questions about the provincial announcement and the proposed legislation, or any questions relating to workplace law generally, please do not hesitate to contact a Mathews Dinsdale lawyer.