The government of Ontario passed the omnibus Bill 27, Working for Workers Act, 2021 (the “Act”), which amends a number of employment-related laws. The most notable changes addressed in this article include the requirement to implement a right to disconnect from work policy and the prohibition of most non-compete agreements.

The Act received royal assent and entered into effect on 2 December 2021, with provisions entering into effect at different times.

Key details

The Act aims to improve the mental health and work-life balance of workers in the province and attract skilled talent. 

The right to disconnect from work policy

The Act requires all employers located in Ontario with 25 or more employees to have a written policy regarding their employees’ right to disconnect from work. Under the Act, disconnect from work precludes, outside of normal work hours, employees, “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 with 25 employees as of 1 January 2022, should comply with this new requirement by 2 June 2022, six months after the Act entered into effect on 2 December 2021. On a go-forward basis, any employer having 25 employees on 1 January 2022, will have until 1 March 2022, of that year to create a right to disconnect policy. Employers must provide every employee with a copy of the written policy within 30 days after it is created. 

The Act does not include any specific guidance on a disconnecting from work policy in order to give employers the flexibility to develop a policy that fits their business and operational needs. However, it is likely that the Ontario government will promulgate a regulation detailing what must be included in such policy in the near future. In addition, the Act is unclear whether there will be exemptions to the right to disconnect for certain sectors such as agriculture, healthcare, hospitality and transportation. 

The new requirement applies to all employees in Ontario and includes executive or other high-ranking employees. In addition, employers must retain copies of the policy and its amendments (if any) for three years after the policy is no longer effective.

Employers might want to carefully craft such a policy in collaboration with their employees’ representatives (if any) to ensure the balance between their business needs and their employees’ well-being. Communication in educational sessions with employees to review the terms of the policy is likely to be considered best practice.

Prohibition on non-compete agreements

From 25 October 2021, Ontario employers are prohibited from entering into non-compete agreements with most employees. The change aims to attract and retain global employees. A non-compete agreement is defined by the Act as, “an agreement, or any part of an agreement, between an employer and an employee that prohibits the employee from engaging in any business, work, occupation, profession, project or other activity that is in competition with the employer’s business after the employment relationship between the employee and the employer ends.

Non-compete agreements are possible only with the two following parties:  

  • Executives defined by the Act 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.”

    Given the very specific definition given by the Act, it is unclear whether companies that use different naming titles such as “Head of People and Culture” instead of “Chief Human Resources Officer” will be able to take advantage of the exception. Therefore, companies may want to consider carefully choosing the wording they use when describing a position in their non-compete agreement to avoid any uncertainty.
  • Sellers of all or part of their business if (1) the purchaser and seller enter into an agreement that prohibits the seller from engaging in any business, work, occupation, profession, project or other activity that is in competition with the purchaser’s business after the sale or if (2) immediately following the sale, the seller becomes an employee of the purchaser.

The Act voids any non-compete agreements entered into after 25 October 2021, however, preexisting non-compete agreements before that date remain valid. Employers would still be able to protect their intellectual property through narrower clauses and the Act does not prevent employers from entering into non-solicitation or confidentiality agreements. Such agreements should be carefully reviewed to ensure employers are sufficiently protected following the departure of their employees.

Other changes

Other changes introduced by the Act include, among other things, the following requirements:

  • Recruiters and temporary help agencies must be licensed in Ontario. Employers will be required to only hire recruiters or temporary help agencies that hold a valid license in Ontario.  
  • Employers are prohibited from hiring a foreign national who used a recruiter who charged them a fee.

Additional resource

Bill 27, Working for Workers Act, 2021