On February 18, 2022, Ontario’s Your guide to the Employment Standards Act (Guide) was updated to include two new chapters that provide guidance on recent amendments to the Employment Standards Act, 2000 (ESA) that first appeared in Bill 27, Working for Workers Act, 2021 (Bill 27). Bill 27 received Royal Assent on December 2, 2021 and came into force on that day.

The first new chapter of the Guide, Written policy on disconnecting from work, relates to an ESA amendment that requires employers with 25 or more employees to implement a written policy on disconnecting from work; the second new chapter, Non-compete agreements, relates to an ESA amendment that prohibits certain non-compete agreements.

The following summarizes the new requirement and prohibition and offers information about the guidance provided in the Guide’s new chapters.

Written Policy on Disconnecting from Work

Requirements

Employers that employ 25 or more employees are required to have a written policy on disconnecting from work (Policy) in place for all employees. They must provide a copy of the written policy to all employees.

In the first year of the requirement, employers that employ 25 or more employees on January 1, 2022 have until June 2, 2022 to have a Policy in place.

Beginning in 2023, employers that employ 25 or more employees on January 1 of any year must have a Policy in place before March 1 of that year.

“Disconnecting from work” is defined as “not engaging in work-related communications, including emails, telephone calls, video calls or sending or reviewing other messages, so as to be free from the performance of work.”

This requirement applies to all employees and employers covered by the ESA except the Crown, a Crown agency or an authority, board, commission or corporation whose members are all appointed by the Crown and their employees.

An employer that is required to have a Policy in place must also provide a copy of the Policy to its employees within 30 calendar days of the Policy being prepared or an existing Policy being changed.

The employer must also provide a copy of the Policy to any new employees within 30 calendar days of the new employee being hired.

The employer must include the date the Policy was prepared and the date any changes were made to the Policy.

Guidance

Counting employees

The updated guidance clarifies that to determine whether the 25-employee threshold has been met, employers must include:

• Locations in Ontario, all employees at each of its locations.
• All employees employed in Ontario of two or more employers that are treated as one employer under the ESA.
• Anyone who meets the definition of “employee,” including:
  
  • homeworkers
  • probationary employees
  • some trainees
  • officers of a corporation who perform work or supply services for wages
  • employees on definite-term or specific-task contracts of any length
  • employees who are on lay-off, so long as the employment relationship has not been terminated and/or severed
  • employees who are on a leave of absence
  • employees who are on strike or who are locked out
  • employees who are exempt from the application of part(s) of the ESA.

The guidance clarifies that assignment employees of a temporary help agency are not included in determining whether its client meets the 25-employee threshold. They should be included in the count to determine if the temporary help agency meets the threshold.

The guidance emphasizes that January 1 is the only relevant date for determining whether the employer meets the 25-employee threshold. Changes in the number of employees at a later point in the calendar year have no impact on whether the employer is required to have a Policy in place in that calendar year. 

Providing a copy of written policy to employees

The guidance indicates that an employer is not required to provide a copy of the Policy to employees annually if the Policy has not changed from the previous year.

The employer may provide the Policy to employees as:

• a printed copy
• an attachment to an email if the employee can print a copy
• a link to the document online if the employee has a reasonable opportunity to access the document and a printer (and knows how to use the computer and printer)

Policy content and length

The guidance acknowledges that apart from requiring the employer to include the date the Policy was prepared and the date any changes were made to the Policy, the ESA is silent regarding the information the employer must include in the Policy and its length. It is up to the employer to determines the Policy’s content.

As well, the guidance indicates that the ESA does not specify that the Policy must provide a right for the employee to disconnect from work and be free from the obligation to engage in work-related communications. The rights of employees to not perform work are established by other ESA rules, such as those pertaining to hours of work and eating periods, vacation with pay, public holidays, etc.

The guidance confirms that although they are not required to do so by the ESA, employers may include a provision in their written policies that gives an employee the right not to perform work when the ESA rules would permit work to be performed. This provision may amount to a greater right or benefit and may be enforceable under the ESA. The guidance provides that if the employer’s policy does not create a greater right or benefit, the policy is not enforceable under the ESA (although other ESA rules may apply, e.g., hours of work and eating periods, vacation with pay, public holiday rules). 

Application

The guidance confirms that the Policy must apply to all of an employer’s employees in Ontario, including management, executives, and shareholders if they are employees under the ESA. A Policy that applies only to some of an employer’s employees would not be in compliance with the ESA.

The guidance clarifies that the employer is not required to have the same Policy for all of its employees. The employer can have one Policy that applies to all of its employees, or its Policy can contain different polices (in a single document or in multiple documents) for different groups of employees.

The Policy may be a stand-alone document or it may be part of another document (e.g., a comprehensive workplace policies/procedures document). 

Employer record-keeping requirement

The guidance states that a copy of every Policy required by the ESA must be kept by employers for three years after it is no longer in effect.

Examples of what a “disconnecting from work” policy may address

The guidance provides the following examples of what a Policy may address:

• The employer’s expectations, if any, of employees to read or reply to work-related emails or answer work-related phone calls after their shift is over.
• The employer’s expectations for different situations, e.g., depending on:
  
  • time of day of the communication
  • subject matter of the communication
  • who is contacting the employee, e.g., client, supervisor, colleague
• The employer’s requirements for employees’ turning on out-of-office notifications and/or changing their voicemail messages when not scheduled to work in order to communicate that they will not be responding until the next scheduled work day.

Non-compete Agreements

Prohibition

Effective October 25, 2021, employers are prohibited from entering into employment contracts or other agreements with an employee that include a non-compete agreement.

A non-compete agreement is defined as an agreement, or any part of an agreement, between an employer and 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.

Guidance

Time-limited or geographically restricted

The guidance indicates that an agreement, or part of an agreement, may be considered a non-compete agreement whether or not it is time-limited or geographically restricted.

Prohibition applies before, during and after employment relationship

The guidance provides that the prohibition against entering into non-competition agreements applies before the employment relationship begins, during the employment relationship, and after it ends.

Exceptions to the prohibition

The guidance confirms the two exceptions to the prohibition, i.e., in certain circumstances upon the sale or lease of a business, and for those who hold the office of a chief executive or president.

Non-compete agreements entered into before October 25, 2021

The guidance confirms that the ESA does not prohibit non-compete agreements entered into prior to October 25, 2021,¹ but warns that employees may have greater rights under the common law.

Non-solicit and non-disclosure agreements

The guidance clarifies that the ESA does not prohibit non-solicit agreements or non-disclosure agreements but again warns that employees may have greater rights under the common law. As well, the guidance warns that since the proper terminology may not always be used in agreements, when determining whether an agreement falls within the definition of a non-compete agreement, it will be the substance of the agreement not the words used that will matter.

Enforcement

Finally, the guidance provides that employees, applicants for employment, and former employees can file a claim with the Ministry of Labour, Training and Skills Development if they believe:

• They entered into a prohibited non-compete agreement on or after October 25, 2021; or
• They were penalized because they refused to enter into a prohibited non-compete agreement.

The guidance also notes that the ESA does not prohibit employees and employers from resolving disputes about the enforceability of non-compete agreements in the courts.

Bottom Line for Employers

With the recent addition of these new chapters in the Guide, employers now have helpful information about how the requirement that employers implement a Policy will operate, and about the prohibition against employers entering into certain non-compete agreements. It remains possible that employers will receive additional clarification if the government releases a regulation addressing these topics. In the meantime, employers should begin the process of developing a Policy with the assistance of experienced employment counsel. As well, employers should refrain from entering into non-competition agreements unless they are contracting with an employee who falls within one of the exceptions outlined above.