Following Royal Assent for Bill 27, Ontario Workforce Recovery Advisory Committee Releases Report on The Future of Work in Ontario

On December 9, 2021, the Ontario government announced the release of The Future of Work in Ontario, the report from the Ontario Workforce Recovery Advisory Committee (the “Committee”).  The Committee was announced in June 2021 with a mandate to provide recommendations in the following areas:

  1. Economic recovery: How do we make Ontario the top destination with a world-class workforce and talent supply?
  2. Strengthening Ontario’s competitive position: In an increasingly remote, global and technologically advanced economy, how will we ensure that Ontario remains the best place in North America to recruit, retain and reward workers?
  3. Supporting workers: How will we ensure that Ontario’s technology platform workers benefit from flexibility, control and security?

The Committee’s interim report, released this past summer, led to legislative changes in Bill 27, the Working for Workers Act, 2021 (the “Act”). The final report contains 21 recommendations which may provide employers with some idea of potential additional employment and labour-related issues that the government may be considering for the future.

The Working for Workers Act, 2021 (Bill 27)

We discussed Bill 27 in a previous Focus Alert when it was first tabled. It was amended in Standing Committee and received Royal Assent on December 2, 2021. Two elements of the Act that have been widely discussed are the requirement for employers to have a policy on the right to disconnect and prohibition of non-compete agreements, which are recommendations that were contained in the final report.

The Right to Disconnect

Under the Act, employers who employ 25 or more employees are required to put a written policy in place with respect to disconnecting from work.  They have six (6) months from December 2, 2021 (June 2, 2022) to do so. No changes were made by the Standing Committee to further substantiate this “right to disconnect.”  “Disconnecting from work” is defined in the Act 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.” The Act states that a written policy must contain prescribed information, but there is no regulation prescribing such contents as yet.

Minister McNaughton, Ontario’s Minister of Labour, Training, and Skills Development, mentioned during legislative debates that the policies could include things such as clear expectations about e-mail response times and encouraging employees to use out-of-office notifications when they are not working.

Non-Compete Agreements

The Act prohibits employers from entering into an employment contract or other agreement with an employee that is, or that includes, a non-compete agreement. Any attempt to contract out of the prohibition will be void.

Since our previous Focus Alert, some sections of Bill 27 were amended. A notable change is that the prohibition of non-compete agreements does not apply to “executives.”  An “executive” is defined in 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.”

The prohibition of non-compete agreements will also not apply in the context of the sale of a business or part of a business where the purchaser and seller enter into an agreement prohibiting the seller from competing with the purchaser’s business after the sale and where the seller becomes an employee of the purchaser immediately after the sale.

The prohibition on non-compete agreements is deemed to have come into force on October 25, 2021.

The Future of Work in Ontario

The Future of Work in Ontario contains 21 recommendations.  Key areas of the report included training and education, independent contractor status, and support for workers in the gig economy. Recommendations included:

  • Recommendation 6: Reform training programs, building on the recent announcement of the Second Career program, to better serve those with weak employment history, including vulnerable and marginalized groups.
  • Recommendation 7: Partner with other levels of government to enhance lifelong learning, skills training and workforce development for Indigenous people.
  • Recommendation 8: Appoint an expert to design and test a portable benefits program, where contributors could be employers, workers and the government.
  • Recommendation 14: Create or clarify terms under which independent contractors are defined, for highly skilled workers who opt for this flexibility.
  • Recommendation 15: Create and recognize the dependent contractor category for gig or platform workers in the app-based space and give this category of worker basic employment rights, such as termination pay, minimum wage, minimum or core benefits, regular payment of wages, pay stubs for pay accountability and notice of termination with severance entitlements.
  • Recommendation 16: Require gig platform companies operating in Ontario to provide basic, easy-to-understand, full disclosure and transparency on payment, work allocation and penalties, suspensions or pay deductions.
  • Recommendation 17: Require contracting companies to be transparent by stipulating that they comply with employment standards, specifically with respect to worker classification. Clear and unambiguous acknowledgement that liability compliance rests with both the contracting and the subcontracted company is needed.
  • Recommendation 18: Simplify the exemptions section of the Employment Standards Act to make it easier to understand and enforce and more relevant to current and future workers.

In Our View

Whether or not the final report will result in further legislative changes remains to be seen. We will continue to monitor this issue and will report new developments to Focus readers.

With respect to the new prohibition on non-competes, the government noted when it tabled Bill 27 that non-solicitation clauses were not prohibited by the amendment. The addition of an exemption for executives also provides employers with more protection, as employers may be particularly concerned with maintaining the ability to prevent high-level employees from competing with the employer after their employment ends. Employers dealing with these issues are urged to seek legal advice in order to understand their new obligations under the Act.

The right to disconnect has attracted a great deal of attention, but does not have much substance in its current form under the Act. Employers are reminded that the deadline to put a policy in place is June 2, 2022. We are hopeful that greater clarity on the requirements of a right to disconnect policy will come either in the form of regulations or further guidance from the Ministry of Labour, including whether or not any employees will be excluded from the scope of the policy, such as those currently exempt from hours of work provisions in the Employment Standards Act, 2000. We will keep Focus readers informed of any further developments on this issue.

For more information on your rights and obligations as an employer including right to disconnect policies, please contact Céline Delorme at 613-940-2763 or Erica Bennett at 613-940-2748.

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