Introduction
How is "disconnecting from work" defined by Bill 27?
What do the "disconnecting from work" provisions mean for organisations?
What should a "disconnecting from work" policy consider?
Does a "disconnecting from work" policy apply to all employees?
Do the "disconnecting from work" provisions impact other sections of the ESA?
How is the 25-employee threshold counted?
What is impacted by the Bill 27 prohibition on non-competes?
Will a voided-non-compete void the entire employment agreement?
Are there any exceptions to the prohibition on non-competes?
How can employers respond?


Introduction

On 2 December 2021, Bill 27 was passed into law. Among other things, Bill 27 adds new provisions to the Ontario Employment Standards Act 2000 (ESA), including:

  • requiring Ontario employers with 25 or more employees to have a written "disconnecting from work" policy by 2 June 2022; and
  • prohibiting Ontario employers from entering into non-compete agreements with employees, from 25 October 2021 onwards.

This article set out further details on the ESA amendments through a series of frequently asked questions.

How is "disconnecting from work" defined by Bill 27?

"Disconnecting from work" is defined to mean:

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.

What do the "disconnecting from work" provisions mean for organisations?

Bill 27 does not create a right for employees to disconnect from work. Bill 27 simply requires most employers to create a policy that sets out the employer's approach to disconnecting. The ESA does not stipulate what this approach must be.

Employers must have their disconnecting from work policy in place by 2 June 2022 and must:

  • provide a copy of their "disconnecting from work" policy to each employee within 30 days of preparing the policy; and
  • retain copies of the disconnecting from work policy for three years after the policy ceases to be in effect.

What should a "disconnecting from work" policy consider?

Bill 27 requires the policy to include the date it was prepared and any dates that it was amended. This is the only stipulated requirement and so the remaining policy terms are up to the employer.

Appropriate terms will vary by organisation. However, suggested content includes:

  • the scope of disconnecting and whether it is limited to work-related communications;
  • whether there are certain windows of time outside of which employees may disconnect;
  • whether there are certain circumstances/work that should be included in – or excluded from – any right to disconnect; and
  • expectations for response times to voicemails and emails and when to set an "out of office" status.

Does a "disconnecting from work" policy apply to all employees?

The policy must apply to all of an employer's employees who work in Ontario – regardless of role and whether the employee is full time, part time or temporary. This includes management and executive employees. While an employer may have a single policy that applies to all its employees in the same way, an employer may also create different policies for different groups of employees.

Do the "disconnecting from work" provisions impact other sections of the ESA?

There is nothing in Bill 27 to indicate that "disconnecting from work" policies will impact or replace the usual ESA provisions that control how much employees work, such as hours of work, periods of rest and overtime provisions.

How is the 25-employee threshold counted?

Only those employers with 25 employees or more must have a written disconnecting from work policy. This considers all of the employer's Ontario employees, even if they are stretched across multiple locations. For example, if an organisation has two locations with 15 employees each, there are 30 employees total and so a policy must be in place at each location.

A "non-competition" provision is a type of restrictive covenant that prohibits an employee from working with competitors of their employer after their employment ends.

This is different from a "non-solicitation" provision, which prohibits employees from soliciting (recruiting) employees or customers of their employer, after their employment ends.

What is impacted by the Bill 27 prohibition on non-competes?

Bill 27 prohibits Ontario employers from requiring employees to enter into non-competes:

  • Non-compete agreements/non-compete provisions entered into on or after 25 October 2021 will be void or unenforceable.
  • Non-compete agreements and non-compete provisions entered into before 25 October 2021 continue to be enforceable.

Non-solicitation provisions are not affected by Bill 27. They can still be used and enforced.

Will a voided-non-compete void the entire employment agreement?

There is nothing in Bill 27 to indicate that a void non-compete provision would also void the rest of the employment agreement. Generally, the court would only strike out the offending section and not the clauses around it.

Are there any exceptions to the prohibition on non-competes?

Are there any exceptions to the prohibition on non-competes? Bill 27 sets out only two exceptions. Employers may still enter into non-competition agreements:

  • with an employee who is an "executive". Bill 27 defines an executive 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;
    • chief corporate development officer; or
    • any other chief executive position; and
  • in the course of a sale of a business, the purchaser of the business may enter into a non-competition agreement with the seller if the seller becomes an employee of the purchaser immediately following the sale.

How can employers respond?

Employers will need to review employment contracts and assess other ways to protect the interests of their business. This may include, for example, more restrictive non-solicitation and/or confidentiality provisions.

For further information on this topic please contact Lisa Cabel or Richelle Pollard at KPMG Law by telephone (+1 416 777 8000‚Äč) or email ([email protected] or [email protected]). The KPMG Law website can be accessed at www.kpmg.com.