Category: Employment Legislation

The Ontario Employment Standards Act (ESA) provides many workers that are classified as employees with minimum rights and protections. These include a range of things, including minimum wage, rights upon termination and severance of employment, and several different types of leave, including vacation time. 

However, the ESA has recently been amended to exclude a subset of individuals that meet the definition of “business consultant” or “information technology consultant.” This article looks at this new exemption, including the conditions that need to be satisfied for business and information technology consultants to be excluded from the application of the legislation. 

The ESA applies to Ontario employees, subject to a range of exceptions

As we have written about before, the employment standards set out in the ESA apply to an employee and their employer if either the employee’s work is to be performed in Ontario or if it is to be performed both inside and outside Ontario in circumstances where the work performed outside Ontario is a continuation of the work performed inside.

To benefit from the ESA, the worker needs to be classified as an employee rather than an independent contractor. Under the ESA, an employee is defined to include a person who:

• performs work for, or supplies services to, an employer for wages; 
• receives training from an employer, provided that the skill being trained is used by the employer’s employees; or
• works for compensation from their residence but is not an independent contractor. 

See our previous articles on how to distinguish between employees and independent contractors.

Section 3 of the ESA contains a range of exceptions that carve out particular employees and employers from the scope of the legislation. A key exception is for employment relationships covered by federal jurisdiction, in respect of which the Canada Labour Code imposes employment standards. However, the ESA contains a list of other people that are excluded, such as holders of political, religious, or judicial office or elected office in an organization. 

The Working for Workers Act 2022 made a suite of changes to Ontario employment law

Bill 88 received royal assent and became law on April 11, 2022. The Working for Workers Act 2022 made significant changes to the employment law landscape in Ontario, including by:

• creating the Digital Platform Workers’ Rights Act 2022, which, when it comes into force will establish certain rights for workers that perform digital platform work; and 
• amending the ESA to create an obligation on employers with 25 or more employees to develop and circulate a written policy with respect to the electronic monitoring of employees.

The Working for Workers Act also introduced other changes, including excluding certain business and information technology consultants from the rights and protections granted by the ESA.

What is a business or information technology consultant according to the ESA? 

As amended by the Working for Workers Act, the ESA defines a business or information technology consultant as an individual who provides certain advice or services to a business or organization. 

A business consultant provides advice or services in respect of the business or organization’s performance, including in respect of its: 

“operations, profitability, management, structure, processes, finances, accounting, procurements, human resources, environmental impacts, marketing, risk management, compliance or strategy.”

An information technology consultant provides advice or services in respect of the business or organization’s information technology systems, including their: 

“planning, designing, analyzing, documenting, configuring, developing, testing and installing.”

According to the guide to the ESA, these definitions cover both situations where the individual provides advice or services to their employer or a client of the employer.

What other conditions need to be satisfied for the consultant to be excluded from the ESA?

Three other conditions need to be satisfied for a business or information technology consultant to be excluded from the ESA:

• the consultant provides services through a company of which they are a director or shareholder who is party to a unanimous shareholder agreement, or through a sole proprietorship if the services are provided under a registered business name;
• there is an agreement setting out when and how much the consultant will be paid, which needs to be at least $60 per hour, not including things like bonuses and expenses; and 
• the consultant is paid in accordance with the agreement.

What does the exclusion actually do?

The amendment to the ESA, excluding certain business and information technology consultants, took effect on January 1, 2023.

If an individual is an employee (rather than an independent contractor) and meets all the requirements set out above, the new exception means that they do not have rights under the ESA. If one of the conditions is no longer met, the person may have rights under the ESA.

Why did the Government introduce the exclusion?

The Ministry of Labour, Training and Skills Development said that it proposed the amendment because some businesses wanted certainty that contracts with consultants would not create employment relationships and that some workers also preferred to be independent contractors rather than employees.

Robin Martin MPP reinforced this explanation in the debate on Bill 88 in the Standing Committee on Social Policy when she said:

“What we’re doing is clarifying criteria that already exempt those [employees] from the Employment Standards Act … Due to the nature of their highly skilled work in this space, they choose this [contractor] status so that they can charge a higher salary or benefit and get a more favourable tax treatment.”

Contact Haynes Law Firm in Toronto for Guidance on Employment Legislation

The Haynes Law Firm advises both employers and employees on amendments to Ontario employment legislation, including how these changes impact the classification of workers. Paulette Haynes assists organizations in determining whether the ESA covers workers to help avoid penalties and litigation and also helps employees to obtain their legal entitlements. Please contact the Haynes Law Firmonline or call us at 416.593.2731.

We recently wrote about the introduction of a prohibition on employers entering wage-fixing and no-poaching agreements under the Competition Act. This protects workers and creates competition between employers, leading to better wages and employment opportunities. 

The Competition Bureau has now released draft guidelines for enforcing the prohibition. This article examines these new guidelines and what they reveal about the Competition Bureau’s approach to prohibition. 

What does the prohibition cover?

New subsection 45(1.1) of the Competition Act makes it an offence for an employer to conspire, agree or arrange with an unaffiliated employer:

• to fix, maintain, decrease or control salaries, wages or terms and conditions of employment; or
• to not solicit or hire each other’s employees.

For more detail on the new offence, please see our previous article.

What is the status of the guidelines?

The new guidelines issued by the Competition Bureau are in draft form and are designed to facilitate public consultation. Interested people can comment on the guidelines until March 17, 2023.

The Competition Bureau investigates possible contraventions of the Competition Act. If it thinks there is evidence of an offence, it can refer the case to the Director of Public Prosecutions (DPP) and recommend criminal charges. The guidelines give a useful indication as to how the Competition Bureau might go about enforcing subsection 45(1.1).

However, it is important to note that the guidelines do not constitute the law. They do not oblige the Competition Bureau or DPP to act in a particular way. The guidelines are also subject to change. They could be revised, for example, following the completion of the public consultation or if court decisions interpret the prohibition differently.

What do the guidelines reveal about the Competition Bureau’s prohibition enforcement approach?

The draft guidelines contain several important clarifications and examples. Some of these are summarized below.

Entry into force of the prohibition

The guidelines remind employers that subsection 45(1.1) comes into force on June 23, 2023. As a result, it is an offence to enter a wage-fixing or no-poaching conspiracy, agreement or arrangement as of that date.

However, the Competition Bureau considers that the prohibition applies to conduct engaged in on or after June 23, 2023, reaffirms or implements older agreements.

Prohibition does not apply to affiliated employers

The conduct only constitutes an offence if an employer conspires, agrees or arranges with another employer who is not affiliated. The draft guidelines explain that the Competition Act defines affiliation with reference to control. Therefore, agreements between corporate entities controlled by the same parent company would not fall foul of the new offence.

The guidelines also remind employers that the conspiracy, agreement or arrangement does not need to be entered into by the corporation or business to contravene the prohibition. “Employer” is defined broadly to include directors, officers, agents or employees. The individuals could be prosecuted, as could the company if the agreement was entered into by employees acting as senior officers.

Mere “conscious parallelism” is permissible

In our previous article, we noted the potentially broad nature of the prohibition and that the existence of a conspiracy, agreement or arrangement could be inferred from circumstantial evidence. This means it is possible that activities like exchanging information for salary benchmarking purposes could potentially raise concerns under subsection 45(1.1).

The draft guidelines offer a little bit of clarity on the Competition Bureau’s likely approach to such practices. They state that merely acting independently with awareness of the likely response of competitors or in response to the conduct of competitors is not considered to be contrary to the prohibition. 

However, the guidelines state that an inference could potentially be drawn if there were:

“parallel conduct coupled with facilitating practices, such as sharing sensitive employment information or taking steps to monitor each other’s employment practices.”

This highlights the importance of employers having a carefully considered policy to minimize the risk that information sharing attracts the attention of the Competition Bureau.

Prohibition on no-poaching agreements only applies if both employers agree not to poach

The prohibition only applies to situations where employers conspire, agree or arrange not to solicit or hire each other’s employees. The draft guidelines state that it is not an offence if only one of the parties agrees not to poach the other’s employees. However, separate arrangements can be considered together to determine whether each party has taken on the obligation not to solicit employees.

Prohibition is directed at “naked” restraints on competition

The draft guidelines say that:

“Subsection 45(1.1) is directed at “naked restraints” on competition, that is, restraints on wages or job mobility that are not implemented in furtherance of a legitimate collaboration, strategic alliance or joint venture.”

As a result, the guidelines envisage using the ancillary restraints defence in section 45(4) of the Competition Act to facilitate certain types of broader transactions where the wage-fixing or no-poaching agreement is directly related to and reasonably necessary for achieving the objective of the transaction. 

The guidelines use the example of a recruitment agency that has agreed with a company to provide workers for a short period. Each also agrees not to hire the other’s employees while the contract is in effect. The agency and company may be able to rely on the defence if it is reasonably necessary for achieving the effect of the broader staffing agreement. The guidelines note that the duration and other terms of the restraint, like the geographic scope, impact on whether it is reasonably necessary.

Contact Haynes Law Firm in Toronto for Guidance on Employment Legislation

The Haynes Law Firm advises both employers and employees on their rights and obligations under employment legislation. Paulette Haynes understands the recent statutory developments and stands ready to help the former prepare policies to comply with legislation and the latter to enforce their legal rights. Please contact the Haynes Law Firm online or call us at 416.593.2731. 

Anti-competitive practices can harm employees. For example, agreements between employers to set wages or not solicit each other’s employees can result in lower pay and benefits than would otherwise be the case.

This article looks at recent amendments to Canada’s Competition Act prohibiting wage-fixing and no-poaching agreements between employers. 

Where did these concerns come from?

There have been concerns about anti-competitive employment practices for some time. These concerns arose following the decision by multiple grocery store chains to end the two-dollar-per-hour uplift in frontline worker pay, all at the same time in June 2020.

What does the new legislation do?

The Canadian Parliament passed Bill C-19, and it received royal assent as the Budget Implementation Act 2022 No. 1 (Budget Act) on June 23, 2022. 

This piece of legislation implements various provisions of the budget that was tabled in April 2022, as well as other measures. As such, it does things including amending taxation statutes and implementing other budget promises, for example, the two-year ban on the purchase of residential property by some categories of non-Canadians. 

Of relevance to employment law, the Budget Act also amends the Competition Act to prohibit employers from wage-fixing and entering no-poaching agreements.

What are the provisions on wage-fixing and poaching agreements?

The Budget Act introduces a new sub-section into section 45 of the Competition Act, which governs offences in relation to the competition. It comes into force on the first anniversary of the Budget Act receiving royal assent, so June 23, 2023.

New section 45(1.1) states:

“Every person who is an employer commits an offence who, with another employer who is not affiliated with that person, conspires, agrees or arranges

(a) to fix, maintain, decrease or control salaries, wages or terms and conditions of employment; or

(b) to not solicit or hire each other’s employees.”

The first limb of the offence refers to wage-fixing agreements but is broader than simply remuneration as it includes “terms and conditions of employment,” while the second is sometimes known as no-poach agreements.

The Budget Act also changes the Competition Act to specify that the court is able to infer the existence of a conspiracy, agreement or arrangement from circumstantial evidence. This means there does not need to be direct evidence of communication between the two unaffiliated employers.

What are the exceptions?

Section 45(4) of the Competition Act contains the so-called ancillary restraints defence, which will apply to the new offence. In order to take advantage of it, the employer needs to establish that the agreement is ancillary to a broader or separate and lawful agreement involving the same parties and is directly related to, and reasonably necessary for, giving effect to, the broader or separate agreement.

This may catch transactions, such as joint ventures, that need restraints on competition to facilitate the agreement. However, the wage-fixing or non-poaching clause needs to be directly related to and reasonably necessary for giving effect to the agreement. If it was possible to implement the transaction with an available, less restrictive measure, it might not be possible to rely on the exception.

What will be the effect of the legislation?

The provisions are drafted broadly; for example, there does not need to be a written agreement between employers to limit wages or not hire each other’s employees; any conspiracy, agreement or arrangement is sufficient. 

To what extent does the new offence prohibit benchmarking? Some employers share information about the wages they pay and check what competitors pay in order to remain competitive in the market for employees. These sorts of conversations may be riskier going forward.

To explain wage-fixing, a Competition Bureau tweet uses the example of a person that receives multiple cashier job offers, each with the same wage:

“It turns out that those competing stores made an agreement to offer the same hourly pay to limit competition on wages.”

A key question is how the Competition Bureau and courts will go about assessing whether an exchange of information between employers constitutes a conspiracy, agreement or arrangement.

What has the government said?

Very little. However, the guide to the amendments says that the new offence is designed to “protect workers from agreements between employers that fix wages and restrict job mobility.” This is consistent with a report on the budget, which describes the amendments to the Competition Act as a preliminary phase in modernizing Canada’s competition regime, including “fixing loopholes; tackling practices harmful to workers and consumers.”

What are the possible penalties for employers that fail to comply?

Employers that do not comply with the provision could be found guilty of an indictable offence. The penalty is specified to include imprisonment for up to fourteen years, a fine determined at the court’s discretion, or both. In addition, anyone that has suffered loss or damage as a result of an offence can sue to recover damages. 

What can employers do to prepare for the change?

Businesses with agreements, for example, in the context of broader transactions that relate to employees may need to consider whether these are prohibited by the new offence and potentially saved by the ancillary restraints defence.

When it comes to practices like salary benchmarking, it will be important for employers to carefully reflect on the processes they use for divulging and acquiring information, including remuneration. Having a properly considered and drafted policy is one way to minimize the risk of failing to comply with the new prohibition.

Contact Haynes Law Firm in Toronto for Guidance on Employment Legislation

The Haynes Law Firm advises both employers and employees on their rights and obligations under employment legislation. Federal and provincial legislation relating to employment is constantly changing and evolving. Paulette Haynes is across all the recent statutory developments, so it is well-placed to assist your organization in complying with all of its obligations or help you to enforce your legal entitlements. Please contact the Haynes Law Firm online or call us at 416.593.2731. 

The Working for Workers Act 2022 (Act) received royal assent and became law in Ontario on April 11, 2022.

We recently examined one of the important changes made by this Act – it will create the standalone Digital Platform Workers’ Rights Act 2022. This legislation will establish foundational rights and protections for digital platform workers.

This article takes a look at another key requirement introduced by the Act – a requirement for larger employers to have a written policy with respect to the electronic monitoring of employees.

Larger employers must have an electronic monitoring policy

The Act amends the Employment Standards Act 2000, introducing new section 41.1.1 titled “written policy on electronic monitoring.” It came into force on April 11, 2022.

Which employers need to have an electronic monitoring policy?

An employer that employs 25 or more employees on January 1 must have a written policy with respect to the electronic monitoring of employees.

What information needs to be included in the electronic monitoring policy?

According to the Act, the policy is required to be in place for all employees. It is necessary to contain the following information:

• whether the employer electronically monitors employees, and if so, a description of how and in what circumstances the employer may electronically monitor employees, as well as the purposes for which information obtained through electronic monitoring may be used by the employer; 
• the date the policy was prepared and the date any changes were made to the policy; and
• such other information as may be prescribed.

When does the electronic monitoring policy need to be in place?

Ordinarily, if an employer employs 25 or more employees on January 1, the policy needs to be in place before March 1 of that year. However, there is a transitional provision for the first year in which the Act is in force. If an employer employs 25 or more employees on January 1, 2022, the policy needs to be in place by October 11, 2022.

When does the electronic monitoring policy need to be given to employees?

Employers must provide a copy of the policy to each employee within 30 days from the day the employer is required to have the policy in place or, if an existing policy is changed, within 30 days of the changes being made. 

Employers need to give a new employee a copy within 30 days of them becoming an employee (provided this is later than 30 days later than the day the employer needs to have the policy in place).

What has the Government said?

On April 5, 2022, during the progress of Bill 88 through the Legislative Assembly, the Minister of Labour, Training and Skills Development, Monte McNaughton, said:

Delivery persons are being followed by GPS, construction workers are using phones and tablets on the job site and office workers are logging on from home—often from kitchen tables, living rooms or other shared spaces … Our new legislation, if passed, would be the first of its kind in Canada. Ontario would once again be breaking new ground and taking historic steps to protect privacy by addressing electronic monitoring in the workplace. Our government is breaking down barriers by increasing transparency. 

What does the new requirement not do?

The Government has confirmed that the new requirement does not establish a right for employees not to be electronically monitored by their employer or create any new privacy rights for employees. 

The Act also says that nothing in the new section affects or limits an employer’s ability to use information obtained through electronic monitoring of its employees. Furthermore, it provides that complaints alleging a contravention of the new section may only be made with respect to the requirement that an employer provides a copy of the electronic monitoring policy to its employees.

Does the Government need to go further to protect employee privacy at home? 

Where a policy is required under the Act, it needs to apply to all employees. This includes employees working in any environment, including the workplace and at home.

The COVID-19 pandemic has seen many more people working from their homes rather than strictly in the office or workplace. This has increased privacy concerns as it has become increasingly difficult to know where to draw the line between personal and private space. Some methods by which employers may seek to monitor employee performance in a remote environment arguably invade employee privacy.

Information and Privacy Commissioner sought changes to the Bill

Patricia Kosseim, Ontario’s Information and Privacy Commissioner, has expressed concerns about this. She wrote:

Employee monitoring software, or “bossware” as it’s sometimes called, has serious and far-reaching capabilities. It can monitor everything from our keystrokes and mouse clicks to our emails and video calls. It can even analyze our facial expressions to interpret — and sometimes nudge — our emotions and behaviours.

The Commissioner explains that as employees continue to work from offsite locations, employers are seeking new ways of supervising and measuring the performance of their employees remotely. Her view is that from a privacy perspective, the new Act does not go far enough. She calls for measures beyond transparency, namely governing electronic workplace monitoring under a more comprehensive Ontario private sector privacy law, similar to what was proposed last year in a Government white paper on modernizing privacy in the province.

Contact Haynes Law Firm in Toronto for Assistance with New Employment Legislation

Workplace law in Ontario is constantly changing. As such, it is important to get advice from a seasoned employment lawyer. Haynes Law Firm can guide you through these developing areas of the law. For example, we can help you with drafting employment policies or reviewing them to ensure they comply with all applicable requirements. 

Haynes Law Firm helps employers and employees throughout Ontario achieve effective solutions to legal issues and conflict management in employment law and civil litigation. Contact us online or call us at 416.593.2731.

Worker classification matters. It significantly impacts both the worker’s entitlements and the employer’s responsibilities under the law. The traditional distinction between employee and independent contractor is increasingly becoming blurred, with the common law also recognizing a middle ground – the dependent contractor.

To further complicate matters, we recently reported on Bill 88, the Working for Workers Act 2022. This has now received royal assent and will introduce foundational rights and protections for digital platforms, or so-called gig, workers.

This article briefly examines the differences between the types of workers, and why this matters. We also look at the rights provided to gig workers by the new legislation.

Employee or independent contractor?

Under the Employment Standards Act 2000 (ESA), an employee is a person who performs work for an employer for wages, a person who supplies services to an employer for wages, a person who receives training from a person who is an employer if the skill being trained is used by the employer’s employees, or a person who is a homeworker (a person who works for compensation from their residence, but is not an independent contractor). Employees are entitled to various entitlements under the ESA, such as minimum wage, reasonable notice for termination without cause, sick leave and vacation time. 

On the other hand, independent contractors have more control over how they perform their work and can work simultaneously for multiple clients and jobs of their choosing. They are responsible for paying tax and pension contributions and do not receive employee benefits or protections under the ESA or common law. 

The common law also recognizes a third classification, the dependent contractor. They are not employees and likely have a contract identifying them as “independent contractors”. However, they primarily work for one employer and earn at least 50% of their income from that employer. Courts look at the entire nature of the working relationship; there is no single determinative factor. If a worker is a dependent contractor, they are entitled to reasonable notice of termination or pay in lieu of such notice.

We suggest speaking to a seasoned employment lawyer to mitigate legal liability related to misclassification. Misclassifying an employee as an independent contractor may result in significant financial consequences for the employer, such as fines from the Ministry of Labour and claims by employees for entitlements like vacation pay or pay in lieu of notice if they have been terminated. 

Working for Workers Act 2022 becomes law in Ontario

The Working for Workers Act 2022 received royal assent and became law on April 11, 2022. 

One of the key changes introduced by this new legislation is the creation of the Digital Platform Workers’ Rights Act 2022 (Act), which will come into force on a day to be named by the proclamation of the Lieutenant Governor.

It covers workers that perform “digital platform work”, which means:

subject to the regulations, the provision of for payment rideshare, delivery, courier or other prescribed services by workers who are offered work assignments by an operator through the use of a digital platform.

The Ontario Government wants to provide gig workers, those who use digital apps to book jobs such as food delivery or transporting people, with basic worker rights. It has been said that, as the first province to introduce such changes, gig workers will be better off than their counterparts in other provinces.

The Act establishes foundational rights and protections for digital platform workers

The Act establishes foundational rights and protections for digital platform workers. The rights for digital platform workers are set out in sections 7 to 13.

They include:

• The right to receive a minimum wage for each work assignment, at the level set out in section 23.1(1)(1)(iv) of the ESA, which is currently $15 per hour.

• The right to receive tips and other gratuities, without deduction (unless authorized by another statute or court).
• The right to receive certain information, for example, a description of how pay is calculated when the worker is given access to the platform and an estimate of the pay when the worker is offered a work assignment. 
• The right not to be removed from the platform without a written explanation. Two weeks’ written notice is required if access is removed for at least 24 hours unless the worker is guilty of wilful misconduct.

What has the reaction been?

Some have criticized the minimum wage provisions. For example, Gig Workers United and the Canadian Union of Postal Workers have said that the minimum wage for time on assignment sets a standard for app-based delivery workers lower than the provincial minimum wage because it does not cover all hours worked. 

Some have said that the Act does little to help those workers that have been misclassified as independent contractors. Gig workers have typically been classified as independent contractors by companies. However, some gig workers have challenged this classification in the past, arguing that they are in fact employees. For example, the Ministry of Labour recently decided that a particular Uber Eats courier was an employee, rather than an independent contractor. 

The Act does not confer many of the benefits that apply to employees (under the ESA) to gig workers, such as overtime, vacation or termination pay.

Contact Haynes Law Firm in Toronto for Advice on Proper Worker Classification

Worker classification has a direct impact on the employment relationship from the moment the employment contract is signed. Employers who misclassify an employment relationship, whether deliberately or in error, run the risk of costly litigation and fines in the future.

Haynes Law Firm, led by Paulette Haynes, is a preeminent Toronto employment law firm with considerable experience in the classification of employees. The firm mitigates the risk of potential fallout for employers by ensuring all employment relationships are correctly classified from the start. Paulette’s seasoned and experienced team of employment law professionals drafts and reviews employment contracts designs internal policies concerning various employment relationships and provides guidance with respect to termination requirements. To discuss how Haynes Law Firm can assist your organization, please contact us online or by phone at 416-593-2731.

We recently reported on the Ontario requirements relating to disconnecting from work, newly introduced under the Working for Workers Act 2021. Designed to address issues relating to work-life balance, the requirements force certain employers to prepare a written policy on disconnecting from work. 

The legislation doesn’t contain much detail, but the Ontario Ministry of Labour, Training and Skills Development has recently issued guidance on disconnecting from work policies, which provides some more information. This article reviews the new guidance. 

The legislation requires larger employers to have a written policy on disconnecting from work

The Working for Workers Act 2021 amended the Employment Standards Act 2000 (ESA) to insert a new Part requiring employers that employ 25 or more employees, on January 1 of any year, to have a written policy on disconnecting from work. 

The policy, which must be in place for all employees in Ontario, needs to be with respect to disconnecting from work. That phrase is defined 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 legislation does not provide details of what the policy needs to contain, other than it must include the date the policy was prepared and the date any changes were made to the policy.

Normally, the policy must be in place before March 1. However, as a transitional measure for 2022, employers that meet the 25-employee threshold on January 1, 2022, have until June 2, 2022, to have a written policy in place. 

An employer must provide a copy of the written policy with respect to disconnecting from work to each employee within 30 days of preparing the policy or, if an existing written policy is changed, within 30 days of the changes being made. An employer shall also provide a copy of the policy to a new employee within 30 days of the day they become an employee.

The Government has recently issued guidance on disconnecting from work policies

The new guidance from the Ontario Ministry of Labour, Training and Skills Development sits as part of the guide to the ESA. It is for information and assistance only and is not a legal document. However, it could be persuasive in the interpretation of the ESA. 

Some of the key points in the guidance are mentioned below.

No new right for employees to disconnect from work

The guidance confirms that the new legislative requirements do not create a new right for employees to disconnect from work. Employee rights to not perform work are established through other ESA rules, such as those relating to hours of work and eating periods. The new obligation is for employers to have a written policy in certain circumstances.

Threshold of 25 or more employees

A policy is required if the employer employs 25 or more employees in Ontario on January 1 of any year. The guidance instructs employers to count the individual number of employees it employs on January 1 – the number of “full-time equivalents” is irrelevant. It is also irrelevant that employees may be split across multiple locations – a policy is required if 25 employees are employed, even if lower numbers are located at individual sites. If two or more employers are treated as one employer under the ESA, then all employees employed by the employers in Ontario are included in the count.

If the employer starts the calendar year with less than 25 employees, but later expands beyond this threshold in the same calendar year, a policy is not required until the next calendar year. On the other hand, if the employee count dips below 25 partway through the year, the employer is still obligated to have a policy in place. The obligation won’t apply in the next calendar year if the employee count remains below 25 on January 1.

If the policy does not change, the employer does not need to provide employees with a new copy each year.

Content of the disconnecting from work policy

The ESA does not specify the information that must be included in the policy. As such, the employer determines the content of the policy.

The guidance states that, although the policy needs to apply to all employees in Ontario, there does not need to be the same policy for all employees. It is possible to have different policies for different groups of employees, and this can be in a single document or in multiple documents. 

The guidance gives some examples of matters that may be addressed in the policy:

• 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 policy may set out employer expectations for different situations. For example, … depending on:
  • the time of day of the communication
  • the subject matter of the communication
  • who is contacting the employee (for example the client, supervisor, colleague)
• The employer’s requirements for employees turning on out-of-office notifications and/or changing their voicemail messages, … to communicate that they will not be responding until the next scheduled work day.

If the policy is not followed

If the policy creates a greater right or benefit than an employment standard under the ESA, that right or benefit may be enforceable under the ESA, but if the policy does not do this, it is not enforceable under the ESA. 

Contact Haynes Law Firm in Toronto for Assistance with Employment Law Issues

Haynes Law Firm helps employers and employees throughout Ontario achieve effective solutions to legal issues and conflict management in employment law and civil litigation. Paulette Haynes of Haynes Law Firm can guide your organization through this developing area of the law. For example, if you require assistance drafting a policy on disconnecting from work or ensuring that your policy meets all applicable requirements, contact us online or call us at 416.593.2731.

A new piece of legislation, the Working for Workers Act 2021, was passed in Ontario late last year. It amended various statutes with respect to employment and labour matters, introducing a number of key changes. We have previously reported on the right to disconnect and the prohibition on non-compete agreements which were introduced by this Act.

Hot on the heels of the 2021 Act, the Ontario government has now introduced Bill 88, the Working for Workers Act 2022. If passed, this Act will introduce further changes to Ontario’s system of workplace laws. This article looks at some of the key changes that may be brought about by this new Act. 

Why has the Ontario Government introduced a new Bill?

On February 28, 2022, the Ontario Government introduced Bill 88, the Working for Workers Act 2022. It is currently working its way through the various Parliamentary stages.

A key motivation for introducing this Bill is the Government’s desire to provide gig or platform workers with basic employment rights, as recommended by the 2021 report of the Ontario Workforce Recovery Advisory Committee. “Gig” workers are those who use digital apps to book jobs such as food delivery or transporting people. They are typically independent contractors that do not fall under the Employment Standards Act 2000.

We look at three of the key changes that may be implemented if the Act is passed.

The Act would establish foundational rights and protections for digital platform workers

If passed, the Act will establish foundational rights and protections for digital platform workers who provide ride-share, delivery, or courier services. This would guarantee them a minimum wage, protection of their tips, the resolution of disputes in Ontario, and protection from reprisals. The Act proposes to do this through the creation of the Digital Platform Workers’ Rights Act 2022.

The proposed legislation covers those that perform “digital platform work”, which is defined as, subject to the regulations, the provision of for payment rideshare, delivery, courier or other prescribed services by workers who are offered work assignments by an operator through the use of a digital platform.

On March 3, 2022, Monte McNaughton, the Minister of Labour, Training and Skills Development, said:

No one working in Ontario should ever make less than minimum wage for an hour’s work. No one working in Ontario should be dismissed without notice, explanation or recourse. No one should have to travel out of Canada to resolve a workplace dispute or sign a contract they don’t understand. This is why our government introduced core rights for gig workers. Our Working for Workers Act 2, if passed, would make Ontario the very first province in Canada to raise the floor for all of these workers. 

The Act would ensure that out-of-province workers can register in some professions or trades within 30 business days

The new Act, if passed, would impose service standards on regulated professions when they receive applications from domestic labour mobility applicants. These are individuals who have applied for registration by a regulated profession in Ontario and are currently registered with a body that regulates the same profession in another Canadian province or territory.

The Act proposes to amend the Fair Access to Regulated Professions and Compulsory Trades Act 2006 to require the regulated profession to acknowledge an application for registration within 10 business days and provide the applicant with a registration decision within 30 business days.

The aim of this change is to speed up decision-making, allowing workers to move to Ontario and reduce the number of vacant jobs.

The Act would require larger employers to establish and share policies on how they are monitoring electronic devices

In order to address privacy concerns, the new Act, if passed, will require some employers to be transparent on how employees’ use of computers, cell phones, GPS systems and other electronic devices are being tracked. This would apply to employees working in any environment, including the workplace or at home.

On February 24, 2022, the Minister of Labour, Training and Skills Development said:

Today, businesses have more ways than ever before to monitor where their workers are and what they are doing. Whether you are a delivery person being followed by GPS, a construction worker using a company phone, or an office worker logging in from home, you deserve to know if and how you are being tracked.

The Act seeks to amend the Employment Standards Act 2000 to introduce a requirement that employers who employ 25 or more employees on January 1 have a written policy in place for all employees with respect to electronic monitoring of employees. It must be prepared by March 1 and provided to each employee within 30 days. There are transitional provisions amending these deadlines for the first year in which the Act is in force.

The policy is required to set out the following matters:

• whether the employer electronically monitors employees and if so, a description of how and in what circumstances, as well as the purposes for which information obtained through electronic monitoring may be used by the employer; 
• the date the policy was prepared and the date any changes were made; and
• such other information as may be prescribed.

Contact Haynes Law Firm in Toronto for Assistance with New Employment Legislation

Workplace law in Ontario is constantly changing. As such, it is important to get advice from a seasoned employment lawyer. Haynes Law Firm can guide you through these developing areas of the law. For example, we can help you with drafting employment policies or reviewing them to ensure they comply with all applicable requirements. We also advise on worker classification, helping employers to mitigate legal liability by ensuring that employees are treated as required.

Haynes Law Firm helps employers and employees throughout Ontario achieve effective solutions to legal issues and conflict management in employment law and civil litigation. Contact us online or call us at 416.593.2731.

We recently reported on the introduction of a prohibition on non-compete agreements by the Working for Workers Act 2021. 

A non-compete agreement or clause (also known as a non-competition clause) seeks to impose restrictions on the activities that an ex-employee may undertake for a specific period of time after leaving their present employer. They normally provide that the employee will not work for, or start, a business that competes with the former employer for a certain period, and sometimes, within a specific geographical location. 

The recent case of Parekh v Schecter in the Ontario Superior Court of Justice examined whether this prohibition applies to non-compete agreements entered into before the date specified in the Act.

The Working for Workers Act Prohibits Employers From Entering into Non-Compete Agreements

The Act amends the Employment Standards Act 2000 and prohibits employers, with some exceptions, from entering into employment contracts or other agreements with employees that are, or that include non-compete agreements. Any such non-compete agreement is void. The ban is deemed to have come into force on October 25, 2021.

Defendant signs non-compete agreement in 2020

In 2020, the plaintiff purchased a dental practice from the defendant’s son. Part of the deal was that the defendant’s father would continue working at the practice for three years. The defendant signed a non-compete clause restricting him from practicing dentistry within a 5 km radius during the term of employment and for two years after, along with a non-solicitation clause and a clause restricting his use of confidential information.

The defendant resigned in 2021 and then began to practice at a dentistry that was just over a 5 km drive away, but that was within the 5 km radius. There was evidence that he also took patient dental moulds, and it was argued that he may have solicited patients because he saw patients that used to attend the original practice in his first few weeks.

The plaintiff sought an interlocutory injunction preventing the defendant from practicing dentistry within the 5 km radius and soliciting any patients, as well as requiring the return of all patient information. This is a discretionary remedy that can be granted by a judge before the trial if, in the case of non-compete clauses, the plaintiff has a strong prima facie case, will suffer irreparable harm if it is not granted and the balance of convenience favours its grant.

The Working For Workers Act Prohibition Does Not Apply to Non-Compete Agreements Entered into Before October 25, 2021

The defendant argued that the Act applied to void the non-compete clause which he entered into prior to the date that the prohibition came into force. He argued that if it did not, it would cause a lack of legal uniformity and create two tiers of employees with different levels of protection.

Justice Sharma disagreed, holding that the provisions in the Act do not apply to contracts of employment with non-compete clauses entered into before October 25, 2021. His Honour explained that new legislation that affects substantive rights is presumed to have only prospective effect unless it is possible to discern a clear legislative intent that it is to apply retrospectively. In this case, the legislature selected a specific entry into force date prior to the date the Bill received Royal Assent on December 2, 2021. 

His Honour concluded:

Faced with this express legislative intent to make the [Employment Standards Act 2000] amendments applicable as of October 25, 2021, and not earlier, it cannot be said the provisions with respect to the non-compete clause applies to contracts of employment with non-compete clauses entered into before October 25, 2021.

Non-Compete Agreement Upheld 

Having found that the non-compete agreement was not voided by the Act, Justice Sharma turned to the common law principles. His Honour explained that there must be a strong likelihood that the plaintiff will ultimately be successful at trial because a non-compete clause limits a person’s ability to engage in their chosen profession. Covenants in restraint of trade are contrary to the public policy in favour of trade, but certainly, such covenants will be upheld if they are found to be reasonable in the circumstances.

Justice Sharma first determined that the non-compete clause was not ambiguous, in respect of its temporal and geographic scope and in terms of the proscribed activity. 

His Honour held that the plaintiff had a strong prima facie case to enforce the non-compete clause. Even though the defendant did not receive payment for goodwill upon the sale of the practice (his son did), the evidence suggested that the clause was more closely attached to the contract for the sale of the business as compared to one prepared in an employment context. The defendant continued to exercise significant managerial control, was directly involved in negotiating his agreement and sizeable goodwill in the practice was due to his reputation. Justice Sharma found that it was not unreasonable with reference to the public interest. It was negotiated in the context of the sale of the goodwill of the dental practice and the purchase price exceeded the assessed value.

His Honour decided that the plaintiff would suffer irreparable harm if the injunction was not granted. It would be unjust to confine the plaintiffs to a remedy in damages given that a number of patients had already booked appointments with the defendant, suggesting this was just the beginning of a loss of goodwill and market share. Justice Sharma found the balance of convenience favoured granting the injunction. The defendant could still work at a practice outside the 5 km radius. If not granted, there was a risk that the goodwill would continue to diminish as the case slowly made its way to trial. 

Contact Haynes Law Firm in Toronto for Highly Skilled Employment Litigation Representation

Haynes Law Firm helps employers and employees throughout Ontario achieve effective solutions to legal issues and conflict management in employment law and civil litigation. Haynes Law Firm can guide you through this developing area of the law. For example, if you require assistance drafting employment contracts that meet the requirements of the Working for Workers Act 2021 and protect your interests, or want high-quality representation in employment litigation, contact us online or call us at 416.593.2731.

You might have seen or been subject to an employment contract that contains a provision preventing the employee from engaging in work that is in competition with the employer’s business for a period of time after the employment relationship ends. Even if this type of clause wouldn’t be relied upon by the employer or enforced by a court, it could still have a chilling effect on the ability of the employee to seek future employment in a related field.

A new piece of legislation, the Working for Workers Act 2021, has been passed in Ontario which amends various statutes with respect to employment and labour matters. It received royal assent and became law in Ontario on December 2, 2021. We have previously examined the right to disconnect created by the Act.

This article looks at another key change brought about by the new Act – the introduction of a prohibition on non-compete agreements.

What is a Non-Compete Agreement?

A non-compete agreement or clause (also known as a non-competition clause) seeks to impose restrictions on the activities that an ex-employee may undertake for a specific period of time after leaving their present employer. They normally provide that the employee will not work for, or start, a business that competes with the former employer for a certain period, and sometimes, within a specific geographical location. 

The Act defines a non-compete agreement 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.

What does the Working for Workers Act do?

The Act amends the Employment Standards Act 2000 and prohibits employers from entering into employment contracts or other agreements with employees that are, or that include non-compete agreements. The ban applies retroactively from October 25, 2021.

Monte McNaughton, the Minister of Labour, Training and Skills Development said:

These agreements … [aren’t] fair to workers who are eager to advance their careers and this isn’t fair to the thousands of small start-ups we have in Ontario who are starved for talent. This change would help them find workers with the skills they need to scale up, grow and prosper.

What are the specifics of the prohibition and the exceptions?

The Act provides that no employer shall enter into an employment contract or other agreement with an employee that is, or that includes a non-compete agreement. Any such non-compete agreement is void. The Ontario Ministry of Labour, Training and Skills Development has said that the prohibition does not apply to non-compete agreements entered into before October 25, 2021.

The only exceptions to this prohibition are employment contracts for executives and non-compete clauses in the context of the sale of a business. Firstly, an executive is defined 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.

Secondly, if there is a sale or lease of a business and the parties enter into an agreement that prevents the seller from engaging in an activity that is in competition with the purchaser’s business after the sale and, immediately following the sale, the seller becomes an employee of the purchaser, the prohibition does not apply.

What has the Working for Workers Act Really Changed?

Non-Compete Agreements are Void as a General Rule Under the Common Law

It is arguable that not much has changed. Canadian courts have generally considered non-compete agreements to be unenforceable restraints on trade anyway, except in exceptional cases where they are necessary to protect the employer’s legitimate proprietary interest. Courts are reluctant to place unreasonable limitations on an individual’s ability to obtain new employment.

However, some companies have required current or prospective employees to sign non-compete agreements as a condition of employment, and employers have threatened or commenced litigation in reliance on such agreements. The prohibition in the new Act is designed to address the chilling effect that non-compete agreements have on employee mobility. The Government of Ontario has said that it wishes to enhance worker mobility, fair competition and innovation. 

The Prohibition in the Act Only Applies to the Employment Relationship and Does Not Prevent Reliance on Narrower Clauses

The prohibition in the new Act only applies to non-compete agreements in the employment context. It doesn’t apply to other types of arrangements, such as independent contractors.

Furthermore, the Act does not do anything in relation to other types of clauses in employment contracts that are designed to protect the employer’s interests. These include non-solicitation clauses, which aim to prevent employees from contacting or soliciting business from former clients when employed by a new employer, as well as confidentiality, non-disclosure and intellectual property provisions.

Contact Haynes Law Firm in Toronto for Assistance with Drafting or Reviewing Employment Contracts 

This change to the law has created some uncertainty, for example, whether an exception applies in the context of an employee that performs executive-type duties but under a title not listed in the definition of “executive” in the new Act. It has also created risks for employers, such as the possibility of other provisions being deemed void if inseparable from non-compete clauses. As such, it is important to get advice from a seasoned employment lawyer on your particular circumstances.

Haynes Law Firm helps employers and employees throughout Ontario achieve effective solutions to legal issues and conflict management in employment law and civil litigation. Haynes Law Firm can guide you through this developing area of the law. For example, if you require assistance drafting employment contracts that meet the requirements of the Working for Workers Act 2021 and protect your interests, contact us online or call us at 416.593.2731.