Right to disconnect, non-compete clause at heart of planned legislation

By Tony Poland, LegalMatters Staff • Legislation proposed by the Ontario government offers some “employee-friendly” provisions but more details are necessary to determine if it can deliver on its promises or if it is simply window dressing,  says Toronto employment lawyer Ellen Low

The government says if passed, the Working for Workers Act, 2021, which includes the right to disconnect, will provide a healthy work-life balance and “protect, support, and attract workers to the province.” 

However, Low, principal of Ellen Low Employment Law, says she would like to see more details before passing final judgment.

“It was an interesting announcement. In theory, what is being proposed could be quite employee-friendly,” she tells LegalMattersCanada.ca. “But, as always, the devil is in the details. I will be curious to see exactly who these new provisions apply to and the language of the legislation.

‘This is all over everyone’s radar’

“There has been a great deal of chatter about this announcement. This is all over everyone’s radar.”

Monte McNaughton, Minister of Labour, Training and Skills Development, introduced the proposed legislation with the hope of positioning Ontario “as a first mover in charting the path forward” as the employment landscape evolves.

“COVID-19 has changed the way we work, leaving too many people behind, struggling to put food on the table and make ends meet for their families,” says McNaughton. “Our government is working for workers. To do so, we must act swiftly and decisively to put workers in the driver’s seat and begin rebalancing the scales.”

If passed the legislation would:

  • require employers with 25 or more employees to have a written policy about employees disconnecting from their job at the end of the workday. A first in Canada, according to the ministry;
  • ban the use of non-compete agreements that prevent people from exploring other work opportunities in order to make it easier for workers to advance in their careers. Also, a first in the country the ministry states;
  • help remove barriers, such as Canadian experience requirements, for internationally trained individuals to get licensed in a regulated profession and get access to jobs that match their qualifications and skills; and
  • require recruiters and temporary help agencies to have a licence to operate in the province to help protect vulnerable employees from being exploited.

Right to disconnect not a new concept

Low says the right to disconnect is not a new concept. France has had the regulation on its books for several years.

“It’s new and it’s not new. It has been kicking around for a while,” she says. “The issue has come up lately because more and more people have been forced to work from home.

“The idea of having some time away from work when you are working in your home has certainly become more of a pressing issue.”

Low says Ontario already has laws governing working hours.

Section 17 of the Employment Standards Act, 2000 (ESA) covers hours of work and rest periods. An employer cannot require and, in fact, cannot permit an employee to work more than eight hours in a day or 48 hours a week,” she says. “Part of the concern, however, is that there are a whole host of people who are exempt from the section.”

While the proposed legislation aims to address the right to disconnect, there are not many details on how it will work, Low says.

‘I’ll be curious to see to whom it applies’

“I’ll be curious to see to whom it applies. Do we have the same employee carve-outs in the disconnect from work policy that we have in the ESA? Will the new legislation apply to every person as long as the employer has more than 25 employees in the workplace?” she asks. “Will managers or executives be included?”

Low explains managers and executives are generally exempt from overtime provisions in the Employment Standard Act “their terms of employment are designed to compensate them for all the hours of work that they are expected to perform.” 

She says she is also curious to see the proposed language in the non-compete clause.

“I agree with the Court’s take on the issue, which essentially seems to be that a non-compete provision, except in very exceptional circumstances, is very unlikely to be enforceable,” Low says. “As one judge has said, ‘Why should the Court give companies free protection which they should have otherwise paid for by offering the employee some sort of compensation in exchange for signing a non-competition and non-solicitation provision?’”

She says the “interplay between the proposed legislation and the common law is where things can get intellectually and philosophically challenging.” 

“I would suspect that there is going to have to be some sort of threshold, a valid business reason, where it might be acceptable to have a non-compete clause,” Low says. “If an employer adds a clause into a contract that the employee is not permitted to compete, will this proposed legislation override that contract under common law?

“I suspect there will be some pushback on the non-competition provision.”

Government regulations, court rulings have had significant impact

She says there have been a multitude of new government regulations and court rulings since the start of the coronavirus pandemic that have had a significant impact on the employment landscape.

“This is just another announcement to keep us on our toes. There has been some legitimate policy fatigue. We just got through implementing vaccine policies and now we have this proposed legislation,” Low says. “I feel for employers. Many small businesses are trying their best to keep up with all of these different policies. I have had many inquiries from both employers and employees. I am certainly getting questions about maximum hours of work and overtime thresholds.”

She says employers have needed to update their workplace policies throughout the pandemic and this announcement will give them something else to think about.

“This is definitely keeping things lively,” Low says. “It is certainly going to add an extra wrinkle to my practice.”

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